AP1, one of Sweden’s four main state pension buffer funds, has selected 14 managers for its SEK45.3bn (€4.3bn) allocation to emerging markets equities.

In May 2018, the SEK324bn fund moved to re-tender its entire allocation to emerging markets equities and entrust it to a range of external managers.

Majdi Chammas, head of external asset management at AP1, told IPE: “These are the approved managers for EM equity, but not all of them will manage money. The funding decision is separate from this, but these are all eligible for managing money on behalf of AP1.”

The managers selected are:

  • Aberdeen Standard Investments
  • BlackRock
  • First State Investments
  • Fisher Asset Management
  • GMO
  • GQG Partners
  • JP Morgan Asset Management
  • KBI Global Investors
  • Legal & General Investment Management
  • RBC Global Asset Management
  • Robeco
  • UBS Asset Management
  • Wellington Management

AP1 said it expected that these managers would diversify the fund’s portfolio and provide flexibility, and as well as complementing each other well in terms of investment styles and risk profiles.

In its 2018 annual report, AP1 reported a 0.2% investment loss for the year – although this was 1.7 percentage points above its benchmark.

Chief executive Johan Magnusson said in the report: “For several years now we have been saying that the extremely favourable returns on the financial markets are not sustainable in the long term.

“We can now see signs that conditions are changing, and we therefore anticipate a growing challenge in terms of achieving our real return target of 4%.”

Further reading

How We Run Our Money: Första AP-fonden (AP1)
Chief investment officer Mikael Angberg outlines the fund’s investment philosophy to IPE’s Carlo Svaluto Moreolo