SWEDEN – The third Swedish national pension fund, AP3, has appointed Axa Rosenberg Investment Management and Batterymarch Financial Management as managers of a US small and midcap equities portfolio.
The 380 million dollar (325 million euro) mandate is divided equally between the two managers, and will be managed locally in the US. On the decision, AP3 said the two managers have investment styles that complement each other which will contribute to the risk diversification of the portfolio.
Until now all of AP3’s holdings in US equities have been allocated to passive or enhanced indexing mandates, but the fund’s long term strategy is to increase the share of active management. The fund believes that the US small and madcap equity market is a market where active management can add value.
The reference index for the two mandates is Russell 2500 (ex REITS).
In addition to Axa Rosenberg and Batterymarch, agreements have been signed with five other managers, so that future transfer of funds within the same mandate is possible. These are Dimensional Fund Advisors, Harris Investment Management, Mazama Capital Management, New Amsterdam Partners and Times Square Capital Management.
AP3 put out to tender a mandate for European small and mid cap equity mandate at the same time, but this is not expected to be finalised before the summer.
AP3 has 120 billion Swedish kronor (13.16 billion euros) in assets under management.