SWEDEN – AP3 has fired Schroder Investment Management from managing around 200 million euros in Japanese equities - though the UK asset manager will remain in the fund's manager pool.

The announcement follows the departure of Schroders’ Japanese equities expert Denis Clough, though the fund denied this had anything to do with its decision.

Tredje AP-fonden, the 14 billion-euro Third Swedish National Pension Fund, said in a statement that it has made “reallocations” in its 3.8 billion Swedish crown (414 million euro) Japanese equities portfolio.

“A weak relative performance of the overall Japanese equity portfolio during 2003 has indicated that the selection and diversification of managers within the mandate could be improved,” AP3 said.

“Therefore, we have decided to make changes in the mix of managers and to increase the number of managers from two to three.” The decision sees Schroders losing its half share of the portfolio. Schroders declined to comment.

The portfolio had been evenly split between Schroders and Capital International since mid-2002. AP3 said that as of February 2, the portfolio would now be managed by Capital International, with 50%, and Nomura and J P Morgan each taking 25%.

Portfolio manager Cecilia Sved said the decision was taken in order to diversify and achieve the right blend of managers. She said the fund has done a lot of quantitative analysis, which led to the decision to move to three managers. The departure of Clough had “nothing to do with our decision”.

J P Morgan and Nomura “diversify the portfolio quite well” she added. “They are very different kind of animals – they balance each other quite well.”

"We are very pleased to extend our partnership with AP3, following our appointment as their Asia (ex Japan) equity manager in 2002 and one of their European Small and Mid-Cap equities mandate last year," said Francois Xavier Douin, responsible for J P Morgan Fleming's institutional business in Scandinavia.

AP3 said yesterday that its chief executive Tomas Nicolin would be leaving to join occupational pension provider Alecta as CEO.

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