SWEDEN - The SEK212.2bn (€22.9bn) third Swedish buffer fund, AP3 is tendering for external mangers for global enhanced indexing.
With this new mandate AP3 wants to "establish a long term, low risk exposure in its equity portfolio," the fund stated.
Enhanced indexation was chosen firstly because of its similarity to pure passive exposure in terms of low fees and low transaction costs and secondly because of a reduced risk for underperformance and a chance to achieve a small, but consistent, outperformance. All these factors "should give an improved information ratio over time," a spokeswoman told IPE.
The fund stated that it might also consider non-restricted products with higher risk profile, for example products involving long/short investments.
AP3 is looking for managers with a minimum of two years track record. Deadline for participation in the tender is April 2.
The fund also reported that it has made a longlist of managers for one or more global tactical asset allocation (GTAA) briefs.
How much money will be allocated to the mandates has not been decided yet. Chosen managers will now be sent a more detailed request for participation.
The mandates are a "move to further diversify the portfolio," AP3 stated. They will be absolute return mandates with no benchmarks attached and should exhibit low correlation with the main asset classes.
AP3 excludes commodity investments within that mandate and wants the main focus to be on mandates that take no net long positions.