SWEDEN - Tredje AP-fonden (AP3), the third Swedish National Pension Fund, is seeking a number of corporate credit bond managers for its SEK188.6bn (€18.1bn) fund.
AP3, which is one of the Swedish pension buffer funds, is targeting external managers to provide active and/or enhanced management of the following bond portfolios:
The pension fund admitted the exact amount of capital allocated to each mandate is being left open to be decided at a later date, although it added that it intends to activate between one and eight corporate credit mandates for an initial period of five years.
Christina Kusoffsky Hillesöy, communications manager at AP3, confirmed that part of the procurement is because old credit mandates from 2002 had expired. But she added: "This time, however, AP3 has expanded the scope of the procurement. Part of the procurement is for entirely new mandates."
The portfolios being tendered by AP3 will be managed on a segregated basis and it noted that positions should mainly be taken in cash although limited derivatives exposure would be allowed.
Latest figures from the pension fund for the half year to 30 June 2009 showed the asset allocation comprised 48.1% in equities, 5% in private equity, 35.6% in fixed income, 8.4% in real estate, 2.6% in new strategies and the remainder in alpha strategies. (See earlier IPE article: AP3 rises 5.2% but warns system rebalancing takes time)
That said, it is not clear how the extended corporate credit procurement will affect the overall allocation.
Applicants may respond to more than one of the mandates, with the closing date for submissions set at 8 January 2010.
AP3 added that it expects to choose up to 15 applicants for each of the mandates, who will then receive a Request For Proposal (RFP) questionnaire by the beginning of February, to be returned by March 2010.
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