Swedish buffer fund AP4 has invested €125m in two engagement funds from GO Investment Partners (GO), seeking exposure to European and Japanese small cap firms.
The SEK260bn (€29bn) investor committed €75m to the GO European Focus Fund, a constructive activist investment fund, which seeks to add significant value for clients by acting as a catalyst for corporate change in quoted small and mid-cap European companies.
Launched in 2005, it has assets under management of €500m, and achieved annualised net returns of 6.6% between inception and the end of March.
AP4 has also invested JPY7bn (€48m) in the TMAM-GO Japan Engagement Fund (JEF), doubling its initial investment made when the vehicle was launched in March 2012.
Mats Andersson, chief executive, AP4, said: “AP4 is delighted to make these investments into funds that we feel make a difference. Improving the performance of companies and making them more sustainable fits very well with AP4’s long-term investment philosophy.”
He added: “Our experience with the Japan Engagement Fund has been excellent, with returns far outstripping the market, and we have seen real change at Japanese portfolio companies. We look forward to more of this in Japan, and also now in Europe.”
According to GO, the fund aims to engage with small and mid-cap Japanese companies to improve valuations by addressing strategic, financial and governance issues.
The fund has returned 36.0% net per year since launch, compared with 21.2% for its benchmark.
Steve Brown, chief executive, GO, said: “The backing of AP4 is a powerful endorsement of our constructive approach to improving companies. There are excellent opportunities in both Europe and Japan right now, and we look forward to capitalising on these for the benefit of AP4 and our other investors.”