SWEDEN - Fjärde AP-fonden (AP4), one of the buffer funds for the Swedish national pension fund has appointed a new head of fixed income and currency to replace Leif Hässel.

AP4 - valued at SEK207.4bn (€22.3bn) at December 31 2007 - has confirmed Bengt Lindefeldt will take on the role of manager for fixed income and currency administration from September 1 2008.

Lindefeldt joins the fund from AFA, the insurer, where he also had responsibility for the fixed income and currency administration; in addition, he previously held roles at both Norbanken and Carnegie.

He will replace Hässel who confirmed to IPE.com in February he would be leaving AP4 to join Kammarkollegiet - the Legal, Financial and Administrative Services Agency - at the beginning of April. (See earlier IPE story: AP4 seeks heads of equities and fixed income)

Latest figures from the AP4 website show the market value of its fixed income allocation at the end of 2007 was SEK76.3bn, which equates to a 36.9% share of the fund's strategic portfolio, while currency exposure was 14.2% of the total assets.

Although the value of fixed income investments increased from SEK69.6bn in 2006, AP4 admitted the return for the year, which was fully hedged, was 1.3% which "significantly underperformed" the fund's reference benchmark, while the active return on the portfolio was -2.1%.

AP4 attributed the poor performance to an indirect impact from the liquidity crisis in the second half of 2007, as the shortage of short-term financing had an "exceptionally adverse impact" on high-quality assets with shorter maturities - such as Swedish housing bonds, interest swaps and deposit rates - in which AP4 was 'overweight' during the year.

That said, the buffer fund confirmed active currency management provided a positive contribution of 0.16% to the fund's active return in 2007, resulting in a profit of SEK300m following the fund's decision to be overweight in Swedish and Norwegian kronor against the euro.

Lindefeldt's appointment follows the announcement in April stating AP4 had hired Björn Kvarnskog as the new head of global equities, following the departure of Anders Årjes in February. (See earlier IPE story: Swedish funds see management changes)

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email nyree.stewart@ipe.com