AP4 seeks 'standard' framework for passive global equities
SWEDEN - The fourth Swedish buffer fund, Fjärde AP-Fonden (AP4), has issued a tender for a passive global equities mandate valued at around €3bn.
AP4, which has assets under management of approximately €20bn, revealed it currently allocates €9bn to global equities, equivalent to 41% of the fund, of which around €3bn is invested in passive global equities.
But Tobias Fransson, had of external mandates at AP4, told IPE the size of the mandate would vary over time, so €3bn was a starting point, as the final figure could be slightly higher or lower.
The tender revealed the four-year contract is most likely to be discretionary, and awarded to between one to three managers, while performance will be benchmarked against the MSCI, with allocations to regional, sector and small caps varying over time.
AP4 currently has passive portfolios managed in different regions at present, including Japan, pacific ex Japan, North America and Europe, but they are all managed in different ways including the use of both internal and discretionary management.
"The problem is that it is not one standard structure. We feel that we want one framework, which is standardised for handling the whole exposure. We also want to reduce costs, so we're looking for one provider of it all," Fransson added.
The tender will close to applications on March 10 2008.
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