AP6, the Swedish pensions buffer fund that specialises in private equity, has reported a high level of investment activity in the first months of 2019, including adding a number of US partners to its portfolio.
With investors competing for deals – and some research suggesting the asset class has become overvalued – the Gothenburg-based investor said it made around 20 private equity transactions so far in 2019, in funds and as direct co-investments. It made direct investments in firms including Norwegian software company Visma and Danish internet firm Sitecore.
Margareta Alestig, AP6 chief executive, said: “There is a continued good flow of interesting investment opportunities. A number of new collaborations have been initiated, which means that the diversification of the portfolio continues in terms of geography, segment and industry,”
The SEK34.7bn (€3.2bn) fund said it had noticed a continued high level of activity in the capital raising processes it had taken part in, with access to capital so high that some funds had opted to increase their size.
AP6 added that the most successful fund companies were having no problem closing their funds, with fierce investor competition to gain access to them.
Karl Falk, head of fund investments at AP6, said the fund’s rate of investment had been high with regard to ongoing commitments to partner funds with which it already invested. However, AP6 had also formed a number of relationships with new partners.
He said: “We are very positive about the fact that we have also been able to add additional US players in buyout and venture to the portfolio.”
The buffer fund also reported having done a large number of co-investments this year.
Mats Lindahl, director of direct investments at AP6, said: “The majority of the investments consist of new companies, including in the North American market. A minor share is about additional investments in already existing direct investments.”
Research by data firm Preqin earlier this year showed nearly a third of investors (31%) planned to increase their allocations to private equity during 2019, with 12% planning to reduce it.