SWEDEN - Erling Gustafsson, chief executive of the Swedish national buffer fund AP6, is stepping down from his role after 10 years.

The decision was taken jointly by Gustafsson and the board of AP6, which will now look for a replacement.

The board said in a statement that it had confidence in Gustafsson who will remain in his role until a replacement has been found.

The recruitment process is to start immediately and the board hope to have a candidate ready soon, but no specific time frame has been given.

AP6 returned 11.3% for the full year 2009, beating the target return by 3.8% and boosting total assets to SEK18.2bn (€1.86bn).

This compares well with 2008 when the fund underperformed by 16.6%. Over the longer-term, however, investment performance has been below AP6's targets, returning 7% during the 10-year period to 2009 and underperforming the target by 2.4%.

AP6 was last year involved in a scandal, which the board admitted had a negative impact on the trustworthiness of the fund (See earlier IPE story: AP6 admits trust damaged by Xeratech scandal). The board said its appointment of Åsa Rödén as CEO of the now bankrupt Xeratech was inappropriate because she was in a relationship with AP6's Gustafsson.

No formal wrongdoing was found and the fund has since adopted stricter procedures and regulations to avoid similar incidents from happening in the future. AP6 lost some SEK70m in the bankruptcy of Xeratech.

Since its inception in 1996, AP6 has grown in size from SEK10.4bn to SEK18.2bn at the end of 2009. It currently invests in 350 companies, out of which 60 are direct investments.