SWEDEN- The board of Sweden’s e2.6bn AP7 fund has finally given the go ahead to invest 8% of the portfolio in hedge funds and private equity. A week ago the fund delayed the decision due to concerns about pricing the investments into daily NAV calculations and about them meeting the fund’s well-publicised ethical guidelines.
Private equity and hedge funds typically value their holdings once a quarter but following negotiations with managers, AP7 has secured more frequent valuations. It has also negotiated an agreement with the private equity managers that it can sell its holdings to third parties.
The board has approved the project and AP7 has drawn up a shortlist of six alternative investment managers from an original 127 applications. In the next two weeks it will appoint four or five managers and, although it refuses to name the final six, four are American, two European.
Says Peter Norman, head of AP7: “we have also agreed on the condition that these funds accept our ethical and environmental policy when deciding on their own placements, and we will also be entitled to scrutinise the companies that we will now be investing in, albeit indirectly.”