AP7 has awarded three mandates worth an estimated SEK230bn (€25.1bn) to passive equity managers, completing a re-tendering launched more than a year ago.

The fund, the default option within Sweden’s premium pension system (PPM), hired BlackRock and reappointed State Street Global Advisors (SSgA) and Northern Trust Global Investments (NTGI) following a procurement exercise that attracted interest from dozens of managers.

The passive global equity mandates are the cornerstone of AP7’s SEK261bn Aktiefond, which forms one of the two building blocks of its four investment options – Såfa, Offensiv, Balanserad and Fösikitig.

The contracts are for three years, although they can each be extended twice by two years.

BlackRock, SSgA, NTGI beat competition from 15 other managers to be appointed.

While the size of individual mandates is unknown, the fund said last January, when the tender process overseen by bfinance was launched, that it would be tendering SEK230bn worth of mandates – equivalent to around 90% of its portfolio – and the majority of the SEK235bn within its equity fund at the end of 2014.

The equity fund has since grown to SEK261bn, around 92% of the fund’s SEK283bn in assets.

AP7 said it selected managers making the most economically advantageous offer, the sole criteria for awarding the mandates.

The continued focus on costs comes after the fund was able to cut management fees for the equity fund from 0.12 basis points to 0.11bps over the course of 2015, while costs associated with the fixed income fund fell to 0.04%.

AP7 employed SSgA and NTGI previously as equity managers, but the appointment of BlackRock sees the departure of Svenska Handelsbanken.

The company was the only domestic provider among 13 managers employed by AP7, according to its website, although the fund’s remaining active managers were largely appointed to specialist mandates – targeting Japanese equities in the case of Sumitomo Mitsui Trust and Nomura Asset Management, or focusing entirely on pharmaceutical stocks in the case of Carnegie Asset Management.

The fund also employs four private equity managers and recently said it would be investing a further SEK10bn into the asset class.

This story was amended following publication to say that only 18 managers overall applied for the mandate, and to remove a reference to NTGI’s mandate being global smart beta equity. This is to correct inaccurate information published in the Official Journal of the European Union