Three Swedish municipalities have appointed Carlson Investment Management to handle portfolios totalling Skr185m ($23m). At Solentuna Commune the mandate came to Skr75m, at Ljungby to Skr35m, while at Luleå, Carlson had to split a Skr150m brief with fellow Stockolm-based manager Alfred Berg.

Luleå's financial manager Lars Åhl says that this is the first time it did a placement for pension purposes. Though the amount was below that required for EU tendering procedures, it obtained proposals from 13 managers. At the start we were not sure if we wanted to put it all with one or two companies, and in the end we chose two."

The money will be used purely for pensions purpose, as the municipality faces increased payments for pensions in the future, he says. "This investment will help us reduce our future costs." The tendering process took less time than Åhl expected. "It all took about three months. This was due to the great use we made of our advisers Wassum, who have been very helpful in an area where we do not have a lot of experience."

He reckons that if the managers produce good returns, the amounts in-vested will be increased. "We will wait and evaluate the work they do." All of the three mandates are a mix of fixed interest and equities, says Perolof Öst at Carlson. "One mandate has a maximum of 50% in equities and the other two a 30% limit."

Carlson, with Skr30bn under management, believes that with the seven local and regional authority mandates it now holds more than any other manager. "We have Skr1bn invested for these clients," says Öst.

Typically for these mandates there can be up to 20 contenders, he says, and new managers are appearing all the time. "Usually the amounts are under this level to go through the EU route, but the authorities still go through the same process in order to protect themselves."

International consultancy William M Mercer was involved in the search for the Ljungby manager. Mats Langensjo of Mercers in Stockholm says it was the consultancy's first manager selection involvement for a Swedish local authority. "We have been working for a number of municipalities on liability issues. We were very pleased to be involved in this one." The number of enquiries from municipalities are increasing, he adds.

Wassum acted as consultants to the other two. This setting aside of assets is part of a growing trend among municipalities, say Jan Bernhard Waage of Wassum in Stockholm. Fennell Betson"