AP6 calls unlisted asset pool 'best solution' after reforms cancelled

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AP6 has stood by proposals to consolidate the AP funds’ unlisted assets into a single vehicle, despite Sweden’s government dropping its planned reform of the system.

A spokesman for AP6, which manages SEK23.6bn (€2.5bn) in unlisted assets, told IPE it still believed the creation of a “competence centre” for unlisted assets was the best way forward, a goal that would have been achieved under the cross-party proposals through the merger of AP6 with AP2.

The proposals published in June suggested AP2 would manage all unlisted assets within the SEK1.2trn buffer fund system, stripping the remaining two funds of the ability to invest directly in asset classes including real estate and infrastructure.

A spokesman for AP6 had no comment on the government’s decision to cancel the reforms, announced on Thursday after a meeting of the cross-party Pensionsgruppen – comprising representatives of the four opposition and two government parties – failed to yield consensus following mounting criticism for the changes.

The decision followed months of criticism of the proposals from the AP funds themselves and the Swedish central bank and employer groups.

But the spokesman for AP6 said his fund still supported the idea of consolidating the system’s unlisted holdings.

“AP6 still thinks the proposal regarding investing in private equity and unlisted companies would have been the best solution for the entire AP system, and for Swedish pensioners,” he said. 

He added that the fund was still in favour of its proposed merger with AP2 “to create a competence centre for unlisted investments”.

Karl Svartling, AP6’s managing director, previously came out strongly in favour of the idea of consolidating unlisted assets.

In the fund’s response to the government proposals from October, he said such a joint vehicle would be more able to influence the market in a number of areas, including sustainability and transparency.

It is unclear whether the remaining four AP funds still favour a joint approach to unlisted assets – first mooted by the former government prior to the 2014 election –  as several of them have in recent months announced new real estate joint ventures.

AP1 last month formed a jointly owned property company, Secore Fastigheter, with Swedish retail chain ICA.

The new entity is set to acquire 13 of ICA’s stores by the end of the year.

Meanwhile, AP1 and AP2 in August announced details of a €4bn office property joint venture with TIAA-CREF, seeded with assets from the funds’ previous venture Cityhold Property.

AP3 in September formed an office and retail joint venture with Sveafastigheter.

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