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Impact Investing

IPE special report May 2018

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MLIM loses €537m equity brief at AP4

SWEDEN – Merrill Lynch Investment Managers has been axed from a €537m financial sector equity passive mandate by the SEK180.1bn (€19.2bn) Fourth Swedish National Pension Fund or AP4.

The mandate has been managed in-house since December 2005. It was one of eight external management mandates for listed equities.

The remaining seven managers either posted “excellent returns”, outperformed the index or performed in line with the index, stated AP4’s recent annual review.

According to AP4 external mandates chief Tobias Fransson, the portfolio changed from a passive to an active strategy.

“We took it in-house to manage it actively. We wanted to increase the level of active risk,” he told IPE.

MLIM was appointed to manage the mandate in April 2004. AP4 stated there was no fixed time period attached to the mandate, but the scheme did not initially intend for the mandate to close at the end of 2005.

Fransson said: “The mandate ended not because MLIM hadn’t done a good job. They did what we expected them to do. MLIM continue to manage close to US$1bn for AP4.”

MLIM’s new owner and Merrill itself both declined to comment.

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