Sweden’s biggest pension fund Alecta announced it is setting up a separate company for its domestic property investments to boost scalability and minimise fees, and will later bring some of its outsourced property management in house under the new firm.
The pension fund said the new subsidiary, Alecta Fastigheter (Alecta Real Estate), would start off by managing SEK45bn (€4bn) of its directly-held Swedish properties and Swedish joint ventures.
It will be headed up by Lena Boberg, who is currently chief executive officer of Swedish property firm ICA Real Estate.
Hans Sterte, head of asset management and deputy CEO at Alecta, said: “By incorporating Alecta Fastigheter AB, we are creating a larger platform for Alecta’s real estate transactions, so we can increase the scalability and at the same time continue to manage our clients’ pension money for as low a fee as possible.”
Sterte said Alecta had been increasing the proportion of real estate in its portfolio in recent years and would continue doing so.
Axel Brändström, who was recently hired away from his CIO role at Skandia Investment Management to become Alecta’s head of real assets, is to take the role of chair of Alecta Fastigheter’s supervisory board.
Boberg said: “The goal is to grow in the next few years both through acquisitions and development, in combination with active management and a large customer and sustainability focus.”
Alecta said the formation of its property subsidiary was a process that would take place over 18 months, and after that, the firm would take back the management of most of the Swedish property assets that were currently managed externally – bringing them under the new company’s umbrella too.
Brändström told IPE that Alecta currently had around SEK100bn invested in real estate, with its direct Swedish property portfolio now externally managed by Newsec.
While Alecta Fastigheter will manage the lion’s share of the pension fund’s Swedish assets, a spokesman for the firm said, Alecta’s investment in Heimstaden Bostäder will continue to be managed by the pension fund’s in-house international real assets team led by Frans Heijbel.