Sweden’s biggest pension fund has followed the example of its closest rival and peer and invested nearly a billion Swedish kroner in a fast-growing locally-run lithium-ion battery startup.

Alecta announced this morning it is investing about SEK950m (€87m) in Swedish energy storage firm Polarium, corresponding to around 10% of shares in the company.

Liselott Ledin, Alecta’s head of equity, said: “There will be a huge demand for batteries in society for a long time to come as part of the transition to renewable energy sources.

“Polarium is at the forefront of battery technology and energy optimisation solutions, and has already succeeded in achieving a strong market position globally,” she said.

The move follows a SEK955m investment in Polarium back in May from AMF – another large Swedish occupational pension fund – on the same terms and valuation as the Alecta investment currently taking place.

Polarium said it became the latest Swedish unicorn earlier this year when AMF invested based on a $1bn (€1.02bn) valuation – referring to the venture-capital term for privately-held startups with valuations at that level or more.

Alecta is investing in the Stockholm-headquartered battery firm via a coordinated transaction, alongside Swedish investors Formica Capital and Absolute Unlisted, which is part of investment manager Coeli, according to Polarium.

In total, the three parties have bought more than SEK1.1bn of existing Polarium shares, on the same terms and valuation as the equity raised in the spring and summer of 2022, the firm said.

Ledin said Polarium’s founder and chief executive officer Stefan Jansson and the firm’s majority owner, Swedish climate-focused investor Vargas Holding, had significant experience and confidence in the battery sector.

“We assess that this will be a good investment that gives good returns in the long term to Alecta’s customers,” she said.

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