AP1, one of Sweden’s main four national pension buffer funds, has formed a new unit for external mandates, bringing together various departments in order to exploit potential synergies and boost knowledge sharing.
The move is part of a series of changes that the SEK365.8bn (€34bn) pension fund – which has been hit by management challenges – is currently putting in place to improve unsatisfactory investment returns.
One of the Stockholm-based fund’s portfolio managers, Helen Idenstedt, has been appointed to head up the new merged department, a spokeswoman for AP1 confirmed to IPE.
Idenstedt has been working as a portfolio manager for the pension fund for nearly two years, and previously worked as an analyst within alternative investments at AP1.
AP1 told IPE the new unit, which came as part of organisational changes announced in December, will be called External Partnership & Innovation. It will include all departments that handle external management mandates — the department for external management, hedge funds, venture capital funds and others, the spokeswoman said.
The pension fund has decided to create the unit “mostly for internal purpose-synergies,” she said, adding that it would aid internal cooperation and sharing of knowledge, among other things.
When asked if the move was an indication that external management was becoming a bigger part of AP1’s overall investment, the spokeswoman said this was not the case.
When the four big AP buffer funds reported 2019 results last month, AP1 posted the lowest return of the four at 15.1% after costs. AP1 already had less money under management than its peers, and last year’s comparatively weak investment performance increased this lag behind its peers, with total fund capital amounting to SEK365.8bn at the end of 2018 compared to the largest fund AP4, which had SEK418bn.
Acting chief executive officer Teresa Isele said last month that changes resulting from the fund’s decision last year to develop its asset management with new equities strategies and a new organisational structure were laying a better foundation for the fund to achieve its return targets, while also reducing its annual costs.
AP1 has suffered two top management casualties of rules breaches in the last six months.
Former CEO Johan Magnusson was fired in September for buying shares in an IPO in which it had already been decided that AP1 would participate in as an anchor investor.
Then in December, the fund’s head of equities Olof Jonasson agreed to leave amid a dispute over a breach of the fund’s internal rules related to personal investments.
AP1 has now appointed former European Central Bank senior staffer Kristin Magnusson Bernard as its new permanent CEO, who is due to take up the role in September.