AP2 issues equity mandates worth $5.4bn

SWEDEN – The Gothenburg-based $13.5bn (€13.6bn) second Swedish national pension fund, AP2, has issued a RFP for managers for various European, North American, Asia-Pacific ex-Japan, Japanese and global equity mandates, worth a collective $5.4bn.

The fund is looking to appoint between 6 and 30 active managers for portfolios that will be split by sector and geographic regions according to MSCI developed market indices.

The mandates will initially run for a year, though renewal for further one-year periods is possible thereafter, depending on performance and the fund’s investment strategy.

The relevant sectors are consumer, both staples and luxury, healthcare, financials, information technology and telecoms.

AP2 says it is looking for managers with an active management style with a tracking error of between 5%-10%.

A spokesman for the fund says the RFP is in line with the fund’s strategy to evaluate its in-house management capability. “We feel that we don’t have the ability to manage global equity portfolios in-house at this time and that’s why we are appointing external managers for these mandates,” he explains.

The spokesman says the fund is happy with its current equity investment managers but the changes to the composition of its portfolios means they had to go out to tender.

“We are encouraging our incumbent managers to participate in the RFP. We felt it a natural progression to move to sector and geographical-based portfolios and believe this will allow us to tap into areas of the market and manager expertise that we couldn’t before,” he says.

The initial tender process will run until mid-August when the fund will draw up a short-list for a second, more in-depth tender. The spokesman says AP2 expects to have the new portfolios in place and running by October.

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