SWEDEN – The SKr 130bn (€14bn) Third Swedish National Pension Fund, the AP3, has completed its asset manager search for Japanese and Asia Pacific (ex-Japan) equity mandates worth €390m with the appointment of Capital International, Shroders and JP Morgan Fleming Asset Management (JP Morgan) to its external manager roster.
The ¥33.8bn (€287m) Japanese portfolio is to be split into two equal components to be managed locally in Tokyo by the Japanese offices of Capital International and Shroders.
The AP3 says it chose these two managers based on their investment styles, which though different, are expected to complement each other and improve diversification of risk.
Also, the AP3 has chosen JP Morgan to manage exclusively the $102m (€103m) Asia Pacific (ex Japan) portfolio from its offices in Hong Kong.
It will be benchmarked against the FTSE All-World Developed Asia Pacific (ex-Japan) index, which includes Australia, Hong Kong, Singapore and New Zealand but the AP3 says JP Morgan may also invest up to 10% of the portfolio in South Korea and Taiwan.
The appointments are the first active mandates at the AP3 since it decided earlier this year to modify its investment strategy from passive to active management in those markets where it believes added value can be achieved.
Says Lena Djurberg, portfolio manager at the AP3: “AP’s strategy is to hire external asset managers where these can be expected to outperform our own internal managers. This applies especially to Asian equities markets, where local presence is a crucial prerequisite to successful asset management and there is good potential to outperform the market.”