Management consultancy McKinsey has failed in a bid to renew its contract to provide the Swedish government with annual evaluations of the country’s AP funds following a tender process which ended with the mandate going to rival Arkwright.
Mats Langensjö, Stockholm-based partner at Arkwright, confirmed to IPE that his firm had won the contract, and said he and his partner colleague Claes Green would lead the Arkwright team in the work.
Six bids were received in the tender, from Coin Investment Consulting, Ernst & Young, McKinsey, KPMG and PPCmetrics, alongside winner Arkwright, according to news service Pensionsnyheterna.
Arkwright was judged to have the best evaluation price at SEK5.38m, lower than McKinsey’s bid of SEK8.7m, Pensionsnyheterna reported.
McKinsey has been tasked with producing the annual reviews of the AP funds since at least 2008, with consultancies Mercer and Wassum having undertaken the work before then.
The contract win will mean that Langensjö once more finds himself working to scrutinise the AP funds – something he had done on a regular basis throughout his long career, usually through leading official investigations and in other contexts.
He also worked on the annual reviews of the AP funds at Mercer and Wassum before McKinsey was given that contract some 15 years ago.
Langensjö once joked that AP funds were his “Hotel California” – a song that includes the lyric “you can check out […] but you can never leave”.
Asked how he felt about working on the funds again, the pensions expert – emphasising however that this was an Arkwright assignment – replied: “The AP Funds have changed a lot, but its true that I did the first review in 1996 and have on a regular basis appeared in different aspects and projects since then.”
“I am particularly proud that we at Arkwright have demonstrated that we have a strong and deep experience in the asset management and pension areas,” he said, adding that the firm was looking forward to working with the Swedish Finance Ministry on this project.
There are six AP funds which perform different roles in the Swedish state pension system. AP1, AP2, AP3, AP4 and AP6 are buffer funds for the pay-as-you-go income pension, while AP7 is the provider of the default option in the defined-contribution premium pension.