Sweden’s Fund Selection Agency (Fondtorgsnämnden, FTN) has roundly rejected the legal arguments put forward by the first loser in one of its lucrative procurements to turn to the courts, and catalogued why it scored the bid so poorly.
Erik Fransson, the FTN’s executive director, said: “We have carefully reviewed the procurement process and examined the claims put forward by Indecap Fonder.”
“Our assessment remains that the procurement has been carried out in accordance with the applicable rules and regulations,” he said yesterday, adding that the agency therefore hoped the matter could be “handled swiftly in the best interests of savers”.
Indecap Fonder filed an application on 6 March in the Administrative Court in Stockholm for a judicial review of the FTN’s procurement of global equity funds – a SEK200bn (€18.4bn) process in which it was not among the 12 winning fund managers.
In that application, Indecap Fonder called for the procurement to be corrected or re-done, arguing the FTN had violated provisions in the procurement terms, resulting in damage or likely damage to the firm.
Through its lawyers Mannheimer Swartling Advokatbyrå, Indecap Fonder argued it should have been the funds rather than the fund provider that was assessed. It also claimed that FTN had not sufficiently justified the awarding of few points to Indecap Fonder’s tender in the process.
But the FTN said in its statement submitted to the court on Monday through its legal counsel Hellströms Advokatbyrå, that it not only had the opportunity, but a legal obligation, to take into account various aspects of the fund manager when assessing the quality of the fund.
“The entirety of Indecap’s arguments in this respect appears to be based on a misunderstanding of the Act (2022:760) on Procurement of Funds for the Premium Pension Fund Platform,” it said.
As for Indecap Fonder’s argument that it should have been awarded the highest score on all evaluation questions, the FTN said it was therefore accounting in its response for all the identified shortcomings in the firm’s tender responses and operations.
The Stockholm-based fund manager, which is owned by Swedish savings banks, stands to lose the SEK35bn it has under management in its Indecap Guide 2 C fund currently listed in the global category on the premium pension system’s fund platform – under the old rules which allow all fund providers meeting certain criteria to offer their funds.
In its response filed with the court on Monday, the FTN argued that Indecap Fonder had not suffered, and did not risk suffering, any loss within the meaning of Chapter 3, Section 5 of the procurement rules (LUP), and that there were therefore no grounds for intervention under that provision.
“FTN argues that Indecap Fonder has not fulfilled its duty to give notice of errors and has not demonstrated that the damage requirement set out in LUP has been met,” it said.
The agency is about halfway through the long process of reforming the platform by procuring a more limited selection of quality-assured funds for premium pension savings.
Despite Indecap Fonder having the second-highest AUM in the global equity funds category – after Swedbank Robur Aktiefond Pension with SEK46bn in AUM – it has emerged in the FTN’s response to the court that the losing firm’s tender was only ranked 54th out of 69 in the first evaluation in its procurement.
Receiving just 2.90 points in the evaluation of its tender, the firm also fell short of the 3.20 points required to be interviewed, a stage reached by 27 firms, the FTN revealed.
