The Swedish Fund Selection Agency has released preliminary specifications for its next upcoming procurement for the premium pension fund platform, for Swedish equity funds – which will be the agency’s largest procurement to date.

The FTN announced on Friday that there would be two procurements for Swedish equities – for actively-managed Swedish equity funds with a primary focus on large and mid-cap companies, and Swedish index funds with a primary focus on large and mid-cap companies.

The Tumba-based agency said: “The procurements will be carried out in parallel and notice is planned to be made after the summer.”

The twin procurements will be the sixth and seventh from the agency set up in 2022 to boost confidence in the current platform by selecting only the best funds.

The procurement is potentially for some SEK143bn (€12.5bn) of asset management, because there is currently approximately SEK88bn of assets invested in actively-managed large and mid-cap Swedish equity funds, alongside SEK55bn in index funds in that category.

A spokesman for the FTN confirmed this was the largest category announced for procurement so far.

“As we have mentioned, we are prioritising larger categories over smaller ones to transition more capital faster,” he said.

The Swedish Investment Fund Association (Fondbolagens förening) – long critical of the switch to a procured funds platform – warned yesterday in an article on Swedish pensions news service Pensionsnyheterna that it could harm liquidity on the Swedish stock market if the FTN reduced the number of funds on offer to premium pension savers.

Fredrik Nordström, chief executive officer of the lobby group, said: “If there are fewer Swedish funds, it risks leading to poorer liquidity in the market.”

“Managers today can have different strategies and, for example, reduce holdings in certain categories, while others think differently and can therefore absorb the securities sold on the capital market,” he told the news service.

There are currently 34 funds in the Sweden category on the premium pension fund platform with 23 of those being actively-managed funds and 11 are index funds.

Compensation payments

Problems with the old platform, which listed all funds meeting certain criteria and is gradually being phased out as procured funds take over, were highlighted by an announcement this morning by the Swedish Pensions Agency (Pensionsmyndigheten).

The authority said it was now making the first large compensation payment to people who lost money after investing via fund manager Allra back in 2012, with the agency having recouped damages in the Svea Court of Appeal’s judgment against the firm in 2021.

Four people connected with Allra were sentenced to jail by the court for financial crimes.

A sum of SEK95m is being paid out to 86,400 premium pension savers, the authority said.

“The payment represents a partial goal in our work to ensure that those affected by the Allra mess will receive compensation for every kroner they have suffered damage,” said Lena Aronsson, the Pension Agency’s chief legal officer.

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