Nordic roundup: AP7, Nordic Fixed Income, Catella, Folksam
EUROPE - The equity fund for AP7, the Swedish government choice in the premium pension system, has so far this year lost 17% despite the use of derivatives to increase its exposure to 150%.
However, the fund still beat the OMX index, which is down 23% so far this year, as of 18 August.
AP7's strategic equity allocation is between 100% and 170%, through the use of derivatives. Currently there are no plans to change the 150% exposure.
The 17% loss concerns the savers in AP7 who are fully invested in equities and have not had the equity allocation reduced, an automatic process that offloads equities in favour of bonds as the saver ages.
In other news, Catella, the Stockholm-based European corporate finance and asset management group, has launched Nordic Fixed Income, the first dedicated fixed income house in Sweden.
The firm will focus on corporate bonds, offering fixed income solutions to Nordic borrowers and investors.
Anna Ringby, founder and head of Nordic Fixed Income, said: "Independence from the banks is a major advantage. We offer borrowers tailor-made fixed income solutions at the right market price. Our business concept is also to offer investors fixed income investments with an attractive risk-reward, based on our own analysis."
Johan Ericsson, chief executive at Catella, said: "This represents a strategic investment for Catella. We have an extensive management operation within the fixed income sector, and it is a natural step to develop it into a separate business area.
"We also saw a good opportunity to develop something new with a team that has been ranked at the top of the industry for many years."
Elsewhere, Folksam, the pension and insurance provider, is investing SEK200m (€22m) in wind power, in addition to the four it acquired since the beginning of the year.
Folksam is becoming a partner in PWP, a wind power company, together with FAM, wholly owned by the Wallenberg foundations, and Proventus Capital Partners, a co-investment vehicle focusing on investments in private corporate loans and public corporate bonds.
PWP owns six land-based wind farms with an annual capacity of 0.26 TWh.
Folksam and the other investors will each own a third of PWP.
Power generation from the 47 wind turbines in operation can heat around 13,000 houses with electric heating.
Anders Sundström, president and chief executive at Folksam, said: "We're continuing to invest in wind power to ensure our customers enjoy secure, long-term and profitable growth. Also, the company has several interesting projects on the go, which may further benefit our customers in the future."
Folksam is buying its share in PWP AB from Proventus.