The 7th fund board of the National Swedish Pension Fund has appointed Sweden’s MeritaNordbanken as custodian for portfolios totalling up to Skr20bn (E2.4bn).
Later this year, Swedish employees will be able to choose where to allocate the 2% of their salary they are obliged to place in investment funds. Those not specifying one of 400 available funds will default to the state-run 7th fund, set up in 1998. Richard Grottheim, deputy CEO of the 7th fund board, expects a third of Swedish workers will opt to use the fund, producing assets of Skr20bn.
Initially, the 7th fund board assumed the portfolio would deal largely in domestic equities. Last year it appointed MeritaNordbanken as custodian over SEB, Swedbank and Handelsbanken, as it was the cheapest. When the portfolio strategy was released earlier this year it focused on global equities and the board decided to sound out international custodians.
“We compared Nordbanken’s offer with some international players and we concluded that Nordbanken can give us the same service at the same price as an international custodian. As we had this tender agreement with them already, we appointed them,” says Grottheim. The fund will launch at the end of September but recieve the bulk of its funds in October when the fund begins its allocation.

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