Posten Sweden,the Swedish post office, is in the process of setting up a pension fund, which will have a capital fund of Skr9bn ($1.1bn).

The fund will start with sizeable liabilities, says Dag Hasslegren, who will be in charge of the fund. We aim to have an asset allocation where the real liabilities will be secured by fixed in-come securities."

The fund will be capitalised initially with substantial real estate, which will roughly make up 50% of the initial asset allocation - this will be transferred from the post office's own portfolio of property. "This allocation will be changed in line with our ambitions, which means having much less real estate. But we have not made up our minds there yet," says Hasslegren.

"Our next step is that we should always have 100% capitalisation. Any surplus made over and above this can be invested in a more aggressive way." The fund will be 100% capitalised to start with and any surplus will have to be built up.

The greater part of the liquid investments will be in fixed interest, which will be managed at the start by the post office's own giro bank. "External managers will be used for the equities and we are in the process of selecting these." The fund may decide not to announce who they are. A global custodian is also being selected."