Swedish roundup: Norrporten, Vasakronan, Finansinspektionen, Pensionsmyndigheten
SWEDEN - The AP funds have boosted their property holdings through real estate companies Norrporten and Vasakronan, both of which are co-owned by a number of the national buffer funds.
Norrporten, jointly owned by AP1 and AP6, has acquired a SEK1.1bn (€124m) property from Handelsbanken Liv, the life arm of the Swedish banking group.
The deal consists of an entire block in the centre of Stockholm, with a total area of 53,000 square meters of mainly office space.
Following the deal, Norrporten now owns some 80,000 square meters of space in Stockholm.
The acquisition has lead to a recruitment drive at Norrporten, which is to establish its own local presence in the Swedish capital.
AP2 returned -2.1% for the full year 2011, whereas AP6 has yet to release its performance figures for 2011.
In another deal, Vasakronan - owned by AP1, 2, 3 and 4 - has acquired a property worth SEK2.15bn from Diligentia, the real estate company owned by Skandia Liv.
The project consists of 12 properties in the centre of Gothenburg, the second largest city in Sweden.
The deal makes Vasakronan the largest player in the office and city centre retail space in Gothenburg.
Recently Vasakronan sold its holding in Nacka Strand in Stockholm for SEK2.95bn and has expressed an interest in expanding in Gothenburg.
AP1 returned -1.9% for the full year 2011, with AP3 being the laggard of all the funds at -2.5%, and AP4 posting the best performance for the year at -0.7%.
In other news, weak equity markets and historically low interest rates have eroded most pension and life companies' solvency levels, yet the regulator (Finansinspektionen) has maintained that funding is generally adequate.
In its annual report, the regulator said the average guaranteed return for the industry was 3.5%, relatively high in the current low-interest rate environment.
Due to the current economic climate, the regulator has spent extra time looking into the solvency situation in the life and pensions industry.
During the year, some companies were called on to report their solvency levels on a weekly basis, as well as extra reporting on other capital adequacy measurements.
The regulator's report found that most had solvency levels above the minimum requirement stipulated by law.
It also identified a lack of knowledge about the regulatory requirements and said the transition to Solvency II in January 2014 would require further preparation, which the regulator is also monitoring.
Lastly, according to the annual report of the Swedish Pensions Agency (Pensionsmyndigheten), 2011 was a good year for the Swedish public pension system, with assets now 2% - or SEK157bn - higher than liabilities.
The agency cited the fact there are more people in employment paying fees into the system, and that the increase in liabilities has slowed because pensions were reduced in 2011.