AP1 Splits External Portfolio, Reshuffles Management

Sweden’s first national pension “buffer” fund, AP1, has reshuffled its senior management team as part of an overhaul of its strategy implemented by new CIO Mikael Angberg.

The externally-managed portfolio—which makes up roughly a third of assets, according to AP1’s 2013 annual report—has been split into two units. Rikard Kjörling, currently head of external investments, will continue to oversee the third party equity and bond mandates, while Martin Källström has been appointed head of alternative investments.

“I’ve been building on the clarity from the board, and defining processes around portfolio construction for the long term, medium term, and short term.”—Mikael Angberg, AP1 CIOAccording to the 2013 report, AP1’s external mandates consisted of 15.5% in equities and bonds, and 17.7% in hedge funds, private equity, real estate, and a handful of new “alternative” allocations. The fund had SEK 252.5 billion ($35.3 billion, €27.7 billion) in assets at the end of 2013.

Kjörling has led the external management unit since joining AP1 in 2004. Källström joined the fund in 2007 from Aon Hewitt, where he helped set up the company’s investment and actuarial consulting business in Sweden. He has been AP1’s head of hedge funds since 2011.

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Per Lundborg, head of equities, has left the fund after 12 years, with his role passing to Olof Jonasson. Jonasson has been a portfolio manager at AP1 since 2002.

Angberg has been assessing AP1’s strategy and structure since taking charge of the fund in December 2013. Speaking to CIO in July, he said AP1’s board had sought to establish “a best in class modern governance structure” since an internal review last year.

“A lot of high level points were fed to me—I took them on board to reshape the organisation,” Angberg said.

“It brought clarity over the level of risk we can work with, which perhaps wasn’t as clear before. Now it’s very clear what the beliefs of AP1 and the board are.

“It’s been like managing a project. I’ve been building on the clarity from the board, and defining processes around portfolio construction for the long term, medium term, and short term.”

Sweden’s pension system is waiting for clarity from politicians about proposed reforms, which could see the AP system shrink from five funds to three with a new governance structure.

The London Business School has recorded the highest percentage of alumni working in hedge funds, asset management, and private equity, according to eFinancialCareers.

Jobs at private equity firms and hedge funds are difficult to come by, even if you have an MBA from a renowned institution, according to a financial services career website.

The average percentage of the top 35 business school graduates working in hedge funds lingered at 3.8%, eFinancialCareers found. Instead, most opportunities for MBAs could be found in investment banking, with an average of 57.1% of MBAs in front office positions.

According to the website, US business schools were most successful in securing jobs at the top banks, a “not surprising” phenomenon as “banks in Europe, the Middle East, Africa, and Asia have focused more on recruiting at a graduate level and training in-house, [while] banks in the US have maintained their traditional focus on hiring from Ivy League business schools.”

However, US dominance fell behind when looking at percentages of alumni working in private equity, hedge funds, and asset management, eFinancialCareers’ database found.

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The London Business School topped the rankings with 6% of graduates in hedge funds, 14% in asset management, and 23% in private equity. The Columbia Business School took second place with 9% in hedge funds, 17% in asset management, and 16% in private equity.

New York University’s Stern, Oxford’s Saïd, Cornell, Harvard Business School, University of Pennsylvania’s Wharton, Yale, INSEAD, and Milan-based SDA Bocconi made the top ten on the list.

Last week at a panel at Stern, Michael Corbat, chief executive of Citigroup, reinforced the difficulty of breaking into hedge funds and private equity, due to “a limited number of seats in these firms.”

Instead, he argued now is an exciting time to join banking, emphasizing that it “is a business that’s still got the opportunity to grow.”