The portfolio of Swedish pension fund Andra AP-fonden (AP2) returned 8.2% in 2024, up from 5.9% the previous year, raising its asset value to 458.9 billion Swedish kronor ($42.9 billion) as of December 31, 2024. The return translated into a 34.9-billion-Swedish-kronor annual investment gain.
The fund’s five-year returns after costs were 5.2% at the end of 2024, down from 6.6% at the end of 2023. Over the past 10 years, AP2 reported annualized returns after costs of 6.3%, compared with a 6.8% 10-year return at the end of 2023.
“We deliver a strong result for the year with a good return, where the largest contribution comes from equities in developed markets and private equity,” said Eva Halvarsson, CEO of AP2, in a statement. “Within fixed-income assets, listed and unlisted credits are key drivers to the result. As the Swedish krona has weakened during the year, currency hedging has had a negative impact on the return.”
During the first half of the year, AP2 registered a 4.9% return after costs, or 20.6 billion Swedish kronor during the period, which it ended with 445.8 billion Swedish kronor in assets. The pension fund attributed the six-month gain to a strong global economy, adding that growth forecasts were upgraded and risk assets performed well, with “several stock indices reaching all-time highs.”
“The equity and fixed income markets have developed well during the first half of 2024,” Halvarsson said in a statement when AP2 announced its first-half results last August. “AP2’s dynamic investment strategy, with continuous adjustments of the Fund’s currency exposure and allocation to equity versus fixed income assets, has contributed to this return.”
Halvarsson also said the fund’s investment team aims to “avoid concentrations in large companies or industries and place high financial and sustainability requirements on our investments.”
Last year was the pension fund’s final full year under former CIO Erik Kleväng Callert, who left AP2 after four years overseeing its investment portfolio to become CEO of Swedish insurance company SEB Trygg Liv. Callert’s successor, Anna Hammer, is scheduled to start in the spring. She is currently CIO of Länsförsäkringar Liv.
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Tags: Andra AP-fonden, Anna Hammer, AP2, Erik Kleväng Callert, Eva Halvarsson, Pension Funds, SEB Trygg Liv Länsförsäkringar Liv, Sweden