Swedish Pension Fund AP3 to Shift Investment Model

(February 23, 2010) – This year, Stockholm-based AP Fonden 3 (AP3) is planning on abandoning its management model focusing on traditional asset classes, transitioning to one based on risk categories.

In 2009, the Swedish national pension fund’s assets increased to about $28.5 billion (SEK 206.5 billion), with its alternative investment portfolio — including real estate, private equity and new strategies — accounting for 16.3% of the scheme’s assets, according to IPE. Equities (49.7%) and fixed income (34%) accounted for the remaining.

Following substantial loss in 2008, the national fund’s total return last year was 16.3%, the highest since its inception in 2001.

“Our record profit in 2009 and our highest active return since launching in 2001 show that perseverance and a long-term approach pay dividends,” said CEO Kerstin Hessius. “This excellent result has restored our return on capital to parity with the income index, on which indexation of pensions and pension entitlements is based.”

AP3 started in 2001 with with initial capital of $18.5 billion (SEK 134 billion).