Home ListingOctober 9, 2014

AP1 Splits External Portfolio, Reshuffles Management

Third-party mandates for Sweden’s first national pension fund will be managed under a new structure.

Reported by Featured Author

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.

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.