AP1 to throw further weight behind equities

Published: 30 June, 2008

AP1, the SKr218.79bn (€23.26bn) Swedish buffer fund, is to increase its reliance on equities at the expense of its bond holdings. Johan Magnusson, the fund’s newly appointed managing director, who was headhunted from SEB Investment Management in March, said that the fund “should and can have more exposure to equities”.

Following the results of a recently completed ALM study, Mr Magnusson said: “We have carried out a new ALM study and it has convinced me that we need a high exposure to equities.

“It is a requirement that we hold at least 30 per cent of our portfolio in secure bonds but we are allowed to invest the rest in equities and we need to make sure we use that 70 per cent effectively.”

Currently, the fund has 59 per cent of its assets invested in developed and emerging market equities and 38 per cent in Swedish and foreign bonds. The rest is made up mostly of unlisted assets.

“I do not want to rush into making any changes, and have not communicated anything internally or externally, but we do need to make sure we have got the right long-term asset mix,” he added.

Mr Magnusson, who has spent 25 years in the asset management business, replaced former managing director William af Sandeberg, who postponed his retirement by two months to accommodate Mr Magnusson’s arrival.

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