AP-Fonden 7, with SEK66 billion in assets (GBP4.9 billion), is seeking five managers for its equity portfolio and a single manager to implement a currency overlay strategy. Richard Gröttheim, executive v.p. in Stockholm, cited expiring contracts as the reason for the move. The contracts of five incumbent firms will expire in May; the scheme is tendering now so managers are in place by then.
The mandates are for a total of over GBP3.8 billion, including GBP238 million for European active equity, GBP208 million in Asia Pacific ex-Japan equity, GBP349 million in Japanese active equity and GBP52 million for Swedish active equity. It has also tendered a passive equity brief worth approximately GBP3 billion.
Nomura Asset Management handles the Japanese equity portfolio, Goldman Sachs Asset Management the European equity brief and Carlson Investment Management oversees the Swedish equity mandate. Schroder Investment Management runs the Asia Pacific ex-Japan equity portfolio and State Street Global Advisors handles GBP22 billion in a passive equity brief.
Overall, the scheme is happy with the managers’ performance. Gröttheim hopes that all incumbents participate in the tender process and is particularly pleased with Nomura’s performance. Mark Roxburgh, head of marketing and client servicing at Nomura, did not return calls by press time. Schroder’s performance has picked up in the last six months after a slow period, but Goldman has struggled in the last year. Richard King, spokesman at Schroder, declined to comment. Goldman’s spokesman Simon Eaton did not return calls. In the last year, Carlson’s performance has improved after initially struggling, Gröttheim said. P.O. Ost, marketing director at Carlson, and Kanesh Lakhani, head of European marketing and consultant relations at State Street, did not return calls by press time.
bfinance will assist the fund with the active Japanese and European mandates, while Mercer Investment Consulting will help with the remaining mandates. The deadline for submissions of interest is Feb. 28.
Separately, the scheme has tendered an active currency overlay mandate. The move follows a review completed in 2004 that identified active overlay as the best way to generate alpha (GMM, 3/10). The mandate is worth over 1% of its total assets. It is unclear if the scheme will appoint one or more managers.
AP7 expects to invite between 10-30 firms to participate in the selection process. Mercer will advise on manager selection. The deadline for submissions of interest is Feb. 8.