With about SEK 440 billion under management in virtually every asset class and all parts of the world, Andra AP-fonden (AP2) is one of northern Europe’s largest pension funds. A secure and stable manager of assets, the Fund is tasked with an important assignment by the Swedish Government – maximizing the long-term return on Swedish pension assets.
AP2 is one of five buffer funds within the Swedish pension system. AP2 shall maximize longterm return at low risk. In conjunction with the other buffer funds, the Fund is tasked with maintaining reasonably consistent pension levels, even during periods affected by peaks in the number of retirees, or by an economic downturn.
The buffer funds account for approximately 18 per cent of the total assets of the pension system. The funds shall adopt a longterm approach, with a view to securing the managed buffer capital over the long-term. AP2’s scientifically-based strategic management model includes long-term forecasts covering demographic, socio-economic and capital-market developments.
Objective linked to the pension system
The aim of AP2’s investment activity, as laid down by the Fund’s Board of Directors, is to minimise the consequences of the automatic balancing for a 30-year horizon by conducting exemplary management of the capital. AP2 has therefore designed a portfolio that is expected to generate a long-term average annual real return of 4.5 per cent.
Strategic management model
The Fund’s strategic management model is based on financial theory and incorporates long-term forecasts covering demographic, socio-economic and capital-market developments. Despite the turbulent financial markets of the past 10–15 years, the Fund’s performance has proved solid, both in absolute terms and in comparison with similar funds, whether seen from a national or international perspective.
Cost-efficient fund management
AP2 is an efficient manager. Seen in an international context, the Fund’s management costs are on a par with those of similar funds. The Fund works consistently to reduce administrative costs where possible – without comprising its focus on an optimal return.
An attractive place to work – with exceptional competence
AP2 is an attractive employer with about 70 employees, all of whom are centrally located in Gothenburg. The Fund employs some of the foremost in their respective fields, as portfolio managers, analysts and other specialists.
Vision and values
AP2’s vision, World-class management, offers both inspiration and guidance for the Fund’s employees. It helps the Fund to motivate and attract employees, and to prioritise and make the right decisions, and covers all parts of the Fund’s activities.
To achieve the Fund’s vision, AP2 works continuously with valuation work that is based on four values: long-term value creation, responsible, respect and continuous improvement. The purpose of the valuation work is to further develop AP2’s strong culture and create consensus around the Fund’s values and to lay the foundation for the valuations to become a tool used in the Fund’s everyday life.
Sustainable and involved ownership
The Fund adopts an active approach to ethical and environmental issues, with a view to promoting sustainable investment. Long-term investment requires companies capable of long-term sustainability, enabling them to generate a solid return that can provide a secure buffer for future pensions.