The AP Funds have been commissioned by the Swedish Government to implement Parliament’s decision regarding a more efficient management of the buffer capital of the pension system. This includes integrating the AP6 into the buffer fund system by transferring its assets and liabilities to AP2. AP2 is committed to implementing this decision in a responsible and professional manner.

AP2’s mandate remains unchanged – A diversified buffer fund for the benefit of the pension system

Parliament has confirmed that AP2’s mandate remains unchanged. The Fund will continue to operate as a diversified buffer fund with a portfolio where return and risk are carefully balanced to ensure secure pensions for current and future generations. Asset allocation will be guided by what best serves the pension system. According to legislation, the allocation between different asset classes, including private equity, shall be based on an Asset and Liability Management (ALM) analysis.

What is the optimal share of private equity for future pensioners?

Private equity investments offer high expected returns but also entail higher risk compared to many other asset classes. AP2’s mission is to manage the Swedish people’s pension capital responsibly, with consideration for both return and risk. During spring 2025, AP2 conducted a comprehensive ALM analysis which concluded that a strategic allocation of 15 per cent to private equity is appropriate for the Fund. This is a high proportion compared to other pension funds globally. A higher allocation would improve expected returns slightly but would also significantly increase risk, thereby reducing the risk-adjusted return.

What will happen to AP6’s assets?

AP6 assets will be split into two parts – one part will be incorporated into AP2’s long-term private equity portfolio, while the other will be managed separately in a transition portfolio. The Government has appointed a coordinator to support the implementation, and to make a recommendation for the Government decision about the division of assets. AP2 has provided the coordinator with input for this analysis, and the coordinator has submitted an interim report to the Government. The input from AP2 is based on the desired long-term share of private equity in AP2’s portfolio, as outlined above, and a thorough analysis of AP6’s investments. AP2 will manage the transition portfolio with the same diligence, professionalism and care as its existing private equity portfolio. The focus will be on creating value and generating liquidity over time, without accelerating divestments.

AP2 has longstanding experience and expertise in private equity

AP2 has over 20 years of experience in private equity investments and already successfully manages a private equity portfolio of approximately SEK 55 billion. As of mid-year, the total portfolio amounted to SEK 458 billion.

Return of AP2’s private equity portfolio over three time horizons, average annual return
2012-2024 (13 years)	18,7 %
2015-2024 (10 years)	18,3 %
2020-2024 (5 years)	20,8 %

With a long track record and strong performance over time, AP2 has demonstrated the competence required to manage AP6’s assets and will continue the valuable work AP6 has done in building its portfolio. Approximately 25 employees across more than 10 different functions are currently involved in managing AP2’s private equity portfolio. Given the increased size of assets under management, AP2 is currently recruiting several additional employees.

What happens next?

The coordinator’s interim report regarding the asset allocation has now been submitted, and AP2 awaits the Government’s decision. Meanwhile, AP2 continues its work and takes responsibility for implementing Parliament’s decision, contributing to secure pensions for current and future pensioners. This work began as soon as the Government communicated the content of the proposal in January. Collaboration between AP2 and AP6 is ongoing, with seven dedicated working groups addressing key areas such as assets, business support and legal matters.