The First (AP1) and Second Swedish National Pension Fund (AP2) together with TIAA-CREF, a leading financial services provider, have agreed to combine forces in a new joint venture to create a leading, pan-European office investment platform committed to building €4bn+ office portfolio. TH Real Estate, have established the platform for the joint venture and will manage the vehicle on the investors’ behalf, providing investment and asset management services.

The joint venture will be seeded with existing properties owned by the TIAA General Account and AP1 and AP2’s properties in Cityhold Property AB, creating an initial platform valued at €2.2bn comprised of 258,000 sq m of core office space across the UK, France & Germany. With 15 assets (9 contributed from the TIAA General Account and 6 from AP1 & AP2), the current portfolio includes landmark assets such as 12-14 New Fetter Lane and One Kingdom Street in London, Tour Areva in Paris, and Atlantic Haus in Hamburg.

The venture will commence an active investment programme with new capital from the TIAA General Account, AP1 and AP2 targeting an additional c. €2bn of investment over the next 3 years. It will primarily target ‘core’ investments in Tier 1 cities such as London, Paris, Munich, Hamburg, Frankfurt and Berlin. Additionally, the investment programme will invest in ‘value-add’ opportunities such as leasing, renovation and development opportunities in Tier 1 cites, or stabilised core investments within Tier 2 cities that include Madrid and Milan, among other cities.

The newly formed investment vehicle, to be named ‘Cityhold Office Partnership’, will target a loan-to-value ratio of 50%. TIAA-CREF will hold a 50% interest in the vehicle and each AP fund will hold 25%. The joint venture extends the long-term investing partnership between TIAA-CREF and AP2, which has been co-investing with TIAA-CREF since 2012 in various real asset strategies including TIAA-CREF’s timberland strategy and investing in farmland in the United States, Australia and Brazil.

The transaction is expected to close in September.

Johan Magnusson, CEO of AP1, said: “We are excited to merge the existing Cityhold properties with those owned by TIAA-CREF, while also making a commitment to make further investments in the coming years. The greater capital base provides the vehicle with better opportunities to make good long-term investments in commercial properties in a number of selected large European cities.”

Eva Halvarsson, CEO AP2 said: “In 2011, in partnership with AP1, we established Cityhold Property AB with a view to investing in real estate in the major European cities. Now that Cityhold’s property portfolio is being merged with TIAA-CREF’s European portfolio of commercial real estate, we have successfully enhanced and diversified the portfolio of European real estate, in line with the strategy originally outlined for the company. Moreover, with TH Real Estate, we gain an operating partner of considerable expertise, especially with regard to local markets.”

Phil McAndrews, Senior Managing Director and Chief Investment Officer of TIAA-CREF Global Real Estate said: “Our investing partnership with AP1 and AP2, like-minded investors who share our long-term investing horizon and focus on high quality assets, enables us to further diversify TIAA’s existing European office portfolio across asset, tenant and market exposures while establishing a broader platform to expand our European investments.”

Johan Åström, Head of Investment, Sweden, TH Real Estate, said: “We are delighted to have been entrusted to establish this European platform for TIAA-CREF’s and the First and Second AP Fund’s co-ownership of commercial real estate. The platform brings together market-leading investment competence and local property expertise in a joint view on value creation. We look forward to managing, supporting and developing the platform in the years to come.”

Jasper Gilbey, Director at TH Real Estate and lead adviser of the investment vehicle, said: “Our strategy will be to target core office opportunities across Europe with a focus on low risk, liquid markets such as London, Paris, Hamburg, Munich, Berlin and Frankfurt. While the venture will focus on core opportunities, it will also consider value-add opportunities within these core Tier 1 markets, as well as stabilised opportunities in other key European cities, as a means of boosting performance and generating attractive risk adjusted returns. In addition to liquidity and diversity, the target markets have been selected on the basis of their long run structural trends, such as demographics, technology and sustainability, which we expect to drive strong growth prospects and result in enhanced investment performance in the long-term”

For further details contact:
AP1 Ossian Ekdahl, Head of Communications, +46 8-566 20 209, or +46 709-681 209 Oskar Backman, Portfolio manager, +46 709-68 12 53

AP2 Ulrika Danielson, Head of Communications, +46 31-704 29 29, or +46 709-50 16 13 Helena Olin, Head of Real Assets, +46 31-704 29 00

TH Real Estate Helena Winje, Press Contact, +46 8-58 80 95 00, or +46 70-204 94 85

About TIAA-CREF: TIAA-CREF (www.tiaa-cref.org) is a national financial services organization with $869 billion in total assets under management (as of 6/30/2015) and is the leading provider of retirement services in the academic, research, medical and cultural fields

About TIAA-CREF Asset Management: TIAA-CREF Asset Management (https://www.tiaa-cref.org/public/assetmanagement) is a global investment manager, registered investment advisor and wholly-owned subsidiary of TIAA-CREF that provides investment advice and portfolio management services to individual investors, intermediaries and institutional clients, including the TIAA General Account. Its strategies cover a wide array of asset classes, including equities, fixed income, real estate and alternative investments.

About AP1: Första AP-fonden (AP1) is one of five AP funds in the Swedish national income pension system. The capital reserves in the AP funds ensure that pension benefits can be paid even when disbursements from the pension system exceed contributions into it. Första AP-fonden has assets under management of approximately SEK 300 billion in a global portfolio comprising equities, fixed income securities, real estate, private equity funds and hedge funds. Första AP-fonden invests to achieve high and long-term sustainable return. More information about Första AP-fonden at www.ap1.se

About AP2: The Second AP Fund (AP2) is one of northern Europe’s largest pension funds, managing assets totaling more than SEK 300 billion of Sweden’s national pension assets, which are invested worldwide. The Fund is tasked with generating a solid return on investment, while implementing a consistent policy of responsible and sustainable investment. www.ap2.se

About TH Real Estate: TH Real Estate is an established investment management company, specialising in real estate equity and debt investment worldwide. As one of the largest real estate managers in the world, TH Real Estate has the scale, capital resources and knowledge to provide creative and effective real estate investment solutions for clients. With a focus on the retail, office, logistics, debt and multifamily residential sectors, TH Real Estate emphasises sustainable practices to protect assets and maximise their value.

The company is owned by TIAA-CREF, a US financial services and Fortune 100 company, with €791bn assets under management*. Launched in April 2014, TH Real Estate has a dedicated global presence with offices across America, Asia and Europe, representing c.€25.6bn* of real estate assets across c.50 funds and mandates. Together with TIAA-CREF’s US real estate assets, the global real estate platform of €78bn* represents one of the largest real estate investment management enterprises in the world.

Its products are managed by specialist teams, which apply their own experience to the management and style of their portfolios. Each team is supported by an experienced senior management team and integrated investment platform, including finance, debt and currency management, performance analytics, client service, fund and transaction structuring, development, sustainability and research. www.threalestate.com

* Figures as at 30 June 2015.

The Second (AP2) and Third Swedish National Pension Fund (AP3) has jointly performed a procurement of Global Custody Services during 2014 and 2015 and have now decided to award the contract as Global Custodian to Northern Trust for each of the funds.

By conducting a joint procurement AP2 and AP3 could streamline the process by, among other things, sharing experience on operational processes. Further the cooperation created a good position for the funds in respect of negotiations with participants in the procurement.

The procurement was started jointly with an option for the funds to select different global custodians, as various custodian banks can suit the respective Funds’ investment processes better. After completion of the procurement the evaluation of candidates identified one candidate as the most suitable provider of global custodial services for both Funds and as such both Funds has appointed Northern Trust as custodian bank.

The decision means that AP2 will be replacing its current provider while AP3 will be re-appointing Northern Trust.

-We are very pleased with this joint procurement. It has been a valuable exchange of experiences and led to a cost-effective process. It has also showed that the funds already have a very good cooperation on key issues, says Mattias Bylund, CRO at AP3.

Ola Eriksson, Head of Business Support at AP2 agrees in this
– AP2 and AP3 has had a very good cooperation and we are delighted that our vision with the cooperation was fulfilled throughout the process. Cost-effectiveness and price pressure were the two main factors, but the exchange of knowledge was also very positive

– We are delighted to be appointed by Andra AP-fonden and extend our 15-year relationship with Tredje AP-fonden, said Wilson Leech, head of Northern Trust in Europe, Middle East and Africa. – By combining our on the ground presence with our scale as a global custodian we are well positioned to support the needs of the AP funds and look forward to continuing to work with them.

For more information please contact:
Mattias Bylund, CRO and Head of Business Support & Control, AP3, +46 (0)8-555 17 100 or mattias.bylund@ap3.se
Lil Larås Lindgren, Head of Communications, AP3, +46 (0)8-555 17 100 or Lil.Lindgren@ap3.se
Ola Eriksson, Head of Business Support, AP2, +46 (0)31-704 29 21 or ola.eriksson@ap2.se
Ulrika Danielson, Head of Communication & HR, AP2, +46 (0)31-704 29 00 or ulrika.danielson@ap2.se
Camilla Greene, Media Contact: Europe, Middle East, Africa & Asia-Pacific, Northern Trust, +44 (0) 207 982 2176, Camilla_Greene@ntrs.com

Second Swedish National Pension Fund
The Second Swedish National Pension Fund (AP2) is one of five buffer funds – known as AP funds – within the Swedish pension system. Together, the five funds hold around 13% of Sweden’s income pension system assets. AP2’s fund capital totaled SEK 293,907 million at 31 December 2014. The Fund paid SEK 5,120 to the Swedish Pensions Agency during the year to cover the deficit between pension contributions and liabilities. See www.ap2.se for further information.

Third Swedish National Pension Fund
The Third Swedish National Pension Fund (AP3) is one of five buffer funds – known as AP funds – within the Swedish pension system. Together, the five funds hold around 13% of Sweden’s income pension system assets. AP3’s fund capital totaled SEK 288,332 million at 31 December 2014. The Fund paid SEK 5,120 to the Swedish Pensions Agency during the year to cover the deficit between pension contributions and liabilities. See www.ap3.se for further information.

Northern Trust
Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of wealth management, asset servicing, asset management and banking to corporations, institutions, affluent families and individuals. Founded in Chicago in 1889, Northern Trust has offices in the United States in 19 states and Washington, D.C., and 20 international locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of March 31, 2015, Northern Trust had assets under custody of US$6.1 trillion, and assets under management of US$960.1 billion. For 125 years, Northern Trust has earned distinction as an industry leader for exceptional service, financial expertise, integrity and innovation. Visit www.northerntrust.com or follow us on Twitter @NorthernTrust.

Voted by investors in the Nordic region AP2 received price for best innovative thinking and sound investment approach in fixed income investing at the Institutional Investor Nordic roundtable in Stockholm June 2.

The Second AP Fund’s 2015 Female Representation Index (Female Index) reveals that the percentage of women on the boards of companies quoted on the Stockholm Stock Exchange continues to rise, currently amounting to 27.9 percent compared to 24.7 percent for the preceding year. This is the second largest increase since records began. The proportion of women on executive managements has also noted a steady increase, rising to 19.5 (18.4) percent for the year.

“It is very pleasing to witness the greatest increase since 2004 in the percentage of women serving on corporate boards. It demonstrates that stakeholders and nomination committees have exerted greater responsibility. There is still much to do, but I am convinced that this issue has now attracted the attention necessary for accelerating future development in this area and to ensure better utilization of the competence available,” states Eva Halvarsson, CEO of the Second Swedish National Pension Fund/AP2.

The proportion of female directors on the boards of companies with a primary listing on the Stockholm Stock Exchange is now 29.1 (25.5) percent. The proportion of women on the executive managements of these companies is 19.8 (18.9) percent.

The proportion of female directors on the boards of all listed companies, excluding CEOs, totals 29.5 percent, while the figure for primary listed companies is 30.7 percent.

If the pace of change noted over the past decade continues, it will be another 27 years before women fill 50 percent of the seats on corporate boards. The corresponding forecast for achieving 50 percent representation on executive managements is no less than 44 years.

“This year, we have also tried to determine a link between the average age of boards and executive managements and the proportion of women represented on them. Where boards are concerned, the average age does not appear to have any notable effect on the percentage of female directors. Conversely, we can see a rise in female representation on executive managements as the average age of these managements declines,” says Eva Halvarsson.

The 2015 survey reveals that the large-cap companies have achieved the greatest overall increase in female representation at board and executive management level, at 31.5 and 21.2 percent respectively. Mid-cap companies account for the most significant rise in the percentage of female directors on corporate boards, compared with the preceding year, posting an increase of 5.2 percent to 29.8 percent.

This year’s Female Index has revealed something of a shift in the position of the different industrial sectors, compared with previous figures. The Financial Services and Consumer sectors boast the highest number of women on their boards, while the highest percentage of women on executive managements are found in the Media and Financial Services sectors. The Media sector currently distinguishes itself for having the lowest percentage of female board members. The Commodities sector, which has traditionally featured the lowest proportion of women, both in terms of boards and executive managements, has increased female representation on boards to 18.2 (13.6) percent and on executive managements to 14.9 (13.8) percent.

Background to the AP2 Female Index
Since 2003, AP2 has conducted an annual survey together with Nordic Investor Services to measure the number of women in middle management roles, in company management positions and on the boards of companies listed on the stock exchange. The 2015 survey comprised 268 primary and standard-listed companies on the Stockholm Stock Exchange. In addition, the number of women graduating from degree programmes that have traditionally served as a basis for recruitment to company management and boards has also been measured.

For further information, please contact:
Eva Halvarsson, CEO AP2, +46 (0)31 704 29 00
Ulrika Danielson, Communications Manager, +46 (0)709 50 16 13

The figures refer exclusively to companies quoted on the OMX Stockholm Stock Exchange, unless otherwise stated.

The Swedish Government has appointed Kristina Mårtensson as a new member of AP2’s board.

At yesterday’s annual general meeting at Statoil, the Second AP Fund, together with the Fourth AP Fund, submitted a shareholder proposal. The proposal was supported by 99.95 percent and it was proposed that the company will expand its reporting regarding: greenhouse gas emissions, evaluating project portfolio against relevant post-2035 scenarios, the company’s plans in terms of research and development for “low-carbon” energy and how the company takes sustainability into their strategic key indicators and bonus system. The Board of Statoil had recommended the shareholders to support the proposal.

Earlier this spring, AP2, together with a large number of other investors, presented the same shareholder proposal on Shell’s and BP’s annual meetings. These proposals were supported by 98.9 percent and 98.28 percent.

AP2 is ranked 11 in the Asset Owners Disclosure Project’s (AODP) index of the world’s 500 largest investors. AODP has ranked the investors according to the level of effort they put towards mitigating climate risk.

Link to AODP’s homepage.

AP2 have, together with AP4, submitted a shareholder proposal for Statoil’s AGM. It is proposed that the company will expand its reporting regarding: greenhouse gas emissions, evaluating project portfolio against relevant post-2035 scenarios, the company’s plans in terms of research and development for “low-carbon” energy and how the company takes sustainability into their strategic key indicators and bonus system. The Board of Statoil recommends that shareholders to support the proposal.

Ulrika Danielson and Arne Loow representing AP2 and AP4 comment the proposal: “Since oil-related energy companies have challenges ahead in terms of both financial and environmental issues, we see this resolution as a good tool to help Statoil to strengthen its reporting on climate change issues.”

Earlier this spring, AP2, together with a large number of other investors, presented the same shareholder proposal on Shell’s and BP’s annual meetings. The boards of these companies recommended all shareholders to support the proposal. On BP’s annual meeting the proposal was voted through. Statoil’s and Shell’s annual meetings are held on May 19.

Link to the resolution (PDF-document, 131 kB)

Read the recommendation from the Board of Statoil.

Among over 1000 pension funds, the Secon AP Fund´s Sustainability and Corporate Governance Report 2013/2014 has been nominated in the Responsible Investor Reporting Awards 2015.

Winners will be announced on 2-3 June in London.

Read more

The Ethical Council of the AP-Funds builds its process on dialogue with companies both when problems arise in their business and for preventive measures. During 2014 the Ethical Council totaling 308 dialogues and completed three reactive dialogues. The Ethical Council has recommended the AP-Funds to exclude the companies Agrium, Motorola Solutions and Barrick Gold who all have been associated with violations of international conventions.

The Ethical Council has for several years been working with preventive dialogues in order to get companies to act more responsibly and thus reduce the risk that they violate international conventions. A comprehensive preventive project have been focused on the mining industry, where the Ethical Council between 2011 and in 2013 undertook extensive analysis and engagement together with other investors. During the autumn of 2014 the project was evaluated with very positive results on all the parameters measured.

“Preventive and proactive projects are important for the Ethical Council and it is important that these lead to concrete and positive results. Engagement makes a difference.” says Ossian Ekdahl, chairman of the Ethical Council for 2015.” Reactive, event-driven dialogues will always be a part of the Council’s work, but preventive projects is often a better way to achieve change where the companies are more receptive to suggested improvements, in order to avoid future problems.”

In 2014 the Ethical Council conducted 308 dialogues and completed three reactive dialogues.

In three of the dialogues the Ethical Council came to the conclusion that further dialogue was not meaningful and therefore recommended the AP-funds to exclude the companies. The Ethical Council has recommended exclusion of Barrick Gold due to serious negative environmental impact by depositing tailings in river system. The recommendation to exclude Motorola Solutions is based on their involvement in customized monitoring systems for settlements in the occupied parts of the West Bank and finally the company Agrium that intends to continue to buy and use phosphates from the occupied Western Sahara. All funds have followed the recommendations of the Ethical Council.

For further information please contact:

Ossian Ekdahl, Chairman of the Ethical Council 2015
Phone: 0046 (0)8 566 20 209

John Howchin, Secretary-General of the Ethical Council
Telephone: 0046 (0)8 566 20 247

E-mail: info@etikradetapfonderna.se

The Ethical Council is a collaboration between the First, Second, Third and Fourth Swedish National AP-Fund with the goal to influencing companies to a more sustainable business. The Ethical Council was formed in 2007. Our guiding principle is to make a difference by being long-term, responsible and engaged owners that influence companies to improve their work on environmental and social issues. The Ethical Council does that, both by having preventive initiatives and by dialogue with a number of companies that are linked to violations of international conventions on the environmental and human rights issues.

Annual Report 2014 Ethical Council (PDF document, 3,4 MB)