The Second Swedish National Pension Fund/AP2 has decided to establish a joint venture with US pension fund TIAA-CREF, with a view to investing in agricultural real estate in the USA, Australia and Brazil.
The Second AP Fund is to invest about USD 250 million in a newly formed company that will acquire and manage agricultural real estate in the USA, Australia and Brazil. TIAA-CREF will be the majority shareholder and administrator. The company will first and foremost invest in grain production.
This investment constitutes one element in the Second AP Fund’s broader strategy of diversifying its total portfolio. The return on agricultural real estate is expected to be stable, with low covariance with the Second AP Fund’s other investments, such as equities and bonds. This will serve further diversify the Fund’s portfolio risk.
TIAA-CREF is a leading US retirement provider, with assets of more than USD 400 billion under management. TIAA-CREF has a well-developed platform for agricultural investment where environmental considerations and social responsibility are integrated. The Second AP Fund has carried out a comprehensive sustainability analysis of TIAA-CREF’s guidelines, policies and processes and considers that they are of very high quality. Like the Second AP Fund, TIAA-CREF is a signatory to the UN’s Principles for Responsible Investment (PRI).
“This chance to co-invest with TIAA-CREF presents the Second AP Fund with a highly attractive opportunity. Like us, TIAA-CREF is a long-term investor. The organization has considerable competence in and experience of this type of investment, while also sharing our values and principles. TIAA-CREF enjoys an excellent reputation, not least for its active and progressive work in corporate governance and sustainability. We anticipate that the newly established company’s investments will promote productivity gains and long-term, well-managed and profitable agriculture that, in a sustainable manner, will help meet the growing global demand,” says CEO Eva Halvarsson, Second AP Fund.
For further details:
Eva Halvarsson, CEO, AP2: phone +46 (0)31-704 29 00
Anders Strömblad, Head of External Management, AP2: phone +46 31-704 29 00
Ulrika Danielson, Head of Communications, AP2: phone +46 (0)31-704 29 29, mobile +46 (0)709-50 16 13 www.ap2.se
The Second Swedish National Pension Fund is one of five buffer funds within the Swedish national pension system. The fund are committed to investing Sweden’s pension assets to maximum benefit for the national pension system and to generating a high return at low risk over the long term. At year-end 2010, the Second Swedish National Pension Funds had pension assets of around SEK 220 billion under management.