Sweden’s second national pension fund AP2 has appointed State Street to provide investment services, including global custody and fund accounting, for its $14bn (E14.3bn) in assets.
Eighteen months ago it hired Svenska Handelsbanken as sole custodian and cash manager but in doing so looked no further than Sweden.
But European law stipulates that, as a state-owned fund, it has to issue an RFP to custodians outside the country.
Chief financial officer Lena Smeby Udesen says the decision to appoint State Street was for this reason and that Svenska has provided a satisfactory service.
AP2 has yet to finalise the working arrangement between the two but Svenska loses out under the deal.
It will continue to provide cash management but, says Smeby Udesen: “we now have one custodian and that is State Street.”
AP2 is one of four buffer funds created as part of the May 2000 reorganisation of Sweden's national pension system. It began operating at the beginning of last year.
The scheme is the second Swedish fund to select State Street as its investment services provider. Recently Siemens's Sverige Pensionsstiftelse appointed it to provide custody, accounting, performance and analytics and global forex services.
With $6.3trn in assets under custody and $808bn in assets under management, State Street is headquartered in Boston and operates in 22 countries.

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