SWEDEN – CDC IXIS Asset Management and Schroders have scooped mandates worth SEK1.4bn (e153m) from the default fund of the Swedish premium pension system (PPM) - Sjunde AP-fonden (AP7).

Paris based CDC IXIS Asset Management will manage a SEK1bn European active core mandate, benchmarked against the FTSE World Index Europe.

Schroders has been appointed to a SEK400m (e43.6m) Far Eastern mandate.
The Far Eastern portfolio, which will include assets in Australia, Hong Kong, New Zealand, South Korea, Singapore and Taiwan, and will be benchmarked against the FTSE World Index Asia Pacific, ex Japan.

The 7th AP fund currently has around SEK15bn of assets under management, but in April it expects a SEK6bn inflow when PPM contributions for 1999 are paid in.

In May, according to estimates, new entrants will contribute around SEK3bn to the PPM system.
Some SEK1bn might go to AP7 if young entrants choose to place their contributions in line with the choices of older pension investors.
Last year, around two thirds of the eligible population chose to allocate their assets through commercial funds with the remainder going to AP7.

According to Richard Gröttheim, deputy executive president at AP7, it is company policy to benchmark all portfolios against the FTSE universe except the Swedish briefs, which are compared to Findata’s avkastningsindex. The index, provided by Swedish tracker SIX Findata.

The fund recently announced that it has decided to use only active managers for Japanese and Asia Pacific portfolios, while going for a purely passive approach in the US markets.
In Europe AP7 has split its portfolio in two, with one half passively managed by State Street and the other managed in two active briefs with managers to be announced shortly.

Most of its Swedish investments are managed in-house, with a quarter of it outsourced to State Street and a small part given to an external active manager.

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