Swedish occupational pension fund AMF announced this afternoon it is buying a 12.5% stake in unlisted Swedish electricity network firm Ellevio, acquiring the holding from AP1.
Fredrik Lundeborg, head of infrastructure at AMF, said: “The company fits into our portfolio well, in which we have expanded our infrastructure assets strongly in recent years, and we look forward to being an active and long-term owner of the company.”
He said Ellevio owned and managed an important social resource, and had a central role in the transformation of the energy sector as well as the electrification of Sweden.
AMF did not disclose the price paid for the equity holding and a spokeswoman for AP1 said the purchase price was confidential. However, on AP1’s website, the 12.5% share of the company is stated as valued at SEK1.47bn (€135m) at the end of June.
AP1, one of the main four buffer funds backing the income pension portion of Sweden’s state pension, bought the stake back in 2015 when Johann Magnusson was its chief executive officer.
AMF said it would now own Ellevio together with Canadian pensions manager OMERS and Swedish co-owners Folksam and AP3.
AP1 was the smallest of the four co-owners, with OMERS Infrastructure holding 50% of the company, AP3 owning 20% and Folksam holding 17.5%, according to Ellevio.
Ellevio, Sweden’s second largest electricity network company with approximately 18% of the national market in terms of customers, had net sales of SEK7.2bn in 2021, according to the company’s website.
Asked for comment on the sale of the Ellevio stake, and whether it indicated any wider strategy that the buffer fund was pursuing, the spokeswoman for AP1 said: “Our strategic allocation to infrastructure still applies.”
“Our task is to continuously review the composition of the portfolio to create the best possible return,” she said.
“We received an offer for our ownership stake of 12.5% in Ellevio from AMF, which we evaluated and consider to be attractive and which contributes positively to the income pension system,” the AP1 spokeswoman said.
Katarina Romberg, head of alternative investments at AMF, said that as an occupational pension administrator with a long-term investment horizon and a stable financial position, AMF had particularly good opportunities to make this type of long-term investment in illiquid assets such as energy and infrastructure.
“This is a strength for us, as it means that we can continue to build a good spread of risk, and create the conditions for a stable long-term return for our savers,” said Romberg.
“This strategic direction for our portfolio is important, not least in turbulent and uncertain times,” she added.
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