AP7, the Swedish national pension fund which acts as the default option in the premium pension system, in searching for a consultancy to advise it on a planned procurement of equity risk premia investment management.

The current tender, announced earlier this month and open until the 12 December deadline, is being conducted as the start of a process of procuring equity risk premia managers, the pension fund said.

“The purpose of the published tender is to procure a consultant, who will provide advice and support in the upcoming equity risk premia procurement,” the Stockholm-based investment giant said.

The contract will be for the duration of the upcoming procurement process for equity risk premia managers, the SEK849bn (€84.8bn) fund said.

News that AP7 is in the initial stages of hunting for external managers to provide equity risk premia exposure comes after the pension fund added more risk premia to its equities portfolio in the first half of this year.

In its interim report in August, AP7 said that during the year thus far, further diversification had taken place in the equity fund holdings, by increasing investments in risk premiums and in private equity as well as in other ways.

The pension fund’s equity portfolio grew rapidly in the first half of this year, increasing to SEK783.4bn by the end of June from SEK655.4bn at the end of 2020 – and has almost doubled in value since the end of 2017.

Asked how large the equity risk premia tender would be, and whether it would be a re-tender of existing mandates or an expansion of the current allocation to the investment type, Ingrid Albinsson, CIO of AP7, told IPE the pension fund could not answer this yet.

“All this will be communicated when the procurement is announced,” she said.

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