Sweden’s AP4 pension fund saw 10.6 billion Swedish korona wiped off its assets in the first half of the year – but Niklas Ekvall, chief executive (pictured), suggests this was reasonable in light of the “brutal” impact on the real economy.
The 2.5% decline in assets under management (AUM) compares to a gain in the same six-month period last year of 13% and 21.7% for the whole year, after costs.
Ekvall said: “A negative result never feels satisfactory, but given the circumstances, our return for the first half of the year can still be regarded as a passing grade for how we have managed to deal with the spring’s market turbulence.”
He said the speed and depth of the economic slowdown far exceeded that of the financial crisis in 2008.
But he added that AP4’s reaction included engaging in “proactive dialogues” with companies and with groups of shareholders of companies that needed capital. This resulted in AP4’s participation in new share issues
The pension scheme, which now has AUM of 403.2 billion Swedish korona, has also co-established an investment company that invests in mainly unlisted, medium-sized Swedish companies. The fund also increased corporate bond holdings that may structurally benefit from the long-term impacts of the Covid-19 crisis.
©2020 funds europe
