Sweden’s national pension fund, Första AP-fonden (AP1), has invested in an emerging markets equity fund launched by Somerset Capital Management.
The Somerset Emerging Markets Future Leaders fund, which is newly created, will primarily invest in medium-sized businesses that derive the majority of their earnings from emerging markets.
AP1, which has worked with Somerset for the last seven years, has invested $350 million (€294.9 million) as seed capital in the fund.
Somerset said the fund will implement the firm’s own ESG criteria, including company engagement to influence positive change, and not investing in tobacco or fossil fuels industries. This, the firm said, is to accommodate pension funds and other long-term institutional investors around the world.
Somerset partner and co-manager of the fund, Anthony Linehan, said: “The era of badly run, corrupt companies making big profits is coming to an end. Being able to distinguish between those that take corporate governance and sustainability issues seriously and those that don’t will be absolutely crucial in identifying future winners and losers.”
Founded in 2007, Somerset Capital manages around £5.4 billion of assets.
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