Sweden's AP funds join forces to launch new infrastructure company
Three of Sweden’s national pension buffer funds have linked up to launch an infrastructure investment firm that will home in on major public and private-sector deals.
In a joint statement, AP1, AP3 and AP4 said Polhem Infra would “create the best conditions for making long-term investments in infrastructure professionally and cost-effectively to meet society’s long-term investment needs”.
The work would focus on collaboration and sustainability, the funds said.
In a joint statement, the chief executives of AP1, AP3 and AP4 — Johan Magnusson, Kerstin Hessius and Niklas Ekvall — said: “Sweden has a great need for both public and private infrastructure investments.
“Parts of the existing infrastructure will require major investments to cope with society’s demands for both quality and sustainability.
“With a long-term ownership and focused sustainability work, Polhem Infra has the potential to become an attractive and prioritised player and business partner, which in the long term will benefit both the pension system and society as a whole.”
Key changes to the investment mandate for the three funds — and the other main buffer fund in the system, AP2 — took effect at the beginning of the year, increasing the funds’ capacity to put money into illiquid and alternative assets.
Polhem Infra defines infrastructure as businesses that operate or provide socially-beneficial services and assets such as renewable power generation, energy storage, energy distribution and digital infrastructure, the funds said, adding that its goal was to be a stable, responsible and long-term owner.
The AP funds involved in the project said they have long experience of investing and building profitable unlisted companies, citing Vasakronan, Hemsö, Ellevio, Rikshem, CityHold and Willhem as examples.
“Infrastructure complements the investment categories equities, bonds and traditional properties, through long, stable and inflation-linked cash flows,” they said.
At the end of 2018, the four main buffer funds had combined capital of SEK1.4trn (€134bn).