Swedish pensions and insurance group Folksam announced it has bought SEK4bn (€382m) of shares in Heimstaden Bostad, making it the third largest shareholder in the Nordic residential property firm, with a 7% stake.
The move follows Folksam setting itself the target earlier this autumn of adding SEK20bn to its real estate portfolio over the next few years.
Michael Kjeller, Folksam’s head of asset management and sustainability, said: “This investment is an effective way for us to increase our exposure to residential real estate and we believe it will give our customers a good long-term return.”
The investment — which the pension fund said would happen via a directed share issue by Heimstaden Bostad on 7 January 2020 — is being made by Folksam and its local authority pension fund subsidiary KPA Pension, with life insurance division Folksam Liv investing SEK1.35bn; general insurer Folksam Sak investing SEK750m and KPA Pension investing SEK1.9bn.
“We look forward to being part of Heimstaden Bostad AB’s future plans and working closely with both management and other owners,” said Kjeller.
KPA Pension invested SEK4.3bn in a large Stockholm office property from Nordic real estate investor Areim in September, after its parent company Folksam first announced plans to increase the expansion target for its group property portfolio to SEK20bn from SEK10bn.
At the time, Kjeller said the company was boosting its real estate target partly in order to diversify risk further within its total asset portfolio and also because a large influx of insurance premiums was giving it the capital to do so.