In 2006 AP3 carried out a review of its portfolio structure based on the ambition of making decisions on market exposure (beta) independent from active positions (alpha). The Fund’s aim by separating alpha and beta is to make the portfolio structure more flexible, improved risk diversification and higher cost efficiency in order to increase the potential return.
Beta exposure will be primarily through passive and enhanced management. As part of this process, parts of the internal European equity portfolio have been managed against a fundamentally based index since the second half of 2006. Procurement of enhanced management mandates started in 2007.
Alpha exposure will be primarily through overlay mandates. The Fund already has a number of internal mandates for tactical asset allocation that invest both across and between different asset classes. The Swedish equity portfolio, the European TMT portfolio and currency mandates have in 2007 been replaced by overlay mandates and are now tied to risk exposure instead of market exposure. Procurement of global tactical asset allocation mandates (GTAA) started in 2007 as a further complement to the new alpha strategy.
Asset management operations were partly restructured during the spring in response to the new strategy. Equity management has been consolidated into a single unit by merging the internal equity group with the global equity group. Cecilia Sved, previously head of global equities, has been appointed head of the new Equity Management department. Anders Augusén has been appointed lead portfolio manager and is responsible for the internal and external active risk within equity management.
A new Treasury department has been formed to manage short-term asset allocation, equity execution, repurchase agreements, derivatives and cash management. Hans Ericsson has been appointed head of Treasury.
Moreover, the Communications and Organisational Development department has been merged with the Strategic Allocation department. Hans Lindberg has been appointed head of the new Strategic Allocation and Communications department. He is also part of the Fund’s Executive Management Group.