The Third Swedish National Pension Fund (AP3) has appointed managers of US small and midcap equities. The total value of the mandate amounts to 380 million USD.
The mandate is divided into equal size mandates of 190 million USD between Axa Rosenberg Investment Management Ltd and Batterymarch Financial Management Inc. The reference index for the two mandates is Russell 2500 (ex REITs). The portfolios will be managed locally in the US. The two managers have investment styles that complement each other well, contributing to the risk diversification of the portfolio.
The mandates are a part of the Fund’s long term strategy to increase the share of active management. Until now, all of AP3’s holdings of US equities have been allocated to passive or enhanced indexing mandates. The US small and midcap equity market is widely believed to be a market where active management can add value.
In addition to these managers, agreements have been signed with five other managers, making possible future transfer of funds within the same mandate. This is a part of AP3s strategy to create a universe of leading asset managers, within which reallocations can occur when considered appropriate. These managers are Dimensional Fund Advisors Inc, Harris Investment Management Inc, Mazama Capital Management Inc, New Amsterdam Partners LLC and Times Square Capital Management Inc.