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Just over 24 percent of AP3’s portfolio consists of alternative investments. These investments include unlisted equities such as real estate, timberland, infrastructure, private equity and insurance-linked securities.


Real estate and infrastructure

Real estate accounts for a substantial part of the AP3 portfolio. Investing in real estate offers potential for relatively stable returns and a degree of protection towards inflation. As an illiquid asset tailored to specific operating activities, property offers a risk premium to investors a higher potential return. AP3´s strategy is to focus on Sweden through majority-owned real estate companies that enable the Fund to capitalise on its status as a long-term, responsible owner.

The real estate portfolio includes the companies Vasakronan, Hemsö, Trophi, Regio and Trenum that contribute to building Sweden. Of the companies in the portfolio AP3 has been a part of the foundation of Hemsö, Trophi, Regio and Trenum. A sizeable equity interest gives AP3 the ability to exert active stewardship and take a proactive part in developing the company’s strategy. Board membership is an effective way to exercise influence and drive sustainability efforts forward.

Within infrastructure AP3 invests in listed and unlisted funds as well as through direct investments. Infrastructure investments fit well with AP3’s long-term mission and the amendments to the National Pension Insurance Funds Act allow for increased investment in unlisted assets that boosts AP3’s scope to invest in infrastructure. As is the case for real estate, infrastructure are illiquid assets tailored to specific operating activities. Infrastructure assets are a key pillar of sustainable social development; these are physical assets whose return and value are linked to inflation and has high potential for a stable return.

In Sweden AP3 focuses on direct investments, while international investments are through both infrastructure funds and direct investments. The largest holding is the electricity distribution company Ellevio, acquired by a consortium of Ap1, AP3, Folksam and the Canadian pension fund OMERS in 2015. In addition to Ellevio, the infrastructure portfolio also includes investments in social infrastructure, water treatment, transport and renewable energy sources. 


Major real estate and infrastructure holdings       

Vasakronan – Sweden’s largest real estate company

Vasakronan is Sweden’s largest real estate company. The company owns, manages and develops commercial real estate in Stockholm, Uppsala, Gothenburg and Malmö and is owned in equal shares by AP1, AP2, AP3 and AP4. Vasakronan is a climate-neutral property manager that has more than halved energy consumption across its portfolio since 2008. Green finance accounts for 47% of the company’s borrowings and all new leases are green. Find out more at



Hemsö – Social infrastructure

Hemsö is the leading owner of properties for public use in Sweden and Sweden’s largest private owner of residential care homes, schools and penal institutions. Their vision is to strengthen the backbone of our society. It owns properties in Sweden, Finland and Germany. The company actively seeks to integrate social, environmental and financial sustainability in its operations. Find out more at


Trophi – Retail properties

Trophi is th eleading Nordic real estate company for grocery and retail properties, located in Sweden and Finland. The largest tenants are ICA, Coop, S-gruppen and Kesko. Trophi is wholly owned by AP3. The company works with tenants to promote sustainability through green lease contract clauses, sustainable materials and greater use of renewable energy through the installation of solar panels and geothermal energy in locations such as Uppsala. Find out more at

Regio – Regional properties

Regio is a long-term owner of commercial property focused on expansive regional cities. AP3 owns 96% of the company, which is operated by co-owner Brunswick Real Estate. Property management and development is in collaboration with local partners. All Regio properties are sustainability classified and have a clear focus on energy, resource and materials use. The company also engages in property development projects to increase social utility. Find out more at


Trenum – Building residential rental properties

Trenum focuses on new leasehold residential properties in Sweden’s three largest cities and other growth centres. The company is equally owned by AP3 and Fastighets AB Balder. All Regio-built properties are environmentally certified. Find out more at

Ellevio – Electricity distribution across the country

Ellevio is one of Sweden’s largest electricity distributors and supplies electricity to more than 960,000 households across much of the country. The company has about 500 employees and is responsible for just over 3,000 jobs nationwide. The company is a key player in the transition to a post-carbon society. Ellevio makes substantial investments in providing modern electricity grid services for rural areas and upgrading the existing grids in and around Swedish cities. Find out more at


Polhem Infra – A new way to invest in infrastructure

AP3 partnered up with AP1 and AP4 to found Polhem Infra as a means to securing long-term and cost-efficient investments in Swedish and Nordic infrastructure. Polhem Infra targets large infrastructure investments in the private and public sectors with a focus on collaboration and sustainability. It invests with other long-term industrial and financial partners and aspires to be a stable, responsible and long-term owner. Find out more at




AP3 began investing in timberland in 2004 and now owns 280,000 hectares of production forest. These holdings are to a major part directly owned but also held through a group of 10 or so funds. The forests are sustainably managed and 95% are environmentally certified. Around 6,300 hectares are set aside for nature conservation. The timber is used primarily for building materials, furniture and to manufacture paper products.

AP3 owns timberland in Sweden, America, North America, Africa and Oceania, mainly directly through Three Tree and Gysinge Skog, but also through a dozen forest funds. Investing in different regions and tree species diversifies the risk. Trees grow faster in tropical regions than in Sweden. In many cases, timber from tropical zones is sold into other markets, which promotes risk diversification as well.

Timberland is a good long-term investment and an excellent fit for the AP3 portfolio. Forests take decades to grow and as they do so they store carbon dioxide independently of the business cycle. AP3’s forests store a total of 25 million tonnes of carbon and in 2020 their annual growth sequestered 1.2 million tonnes of atmospheric carbon. The Fund’s timberland holdings can also be expected to generate strong returns also if climate scenarios turn negative. For example, increased atmospheric carbon and higher temperatures due to global warming are likely to promote faster tree growth in Sweden. Hence, timberland adds stability to AP3’s overall investment returns over time.

Forests are the historic source of raw material for the pulp and timber industries and remain so today. New segments such as wood chips, biofuel and new alternative materials are also emerging. In building construction, interest is growing in replacing materials like concrete and steel with wood as a way to save energy and store carbon. By working closely with new and existing strategic partners, AP3 sees great potential for providing sustainable timber and other wood-based raw material to the industry.


pine plants ready to growGysinge Skog

Gysinge Skog manages approximately 60,000 hectares of productive forest land, mainly in Central Sweden in the counties of Dalarna, Uppsala, Gävleborg, Örebro and Västmanland. There is also a larger holding in Jämtland County. AP3 and Kåpan each own half of Gysinge Skog. The company conducts long-term and environmentally sound forestry with sustainable profitability. It also leases out land and water for hunting and fishing and leases land for mining and wind power. Forestry is certified. Read more at



Three treeThree tree logo with three green trees

Three Tree is an American timberland company wholly owned by AP3.  The company manages and invests sustainably for the long term in North American timberland assets. Three Tree invests strategically and long-term in forest assets in the United States. The company currently owns forests in Oregon and Texas, a total of approximately 140,000 acres, two regions with a long tradition of forestry and well-developed forest industries where the right conditions exist for sustainable modern forestry. The forest is managed long-term and sustainably by local partners and forest managers. Douglas fir and Loblolly pine grow mainly on the company’s land, tree species whose primary use is as structural timber and pulpwood. Forestry is certified. 



Private Equity

Private Equity is the name for investments in the share capital of companies that are not listed on a stock market. AP3 invests in private equity through investments in specialised private equity funds that help create sustainable companies through active ownership, whereby both expertise and capital are invested in the companies

AP3’s primary reason for investing in private equity funds is to generate a higher return compared to listed equities. Since valuation creation processes differ between private equity and listed companies, these investments are also a way to diversify the portfolio. AP3 focuses on funds and managers which have demonstrated strong returns over an extended period of time and with which our relationships are well established. AP3’s strategy is primarily focused on buy-out funds and the mid-market.

AP3 has been investing in private equity funds since 2001, since when the private equity industry has grown substantially. A standard investment time frame used to be 10 years, but today funds with longer durations of, for example, 15 years are not uncommon. AP3 utilises these longer fund lives to pursue active ownership. 


Insurance, climate and weather-related investments

AP3 has been investing in different types of insurance-, climate- and weather-related securities since 2008. Holdings include catastrophe bonds, which are traded outside the traditional financial markets. Returns on these instruments have a low correlation with other investments, which means they help to diversify the portfolio.

Investments in insurance risk are strategic, long-term and help to make insurance markets more efficient. Pandemic insurance helps to channel capital quickly to relief efforts.

In this area, AP3 systematically takes on different types of insurance risk, for instance the risk of hurricanes, earthquakes or flooding. During years when disaster occurrence is low, we can expect to achieve good returns. In years when disasters are more prevalent, significant losses can arise. It is this risk that AP3 is paid to take on. Over time, the Fund expects to earn favourable risk-adjusted returns in this area.

AP3 has developed specialist competence in this area and built effective networks by connecting with strategic partners, universities and research institutions. This strategy illustrates AP3’s long-term approach and ability to conduct effective internal management of complex assets.

This strategy looked attractive when first designed 10 years ago. In hindsight, it has more than matched expectations. The Fund has done well even in peak disaster years like 2011 and 2017. Analysing and tracking climate trends enables AP3 to make informed investment decisions. Climate change may be a rapid process geologically speaking, but from a financial perspective it is slow. AP3 invests in instruments with a maturity of three years, which means that their pricing adjusts much faster than climate risk.