At inception, AP6 was entrusted with an amount of capital to invest in unlisted assets (private equity). The fund’s role and operations are governed by the Sixth Swedish National Pension Fund Act (2000:193). Fund assets are to be invested such that the requirements for a long-term high return with adequate risk diversification are met.
Private equity investments differ quite significantly from investments in, and management of, listed shares. An unlisted company is not listed on a stock market where its shares can be traded. Private equity investments are illiquid assets. Unlike listed companies, a private company is typically owned by a much smaller number of owners (or perhaps even just one owner) who run and develop it. To trade an unlisted company owners need to reach a deal agreement directly with a buyer, alternatively list it on a public stock exchange. Private Equity consists of large, privately-owned companies.