Year-end report for 2021
21 February 2021
Both net profit and the return for 2021 were record-high, with a net profit of SEK 22 billion and a return of just over 49 percent. Since its inception, AP6 has contributed SEK 57 billion to the pension system, most of which has been subsequent to the reformulation of its strategy in 2012.
“In 2021, AP6 delivered its strongest performance ever, with a record-high net profit and return. We can see the full impact of our carefully designed, long-term strategy and how the portfolio benefits from a very strong market with high liquidity,” says Katarina Staaf, Managing Director, Sixth AP Fund.
Net profit for 2021 amounted to SEK 22.2 (7.6) billion, which corresponds to a return of 49.1 (20.4) percent. Internal management costs amounted to SEK 98 (89) million.
For the last five-year period, the portfolio has yielded an annual return of 19.1 percent, on average.
“Successfully investing in unlisted assets requires long-term, stable conditions in combination with a very long-term strategy. What the earnings and investment portfolio also demonstrate, is that it takes quite a long time to restructure a portfolio in private equity. We started that process already back in 2012,” says Katarina Staaf, Managing Director, Sixth AP Fund.
The length of the investment horizon, for a single fund commitment, is 7-10 years and for a single co-investment, the holding period is 3-5 years. One important characteristic of the strategy is the combination of high-quality fund commitments and co-investments, where sustainability has been fully integrated throughout the entire investment process and ownership phase.
In 2021, the Swedish National Audit Office (NAO) published its report on the sustainability efforts of the AP funds. The NAO suggested that the Swedish Parliament supplement the AP6 legislation such that it addresses sustainability, as a means of further supporting those efforts. New legislation has been proposed, and if the bill is passed, it will enter into force in July 2022. For nearly a decade already, AP6 has been working with sustainability as an integral part of investing activities and therefore both welcome and support having the sustainability focus also recognized in the fund’s legislation.
Sixth Swedish National Pension Fund (AP6)
Long-term, active investor with the mandate of investing in unlisted assets. One important characteristic of the strategy is the combination of high-quality fund commitments and co-investments, where sustainability has been fully integrated throughout the entire investment process and ownership phase. Since the start, AP6 has contributed SEK 57 billion to the nation’s pension assets. AP6’s fund capital has, since inception in 1996, grown from SEK 10.4 billion to SEK 67.3 billion as of year-end 2021.