The AP6 board of directors has adopted a long-term strategic focus until 2030 allocating towards buyouot, venture/growth and secondary.
For buyout the allocation is a combination of fund commitments and co-investments.
Working with a combination of fund investments and co-investments in the buyout portfolio is a key part of the strategy. The value creation that occurs in mature companies make up for the largest portion of the market for private equity.
Within venture/growth and secondary allocation takes place through fund commitments.
Value creation within venture/growth takes place in a smaller portion of private equity which is focused on scaling up startups that have created new services or products. The segment can be divided into three stages: seed-, early- and late-stage. Late-stage venture is the largest category within venture. Secondary transactions occur when investors in a fund would like to divest their holdings before the fund is closed. Compared to buyout, there is a much lower risk with secondaries because the segment is highly diversified.
Selective fund commitments − The portfolio is developed gradually over time through selective fund commitments where the selection is a result of mapping, evaluation and analysis.
Long-term value creation – long-term collaboration − AP6 strives to collaborate with others who share its views on applying a long-term approach to value creation and sustainability. AP6 welcomes collaboration with those who regard sustainability as a means for generating high returns. A very long investment horizon is needed for private equity investments in order to manage the illiquid nature of investments in privately owned companies.
Long-term approach to sustainability is crucial −Sustainability is particularly important, given the long investment horizon and illiquid nature of private equity since opportunities for exiting investments that are not sustainable are limited. With such long-term holdings, it is important to try to assess what is sustainable several years into the future. Sustainability assessments are not only important prior to making a fund commitment or co-investment, but also during the ownership phase, when there are significant opportunities for pursuing sustainability in a sector where the business model is corporate governance.