2018 was a very good year for the Sixth AP Fund (AP6). Performance has been strong across the entire portfolio of holdings. There was a high level of activity in sales of both direct and indirect portfolio companies, generating a large inflow of capital. Return for the year was 9.6 percent. The rate of investment was once again high in 2018, for both direct investments and fund investments.

The net profit for 2018 amounted to SEK 3,042 (3,470) million, which corresponds to a return of 9.6 (12.3) percent. Internal management costs were SEK 93 (86) million.

“The return generated this year is a result of our dedicated efforts in recent years to engage with funds that have the highest return in sub-segments and geographic locations that are relevant for AP6.  Like before, these collaborations have resulted in interesting opportunities for making direct investments in unlisted companies. On the whole, the investment rate, both for commitments to funds and via direct investments, remained high,” says Karl Swartling, Managing Director of the Sixth AP Fund.

Performance of the funds and companies in which AP6 has invested was very strong in 2018. The return on capital employed in these unlisted investments was 16.1 (20.3) percent for the year. AP6 is a closed fund, so it is relevant to differentiate between capital employed and liquidity. The balance between the two can fluctuate considerably from year to year, e.g. due to major divestments. The temporary excess liquidity generated from the conversion to AP6’s current strategy, continues to diminish, in accordance with plan. The investment rate remained high during the year and many new fund commitments were made. Ten new direct investments were made as well.

AP6’s return should be evaluated with a long-term perspective, since it takes time to create and realize value in unlisted investments. Over the last five years, the annual return on capital employed has been 13,2 percent (11,6), which measures up well against the median for the European PE sector.