Objectives
High returns, exemplary management and necessary contingency
Första AP-fonden manages income pension capital on behalf of the Swedish Parliament. Our mandate, which permeates everything we do, is to manage pension capital so as to achieve high long-term returns. We maintain a long-term and sustainable approach to investment and are a committed owner.
Overall objectives of our activities
Första AP-fonden is a government agency, and our activities are primarily regulated by the Swedish AP Funds Act. This Act defines how we can allocate our investments between different types of assets. It also states that the Fund has three different objectives for its activities:
1. High returns
Fund assets should be invested so as to achieve high long-term returns at the selected level of risk. There should be a low overall level of risk in the funds’ investments.
2. Exemplary management
Fund assets are to be managed in an exemplary manner through responsible investment and stewardship. The Fund should also promote sustainable development without compromising the objective set out in point 1.
3. Necessary contingency
The Fund should have the necessary contingency to be able to transfer funds to the Swedish Pensions Agency as required.
Första AP-fonden’s return targets
The Första AP-fonden Board of Directors decides how much financial risk the Fund should accept and sets the Fund’s return targets:
The Fund’s medium-term real return target on the total portfolio after expenses is 3.0 per cent per annum, measured over rolling ten-year periods.
The long-term return target, over a period of 40 years, is for a 4 per cent average real annual return after expenses.
While the Fund’s mandate is to generate a return on pension capital, we aim to increase investments in assets that promote sustainable development. Our emphasis is on investments that meet the Fund’s overall return targets while also helping to bring about major sustainability effects in relation to invested capital.