Updated with correction
AP7, Stockholm, is searching for 10 managers to run a notional €2 billion ($2.6 billion) in unfunded and market-neutral equity and currency, confirmed Nikolaj Eriksen, head of manager search and selection at Copenhagen-based investment consultant Kirstein A/S, which is assisting with the search.
Global, regional, country- or sector-specific equity strategies or developed markets currency strategies will be considered. Up to two of the 10 strategies could be run in currency.
Amundi, Carnegie Asset Management, Danske Capital, Nomura Asset Management and UBS Global Asset Management currently run active equity mandates for the defined contribution plan, while Informed Portfolio Management runs an active currency mandate. All can rebid, said Christian Ragnartz, chief investment officer at AP7. He declined to give mandate sizes for existing managers, but said they were roughly in line with the €100 million to €400 million sizes expected to be awarded in the current search.
Northern Trust Global Investments, State Street Global Advisors and Svenska Handelsbanken roughly split passive management of AP7's 110 billion Swedish kronor ($15.4 billion) equity beta portfolio. Those mandates are not up for bid.
The 120 billion Swedish kronor ($16.8 billion) AP7 employs a strict separation of alpha and beta in its equity portfolio, which it uses to underpin five of its six fund options. It leverages its beta exposure to the MSCI All-Country World index by 50%.
Active managers are market-neutral and have a benchmark return of zero.
"In principle and in practice, that means we don't allocate any capital at all to the (active) manager," Mr. Ragnartz said. "They have to finance their own positions," however, AP7 provides downside collateral.
More information is available on Kirstein's website. Proposals are due June 28; a selection is expected in November.