AP3, Stockholm, said it boosted assets for the year ended Dec. 31 by 7.3% to 345 billion Swedish kronor ($42 billion).
The pension fund returned 8.8% in 2017, down from 9.4% a year earlier. By comparison, AP3's average annual return was 10.5% in the past five years and 6.1% for the past 10 years.
"Over the year, we worked to contain costs by moving into smaller premises and by reducing the share of hedge funds in the portfolio. We also intensified our cooperation among the AP funds by increasing the number of cooperation groups," Kerstin Hessius, CEO of AP3, said in a separate news release.
The fund's website showed a 49.9% exposure to equities, which returned 17% for the year. The inflation risk category carries a 22.5% exposure, and returned 10.7%. The remaining asset classes recorded flat returns. Some 18.8% of the fund is exposed to fixed income, while 4% of the fund is allocated to credit. The currencies risk and absolute-return categories had 1.5% and 3.9% exposures, respectively.
Also on Friday, AP6, Stockholm, reported it returned 12.3% for calendar 2017, bolstering assets by 12.4% to 31.6 billion Swedish kronor.
The return was up from 6.5% in 2016 and was an annualized 11.6% for the past five years. The 2017 return was boosted by private investments, which delivered a return of 20.3% in 2017, up from 9.5% a year earlier.
"The return that was generated during the year is a result of conscientious efforts to restructure the portfolio and there has been a high rate of investment over the last five years. Also in 2017, a steady flow of attractive investment opportunities from both existing and new partners has resulted in several new investments. Our (investing) strives to be selective when it comes to both partners, and holdings is one of the main contributing factors behind our strong earnings for this year," Karl Swartling, managing director at AP6, said in a news release.
The pension fund's private equity allocation increased to 34% from 31% a year earlier and direct investments increased to 36% from 28% during the same period. The remaining 30%, down from 41% the year before, is held in liquidity assets.