The First and Second Swedish National Pension Funds (AP1 and AP2) have decided to form a joint company in association with Catella, for investment in European real estate. The formation of this company will enable both funds to establish long-term ownership of real estate on the most significant European markets. The company's business strategy is to invest in commercial real estate, focusing on office premises centrally located in major European cities.
The First and Second Swedish National Pension Funds will be joint and equal (50/50) owners of the new real estate investment company, which will have a total equity capital of 500 million. During the initial phase, the First and Second Swedish National Pension Funds have collaborated with Catella, a European finance group. Furthermore, the two funds have signed an agreement with Catella, securing its support in terms of resources, competence and expertise during the build-up phase of the new company.
Rickard Backlund has been appointed to chair the new real estate company. Among previous positions, Rickard Backlund was CEO of Aberdeen Property Investors. The work of appointing the other members of the board and the recruitment of a CEO has already started.
"These investments in real estate can provide us with a solid return relative to the level of risk. As long-term investors, this presents us with a promising opportunity to complement our other real estate investments in Sweden and elsewhere with a number of well chosen properties in Europe. This offers a rapid and cost-efficient means of building up a real estate company that through its investments can utilize knowledge of the local markets," states Johan Magnusson, CEO of Första AP-fonden (First National Swedish Pension Fund/AP1).
"This company will now enable us to complement our current real estate investments in Sweden, Denmark and Germany, broadening our European portfolio. It will enhance the Fund's overall investment focus and is expected to generate a robust and stable return over the long term.
"The form of collaboration chosen provides us with a tailored investment solution which, among other things, is grounded in a shared long-term investment objective and joint requirement of cost-efficient portfolio management," states Eva Halvarsson, CEO of Andra AP-fonden (Second National Swedish Pension Fund/AP2).
"The initiative adopted by the First and Second Swedish National Pension Funds represents a new form of direct investment in foreign real estate. It unites the capacity and financial competence of these institutions with Catella's market know-how and market proximity, with a view to creating long-term value.
"We are proud of the confidence expressed by the First and Second Swedish National Pension Funds in entrusting Catella with this mission," states Johan Ericsson, CEO of Catella AB.