On 17 December 2019, SWE GVT submitted a bill with proposals for further amendments to the investment rules of the First – Fourth AP Funds, following meeting on 11 December.

• The Swedish parliamentary pension group, has supported the proposed bill.

Background

• Government submitted a proposal to Law Council on amendments to improve ability of buffer funds AP1, AP2, AP3, AP4 to invest in illiquid assets and increase cost efficiency.
• These four funds, each manage a part of the national pension system’s buffer capital.
• Increase AP fund opportunity for higher return and long-term sustainable investments.
• Improve cost-effectiveness, and a longer-term view on investments with illiquid assets.
• Provide the 4 funds with similar conditions as other comparable institutional investor.
• On 1 January 2019 investment rules changed, increased AP funds' ability to invest outside stock exchange and a requirement for sustainability was introduced into management.

Proposals

• Make clear AP funds may make joint investments in unlisted companies via unlisted venture capital companies, but may not assume operational responsibility in them.
• Vote share limit increased from 30% to 35% for all shares in venture capital company.
• The AP funds should be allowed to make side investments in an unlisted company together with a fund in which they invested, and which also invested in the company.
• Retain holding of shares or other units exceeding 10% of voting rights for all shares, within company when listing of real estate companies and venture capital companies.
• Allowed funds to invest in bonds and other receivables that are not issued for general trading indirectly, through investments in mutual funds or venture capital companies.
• May grant loans to real estate companies and unlisted venture capital companies in which they hold shares, and change in law on publicity and confidentiality is proposed.

Proposed Effectiveness

• The intention is for the legislative amendments to enter into force on 1 May 2020.