The Sixth AP Fund is a state-owned pension fund which has the mission of managing part of Sweden’s public pension funds. The Sixth AP Fund has played an active part in the Swedish private equity market since 1996.
The basis for its mission can be found in the Sixth Swedish National Pension Fund Act (2000:193). The mission is centred around three pillars: the overall goal of generating high longterm returns, taking into consideration the need for satisfactory risk diversification and an investment focus on small and medium-sized companies.
The Sixth AP Fund aims to generate a high return on the capital invested and takes into account the need for satisfactory risk diversification by investing in companies which operate in different sectors and are at different stages of development.
The focus on small and medium-sized companies is primarily achieved by two investment strategies: direct investment in companies or indirect investment through private equity funds, equity funds and investment companies. Investments are made in both unlisted and listed companies.
The Sixth AP Fund contributes to Swedish industry by providing access to capital while taking into consideration the need for a long-term and assertive approach, but also by providing different types of expertise through the formation of networks consisting of people with a broad range of skills who are capable of working in or close to companies in need of growth.
Evergreen fund
Unlike the four other Swedish National Pension Funds, the Sixth AP Fund is an evergreen fund, which means that there are no regular payments to or withdrawals from the Sixth AP Fund. This means that the returns from previous investments are re-invested as new private equity in other companies with the aim of providing growth and of generating continued high returns. The liquidity reserve maintained for completing new and follow-on investments and for covering other capital requirements in existing companies is managed by the Sixth AP Fund’s Treasury.
At the inception of the Sixth AP Fund in 1996, it received an initial capital of SEK 10.4 billion.