28 November, 2018

Investment activities

 

Fund, Direct and Secondary

 

Summary of the investment strategy

  • Specialized in private equity
  • Selective investment initiatives based on own analyses and assessments
  • Combines Direct Investments and Fund Commitments
  • Implements transactions for Secondary
  • Diversification across sectors and investment years.
  • Strong European presence with access to the North American market
  • Long-term, close collaboration with active corporate governance and impact

Fund Investments

AP6 is selective with its fund commitments. It only seeks collaboration with the best potential partners. When choosing partners, AP6 considers such aspects as return, investment strategy, sustainability efforts and fees. For obvious reasons, there is tough competition among investors wanting to invest in private equity firms with a long history of delivering high returns.
AP6 has in-house expertise and a strong market position that makes it an an attractive partner. This gives AP6 access to more of the top-ranking private equity firms for their particular investment focus.

Direct Investments

When AP6 decides to make direct investments in an unlisted companies, it does so with other partners who have extensive experience. These might be major investment companies or other private equity firms. When making such investments with others, AP6 seeks to obtain a minority holding.
AP6’s direct investments fall into two categories. One category is joint investments, where AP6 has an active ownership role and a large holding (less than 50 percent, however). The second category is co-investments, where AP6 invests in a fund and then invests directly in a company together with the fund. For this type of investment, AP6’s holding is typically around 2-15 percent. Co-investments are typically executed without any fees or profit sharing, which results in lower management costs compared to traditional fund commitments. 

Secondary

Acquiring a fund share from an investor wanting to sell before the fund is closed often requires a tailored solution, where several investors are brought together. Because of the high level of complexity associated with such transactions, AP6 only collaborates with international partners specialized in this area. AP6 also executes secondary transactions where AP6 is an LP in the fund.

What makes AP6’s strategy so attractive:

  • Highly specialized in private equity – experience and expertise provides security and predictability to partners
  • Ability to meet high requirements on decision processes and delivery at a specified time
  • The combination of Fund Investments and Direct Investments creates flexibility and enables various types of business collaboration
  • Minority investors – AP6 is a partner, never a competitor
  • A leader in sustainability for private equity – challenges and facilitates its partners’ development
  • Manages public pension funds and represents the Swedish government – stable, reliable and long-term