Sweden's second buffer fund hopes to increase its agricultural and timberland investments beyond the current 10% strategic benchmark for real estate, the fund's chief investment strategist has told IPE.
Speaking shortly after the SEK241bn (€28bn) AP2 announced returns of 13.5% in 2012, boosting its assets under management to the highest-ever level, Tomas Franzén said he was "quite pleased" with the results.
"I would say agriculture and timber is probably a better diversifier [than real estate]. So, to the extent we find the investment vehicles we think will add the value we expect, I guess we will continue building that as well."
He said a potential change in the strategic asset allocation would see overall alternatives exposure increased alonside the current 10% real estate ceiling – and that the latter would likely be weighted in favour of agriculture and timber.
"As long as we get the kind of investments we have been getting so far, it will be more valuable for us to tilt it towards timber and agriculture," he said.