Hermes Investment Management wins $400 million Global High Yield mandate

Hermes Investment Management, the £30.1 billion manager (30.6 2017), has been appointed to manage a $400 million Global High Yield credit investment mandate by Första AP-Fonden (AP1), one of five buffer funds in the Swedish national income pension scheme. The mandate was driven by a desire to improve the geographical diversification of high yield exposure, with the SEK 323 billion Fund (30.6 2017) recognising the benefits in selecting a manager with a truly global approach to high yield.

The aims of the mandate are aligned with Hermes’ commitment to delivering long-term strong and holistic returns for investors, thus creating value for all stakeholders in the financial system. The credit team places high importance on combining investing with engagement in order to improve outcomes for investors, the company and its employees, all stakeholders and the environment.

Assessing ESG risk to credit valuations, returns and society is a fundamental part of Hermes Credit’s investment process when analysing issuers. They are able to draw upon multiple sources of information, including Hermes’ proprietary ESG Dashboard reports on listed companies and the insights gained by the corporate engagement specialists in Hermes EOS. An A+ PRI rating and Hermes’ participation with the UN Global Compact is testament to its skills and passion in this field.

Majdi Chammas, Head of External Management and Tina Rönnholm, Portfolio Manager responsible for external High Yield investments at AP1, said: We are delighted to announce the appointment of Hermes Investment Management as one of our High Yield managers, following a comprehensive, global tender process. We share the same belief around our duty of delivering strong returns to our stakeholders, including considering the impact on society as a whole. The team is very advanced in the way they integrate ESG issues in their core investment process. Their innovative approach of pricing ESG risks in terms of spread in their fundamental credit analysis is leading in the industry.

Fraser Lundie and Mitch Reznick, Co-Heads of Credit, Hermes Investment Management, said: “We are delighted to be partnering with AP1 on this mandate. They are one of the most innovative and forward-thinking pension funds. Our Credit offering sits at the confluence of industry-leading credit management and a pioneering approach to ESG integration, which includes the pricing of ESG risks as well as analysis. Clearly they, like us, believe that creditors have as much interest as shareholders in seeing companies’ ESG practices improve and that active engagement can facilitate those improvements.”

For further information, please contact:

Hermes Investment Management

Jeannie Dumas

+44 (0)20 7680 2152

jeannie.dumas@hermes-investment.com

Melanie Bradley

+44 (0)20 7680 2218

Melanie.bradley@hermes-investment.com

Rachael Dowers

+44 (0)20 7680 4698

rachael.dowers@hermes-investment.com

Read the press release here.

2019

Första AP-fonden provides additional information regarding the departure of Chief Executive Officer Johan Magnusson

On 2 September, Första AP-fonden (AP1) announced that the board had decided to dismiss Johan Magnusson from his role as Chief Executive Officer due to his violation of the internal regulations of the fund. The fund has now concluded its assessment of the need for confidentiality in accordance with the Swedish Public Access to Information and Secrecy Act in relation to the information, and has decided to publish further details.

Johan Magnusson to leave AP1. Teresa Isele appointed Acting CEO.

The Board of Directors of Första AP-fonden (AP1), Sweden’s First National Pension Fund, has decided to dismiss Johan Magnusson from his post as CEO with immediate effect.

Första AP-fonden’s return for the first half of 2019 was 9.7 per cent after expenses

Första AP-fonden’s (AP1’s) positive net investment income of SEK 31.4 billion for the first six months of 2019 entails an increase in total net assets to SEK 352 billion as per 30 June. AP1 thereby exceeds the long-term target of a real return after expenses of 4.0 per cent over a rolling ten-year period. During the first six months of 2019, SEK 3.0 billion was transferred to the income pension system.

Första AP-fonden has decided to accept the public offer of Oriflame

Första AP-fonden har beslutat att acceptera det publika budet på Oriflame om 227 kronor per aktie.

The Council on Ethics of the Swedish AP Funds Annual Report 2018: New issues in focus during 2018

For more than 10 years, the AP Funds’ Council on Ethics has exercised influence on the AP Funds’ global portfolio of listed companies to improve their environmental, human rights and corporate governance work through engagement and dialogue. During 2018, the engagement and efforts of the Council on Ethics have been directed at problem areas such as Facebook and human rights; the use of pesticides threatening the survival of bees; and the legalisation of cannabis in Canada and the emergence of listed cannabis companies. Other focus areas have been oil companies’ long-term climate work, deforestation in South America, and tailings dams in Brazil.

Swedish AP Funds form new company – Polhem Infra – for investments in infrastructure

AP1, AP3 and AP4 (Swedish National Pension Funds) form a joint company, Polhem Infra, for investments in unlisted Swedish companies focusing on infrastructure.

Första AP-fonden Ownership Report 2018: focus on developing sustainability work and preparing for changes to the AP Funds Act

Första AP-fonden (AP1) publishes its Ownership Report (English version) for 2018 today. Developments in the field of sustainability continued at a fast pace during the year. Intensive preparations were made ahead of the changes to the AP Funds Act, in partnership with the other AP Funds.

Decision regarding the procurement of Investment Management services for Global Emerging Markets Equities

In the procurement for External Management of Global Emerging Markets Equities (reg.no EXT2018:25) Första AP-fonden has decided to approve several managers.

Första AP-fonden Annual Report 2018: Exceeding the long-term goal

Första AP-fonden’s (AP1’s) net investment income for 2018 as a whole amounted to SEK -2,074 million (29,349) after expenses. This equals a return of -0.7 per cent (9.6). Total net assets amounted to SEK 324 billion at the year-end. The average annual real return after expenses for the past ten-year period is 7.4 per cent, which is higher than the target of 4.0 per cent.

Changes to the AP Funds Act

On 1 January 2019, the rules in the National Pension Insurance Funds (AP Funds) Act changed. For example, a new goal has been introduced that the First, Second, Third and Fourth AP Funds must contribute to sustainable development by managing their funds in an exemplary way.

2018

Swedish National Pension Fund Första AP-fonden (AP1) to Measure Sustainability Through Arabesque S-Ray®

Arabesque S-Ray® and AP1 are working closely together to develop a sustainability score assessing the compliance of companies with Human Rights.

Young employees give new perspectives

New recruits at Första AP-fonden (AP1) are plunged straight into the core business and have an opportunity to influence the results.

Financial institutions launch cutting-edge research project to integrate climate change into strategic investment decisions

The financial institutions AP1, a.s.r., OPTrust, Pensioenfonds van de Metalektro (PME) and Philips Pensioenfonds, supported by Ortec Finance - the provider of investment decision technology and solutions - announce the launch of their climate-savvy Asset Liability Management/Strategic Asset Allocation (ALM/SAA) pilot project.

Green financing for Willhem AB

Första AP-fonden’s (AP1’s) wholly owned housing company Willhem is planning to issue a ‘green bond’ to fund its environmental initiatives.

Första AP-fonden’s return for the first half of 2018

Första AP-fonden’s (AP1’s) net investment income for the first half of 2018 amounted to SEK 8.5 billion (16.1) after expenses.

Important for a board member to dare to say no

The nomination committee helps ensure that the Board of Directors is comprised of the right areas of expertise.

AP1 invests in new Emerging Markets Equity Impact fund of BlackRock

BlackRock has launched the BlackRock Emerging Markets Equity Impact Fund, responding to Swedish pension fund AP1’s wishes to invest with sustainability considerations in the emerging markets.

Sustainable investments on emerging markets

Första AP-fonden (AP1) is investing in a new, data-driven fund with a sustainability emphasis, with investment management company BlackRock. The focus is on emerging markets.

The Council on Ethics focuses on counteracting corruption

The Council on Ethics of the Swedish National Pension Funds (the Council) celebrated ten years in 2017. During these ten years, the Council has influenced global portfolio companies to improve their work and information regarding environmental, social issues and corporate governance through corporate dialogues.

Första AP-fonden’s return for 2017 was 9.6 per cent after expenses

Första AP-fonden’s (AP1’s) net investment income for 2017 as a whole amounted to SEK 29.3 (27.0) billion after expenses.

2017

Climate Action+

Första AP-fonden (AP1) has signed the Climate Action 100+, a collaborative five-year global initiative.

Hermes Investment Management wins $400 million Global High Yield mandate

Hermes Investment Management, the £30.1 billion manager (30.6 2017), has been appointed to manage a $400 million Global High Yield credit investment mandate by Första AP-Fonden (AP1), one of five buffer funds in the Swedish national income pension scheme.

Första AP-fonden’s return for the first half of 2017 was 5.2 per cent after expenses

Första AP-fonden’s (AP1’s) net investment income for the first half of 2017 amounted to SEK 16.1 billion (10.6) after expenses. This equals a return of 5.2 per cent (3.5).

The Ethical Council Annual Report 2016 – Human rights continues to be in focus

The Ethical Council of the Swedish AP Funds celebrates ten years 2017. During these ten years the Council has through engagement encouraged the AP Funds' global portfolio companies to improve their work on environmental issues, human rights and corruption.

Elo, Första AP-fonden and Trevian establish a joint venture to invest in Finnish real estate

Elo Mutual Pension Insurance, Första AP-fonden (AP1) and Trevian Asset Management Oy have agreed to establish a joint venture company which invests in the Finnish real estate market.

Första AP-fonden’s return for 2016 was 9.3 per cent after expenses

Första AP-fonden’s net investment income for 2016 as a whole amounted to SEK 27.0 billion (11.3) after expenses.

2016

Första AP-fonden accepts GE’s bid for Arcam

Första AP-fonden (AP1) has decided to accept General Electric’s (GE) bid for Arcam. The bid expires tomorrow Friday 14 October.

Första AP-fonden’s interim report January – June 2016

Första AP-fonden’s net investment income after expenses for January – June 2016 amounted to SEK 10.6 billion. Return after expenses was thus 3.5 per cent.

Första AP-fonden’s 2015 annual report

Första AP-fonden’s net investment income after expenses for 2015 amounted to SEK 11.3 billion. The return was 4,0 percent after expenses, which is in line with the Fund’s target.

2015

AP Funds to co-ordinate carbon footprint reporting

The Swedish AP Funds, the First, Second, Third, Fourth, Sixth and Seventh AP Funds, have agreed to coordinate the way carbon footprints are reported.

Första AP-fonden’s six-month report

New initiatives and targets met by a margin

Strategic partnership to invest in European office properties

First and Second Swedish National Pension Fund, together with TIAA-CREF, create strategic partnership to invest in European office properties

AP1 part of consortium acquiring Fortum Distribution AB

Första AP-fonden har som del av ett konsortium bestående av Borealis Infrastructure, Tredje AP-fonden (AP3), Folksam med dotterbolag och Första AP-fonden (AP1) (”Konsortiet”) idag ingått avtal om att förvärva Fortum Distribution AB, Fortums elöverföringsverksamhet i Sverige.

Första AP-fonden’s annual report: High return benefits the pension system

Första AP-fonden’s net investment income after expenses for the 2014 full year amounted to SEK 36.4 billion. Return after expenses was 14.6 per cent.

2014

Första AP-fonden hires Kaj Martensen

Första AP-fonden (AP1) has hired Kaj Martensen from January 1, 2015.

Första AP-fonden’s semi-annual report

Good return makes valuable contribution to the pension system

Första AP-fonden’s annual report: Continued strong return

Första AP-fondens resultat 2013 uppgick till 25 678 mkr efter kostnader.