Tomas Östros, industry minister and Sven-Erik Österberg, minister for local government and financial markets are jointly requesting a meeting with the boards of the five main AP funds to discuss the future of the investment guidelines.

Mr Österberg said the meeting would evaluate whether or not current rules are adequate and enable the funds to act as prudent long-term investors. There is no date set for the meeting but it is likely to be after the Swedish general elections on 17 September, he added.

AP fund investments in activist private equity funds managed by Cevian Capital has precipitated the meeting. In the past, Cevian was instrumental in the sale of Skandia as well as forcing resignations at other company boards.

Mr Österberg said the background to the meeting is the way private equity funds, such as Cevian, have acted in the past. “Buying shares and then selling as soon as the price has gone up is not good practice for a long-term investor. In particular, large shareholders such as the AP funds need to have very clear guidelines and code of conduct in ownership questions. At this stage, I cannot say if a ban or further restrictions will be necessary.”

Cevian’s founder, Christer Gardell, has in the past been viewed as somewhat of a hero, defending shareholder rights against the perceived ineptitude of management and boards. However, lately the language used in describing him has become more aggressive and less forgiving with the activities seen more as short-term focused corporate raiding.

Cevian’s latest target is Volvo, the Swedish car maker, which has ruffled some feathers all the way up to government level. Cevian wants the cash-rich company to pay more to shareholders as well as to be broken up into several entities.

AP1’s chief executive, William af Sandeberg, has publicly defended the position and maintains that a holding in Cevian is not contradictory to the fiduciary duties of the pension funds. The investments have so far returned 78 per cent annually. AP2 also has investments with Cevian but not in the fund involved in the Volvo affair.

Österberg said other issues have also been brought to the department’s attention, such as a larger proportion of the AP assets to be invested in Sweden. “We want to have a discussion with the funds and have their input, should any changes to the investment guidelines become necessary.”

PJ

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