Hans Sterte, CIO of Länsförsäkringar, told nrpn that the fund was also considering investing in international property funds. “We are in the middle of a process of gradually increasing our holdings to alternative assets.

“Our goal is to have approximately 20 per cent of our portfolio invested in alternatives such as private equity, infrastructure and foreign property funds over the coming four years, compared to the 7 per cent we have now,” he said.

At present Länsförsäkringar’s portfolio consists of equities (44 per cent), fixed income (42 per cent), property (7 per cent) and alternatives (7 per cent). The firm’s alternatives portfolio is made of private equity, infrastructure, forestry and international property funds.

“In the future we may also consider various types of commodities, as these could be a good way to increase the diversification of the portfolio,” said Mr Sterte, who added that the expanded alternatives portfolio is unlikely to include hedge funds. “We had a portfolio of hedge funds, which we decided to sell in early 2005.”

He continued: “The reason for this was their performance, after fees had been deducted, was not good enough. On a risk adjusted basis we think that we will add more value to the total portfolio by developing our expertise in private equity, property and infrastructure investments rather than building up a portfolio of hedge funds.”

We are also interested in international property funds, “because an increased exposure to property will improve the risk return characteristics of our portfolio.” At present Länsförsäkringar holds approximately 12 per cent of the Swedish life and pension insurance market.

RC

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