Swedish asset owner's relationship status with fund manager gets complicated
FTN, the Swedish fund selection agency, has removed one of its most popular global equity funds from its platform - a move which has triggered a court battle with the fund management company (Reuters/Marie Mannes
Sometimes the end of a relationship can be pretty messy, and that’s what Fondtorgsnämnden has found during its procurement for active global equity funds.
FTN, the Swedish fund selection agency, has been going through the mammoth process of procuring new funds to its premium pension platform since 2023 and last month it announced the winners of its global equity fund search - with the number of funds falling from 45 to 14.
The catch is that Indecap Fonder’s $3.7bn Guide 2 C fund is not among those 14.
Why is this a problem? Well, the fund was the fourth-most popular in its category on FTN and the third largest fund in terms of assets. It also accounts for 83 per cent of Indecap Fonder’s total assets under management, so this presents something of a challenge for the company as a whole.
Indecap, which obviously has nothing to lose at this point, has decided not to go quietly and is now taking FTN to court over the process.
A spokesperson from Indecap said: “We see a reduction in effective choice for savers, a concentration of capital to fewer and larger, often international, providers, and a reduced emphasis on factors such as long-term returns.”
The asset manager also expressed concern about diminishing Swedish exposure (its Guide 2 C fund has a 48 per cent allocation to Sweden).
It noted that it is owned by the Swedish regional banks that “guarantee stability and a long-term perspective that we believe strengthen the protection of the investors”.
“Capital that has historically been partly invested in Swedish equities or stock markets risks being shifted towards more globally concentrated exposures, often with a significant weighting towards the US market.”
In its response, FTN is contesting all of the investment company’s claims, including that the procurement should be corrected or redone.
“We have carefully reviewed the procurement process and examined the claims put forward by Indecap Fonder. Our assessment remains that the procurement has been carried out in accordance with the applicable rules and regulations. We therefore hope that this matter can be handled swiftly in the best interests of savers,” FTN’s executive director Erik Fransson said.