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The guardians of $180B in Swedish pensions are looking at low growth in a negative-rate environment, and many are turning to real estate.
Eva Halvarsson, CEO of the $37B AP2 fund, one of six that comprises Sweden’s AP system, says the government needs to inform Swedes that their retirement accounts need to lower growth expectations in the wake of negative rates, Bloomberg reports. The five largest AP funds returned an average of 5.6% last year.
And as negative rates make growth harder by punishing savers, money managers are often placing their hopes in real estate. Last year the $35B AP1 fund formed a real estate firm and even bought an electricity distributor—in the end it managed to squeeze out a 4% return. [Bloomberg]
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