Sweden’s $14 Billion AP7 Fund to Triple Clean-Tech Investment

By Adam Ewing and Niklas Magnusson

Feb. 10 (Bloomberg) -- AP7, a Swedish state pension fund that manages about 100 billion kronor ($14 billion), plans to triple its investment in renewable energy as more people switch to cleaner technologies.

The investment in renewable-energy companies is expected to swell to about 3 billion kronor over the next two years from 1 billion kronor today, AP7 Chief Executive Officer Peter Norman said in an interview at the fund’s headquarters in Stockholm.

“It’s not because we have Mother Teresa economists, but because we think it’s going to be good value,” Norman said. “We think the world will change its resistance to using renewable energy and if you’re in at an early stage, in a lot of companies in the sector, you’ll have a nice performance over time.”

Nearly 1 billion kronor has already been invested in about 50 clean-technology companies such as Vestas Wind Systems A/S, the world’s biggest maker of wind turbines, Spanish rival Gamesa Corporacion Tecnologica SA, and Norway’s Renewable Energy Corp. ASA, a maker of solar-energy components, according to Norman.

Norman said he expects the fund’s returns to surpass gains in the broader equity market by about 5 percent, without specifying which markets he was referring to. The FTSE ET50 Index, a measure of the largest 50 companies globally that focus on environmental technologies, has risen 19 percent in the past 12 months, compared with a 23 percent advance for Europe’s Dow Jones Stoxx 600 Index.

Norman has been the CEO of AP7 since 2000. In November 2008, he was appointed chairman of D. Carnegie & Co. AB after the Swedish investment bank was taken over by the country’s government following the revocation of its banking license by the financial regulator. The Swedish National Debt Office, which took over ownership of the bank, and Norman shrank Carnegie’s balance sheet and sold the company after three months.

To contact the reporters on this story: Adam Ewing in Stockholm at aewing5@bloomberg.net; Niklas Magnusson in Stockholm at nmagnusson1@bloomberg.net.