Stockholm (NordSIP) – On 4 November 2024, the Swedish Fund Selection Agency (FTN) announced the procurement of actively managed global equity funds focusing on large and mid-cap companies in developed markets. The procurement covers more than SEK 200 billion and affects approximately one million savers and will report under Article 8 of the EU’s Sustainable Finance Disclosures Regulations (SFDR).
The deadline for submitting tenders in the procurement is 16 December 2024 via the e-Avrop procurement platform. Fund Managers have the opportunity to ask questions about the procurement via e-Avrop until 6 December and FTN will answer questions on an ongoing basis until 10 December 2024. Participation in the procurement requires the payment of a tender fee, which must be paid at the latest when the tender is submitted.
SEK200 million in Global Equities
FTN’s announcement informs that the procurement covers all global equity funds, including those with a geographical weight to the Swedish market. Currently, 45 actively managed global equity funds are on the premium pension fund platform, mainly in two fund categories; Global and Global & Sweden. Moreover, the procurement covers over SEK 200 billion in pension capital and affects approximately 1 million pension savers, as of 30 September 2024. FTN advises that there is no guarantee that the procured volume will match the current volume or number of savers.
“The procurement of global equities is our largest to date and global equity funds are an important component of many people’s long-term savings. We know that we have a process that works and I hope that all fund managers with competitive funds will submit tenders thereby creating the conditions for safer and higher pensions for Sweden’s pension savers,” says Erik Fransson, executive director of FTN.
New Article 8 Funds – Article 9 Funds Soon?
The procurement details published on November 4th clarify a preliminary announcement from September 26th, by specifying that FTN is seeking to “promote sustainability”, reporting under SFDR Article 8 during this procurement phase. According to FTN, “plans to procure Article 9 funds will be addressed at a later stage.” Further information can be found in the procurement documentation.
FTN’s announcement suggests that these new funds will replace existing one. “The fund agreements for the affiliated funds impacted by the procurement will be cancelled. However, these funds will remain available for trading on the fund platform until the procurement process is finalized and new fund agreements are awarded,” FTN notes.
To be evaluated by FTN, the fund and the fund manager must meet the requirements outlined in the procurement, as well as the criteria for signing a fund agreement with FTN. Additionally, all submitted tenders must contain complete and accurate information. All tenderers will be treated equally, and no information regarding the procurement will be shared with individual tenderers. Further information can be found in the procurement documentation.
Other Recent FTN Procurement Processes
FTN has another two open tenders on the e-Avrop procurement platform: one for the “Procurement Passive management of Swedish equity funds, large and mid-cap companies” and another for the “Procurement Active management of Swedish equity funds, large and mid-cap companies” due on November 14th. The two procurements cover more than SEK 155 billion. Prior to a late October update, these procurements had already been postponed once from their original deadline of October 31st.
At the end of October, FTN announced the winners of the procurement processes for passive European and Global equity funds. The Handelsbanken Europa Index Criteria, Skandia Europa Exponering, Storebrand Europa and Swedbank Robur Access Europa index funds split “just over SEK 16 billion of premium pension savers’ funds” among themselves. The Fund Selection Agency noted that “the average fee for the funds in the category is reduced from 0.135% to 0.046%.”
Handelsbanken Developed Markets Index Criteria, Handelsbanken Global Index Criteria, Mercer Passive Sustainable Global Equity UCITS CCF, Skandia Global Exponering, Storebrand Global Indeks and Swedbank Robur Access Global were awarded SEK 51 billion in mandates by FTN. The Fund Selection agency noted that “the average fee for the funds in the category is reduced from 0.143% to 0.046%.”
“The Swedish Fund Selection Agency has now completed a total of three procurements, including the two recent awards, marking a significant step toward a fully procured fund platform”, Chairman of The Swedish Fund Selection Agency Mats Dillén said on that occasion. “Global index funds are an important foundation for many long-term pension savers and we welcome the outcome of the procurement that lowers the fees for all savers in the category. Premium pension savers will now have access to high-quality index funds at fees normally only available to large professional investors”, Fransson added on that occasion.
No information was immediately available to non-subscribers of the e-Avrop platform regarding the level of reporting associated with these procurements under the EU’s SFDR.
