The Second Swedish National Pension Fund (AP2) generated a return of 4.6 per cent and a profit of SEK 20.9bn in 2025, amidst a year of significant changes, including a new management model and reforms of the AP funds.

According to AP2’s annual results, the fund capital at year-end amounted to SEK 475bn, while currency effects had a negative impact on the total return by -3.5 percentage points.

Meanwhile, the underlying return after expenses, excluding currency effects, was 8.1 per cent.

The fund explained that the largest contribution to returns has come from emerging market equities (28 per cent), developed market equities (14.9 per cent) and venture capital (7.9 per cent), while real assets saw a weaker performance (-4.5 per cent).

During the year, the fund also implemented two major changes – a new management model and the implementation of the Swedish parliament’s (Riksdag) decision to reform the AP Funds and incorporate the Sixth AP Fund (AP6) into AP2.

AP2’s annual report showed that AP6 and its employees generated a positive return for the Swedish pension system and will end with an outgoing fund capital of SEK 83.5bn.

AP6’s total result for 2025 of SEK 6.4bn corresponds to a return of 8.3 per cent, and its sale of the holding in Asker, which was listed in the autumn, contributed SEK 2.5bn to earnings.

AP6's operations ceased at the end of the year when AP2 took over responsibility for the fund's assets and liabilities, and its assets have been divided into a transport and a transition portfolio.

Approximately one-third of AP6's assets belong to the transport portfolio and will be transferred to AP2's venture capital portfolio in 2026.

The remaining assets will be managed separately in a transition portfolio until the respective settlement date, when the proceeds will be transferred to AP2's portfolio. The fund explained that this is the most cost-effective way to implement the change.

Since AP6's portfolio is mature in its profile, approximately half of the transition portfolio is expected to reach its settlement date within two years.

The fund estimated that, starting in 2027, the savings could amount to SEK 80-100m annually.

Last year also saw AP2’s strategic allocation to venture capital in its portfolio increase from 10 to 15 per cent.

AP2 will also welcome around 10 new employees in 2026 in management, business support, risk, legal and sustainability as part of managing and handling the increased capital.

In addition to the reform of the AP funds, AP2 has undergone a major review of its strategy since 2024 to increase returns.

To achieve this, the fund changed its management model, and the new strategy includes changes at many different levels, including clearer mandates, decision-making structures and processes.

This “major overhaul” also saw the fund strengthen with improved capacity to act in different time horizons and review strategies in several asset classes. This has entailed, for example, updates to its proprietary indices and a new fund structure with fewer and broader mandates within the fixed income portfolio.

The new strategy is designed to provide the fund with better opportunities to act in a changing world and generate returns based on different time horizons.

Commenting on the results, AP2 CEO, Eva Halvarsson, said: “AP2 delivers a profit of SEK 20.9bn after a year in which we have navigated an uncertain world while working on internal change management.

"I would like to thank all employees at AP2 and AP6 who have implemented the decision to change the buffer funds at an exemplary pace at a high pace.”

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