Alecta and Other Nordic Investors Seek Diversification over Inflation Concerns

Posted on 08/24/2021

Swedish investor giant Alecta Pensionsförsäkring, ömsesidigt (Alecta) is planning to lower its allocation to public equities and fixed income in favor of investments such as residential housing, infrastructure, and private credit. Alecta is deeply concerned about rising inflation, which is why the investor wants more exposure to real assets. Alecta seeks to increase alternative assets to 20% of the portfolio by 2024 from the current allocation at 12%. Furthermore, Alecta has grown its real assets allocation to 5% over the past few years.

Peer investor Norway Government Pension Fund Global which has more than 70% of its holdings in listed equities is also concerned about inflation.

Varma Mutual Pension Insurance Company’s (Varma) allocation to equities reached 51% in the first half of 2021. During the first half period, equities for Varma returned 18.3%, including a 25.2% gain for private equity and 16.2% return for public stocks.

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