The Third Swedish National Pension Fund (AP3) has partnered with global alternatives manager Wafra to form Covalent, a new $1.05 billion investment platform focused on private equity co-investment.
The amount of capital AP3 was putting to work on the platform was not disclosed, but the partnership seeks to harness the networks, capabilities, and experience of a small number of larger global asset owners, the announcement said.
“For AP3 this is a way to accomplish cost efficient, sustainable asset management as we strive to be a world class investor,” said Henrik Nordlander, head of private equity at the SEK 491.5 billion ($46.5 billion) pension fund. “Covalent is further evidence that strategic partnerships among asset owners can support our commitment to generating superior net returns for our beneficiaries.”
AP3 has also participated in the Capital Constellation program launched by Wafra in 2018. That platform attracted investors such as CPP Investments, Alaska Permanent Fund, the Public Institution for Social Security of Kuwait (PIFSS), Railpen and New York State Common Retirement Fund in providing growth capital to private alternative asset firms.
The Covalent program will focus on mid-market buyouts and growth equity investments primarily in North America and Europe. Investments will be led by the Wafra investment team and the co-investments will be alongside the 27 asset managers with whom Wafra, which has $30 billion in assets under management, has already formed strategic relationships.
Steve Moseley, managing director at Wafra added, “By deploying flexible, patient capital and collaborating with highly skilled investment sponsors, we expect to continue to construct high quality portfolios of carefully selected private equity investments in targeted sectors alongside top tier investment firms.”