That makes it the second Swedish pension company to embrace this high-risk area of the credit market. nrpn has previously reported that Skandia Liv has begun investing in US senior bank debt and is planning to increase its so far limited exposure of 0.7 per cent of assets as soon as it finds good managers.

Gustav Kärner, chief financial officer of Länsförsäkringar, said that almost all parts of the credit market were currently attractive.

“We’ve chosen the managers for our investments in senior bank debt and are in the process of finalising all the pieces. We are also investing in investment grade and looking at high yield,” he said.

Mr Kärner said that he had been surprised by Skandia’s move into senior bank debt and that he so far was not aware of any other Swedish investor taking on the investment.

“We actually looked at senior bank debt before the crisis and I guess you can say that we were quite pleased that we didn’t go in at that time. It’s a lot more interesting now, but of course riskier. It’s extremely important to have good managers for this kind of investment,” he said.

Hans Sterte, chief investment officer of Skandia Liv, which plans to increase its senior bank debt investments to 2 per cent of assets, also admitted that, while it may prove a risky investment if the credit crisis were to worsen, he was still confident that its “awfully good returns” made a good investment case.

Länsförsäkringar posted returns of -1.7 per cent for the first quarter in 2009. The company made a remarkable comeback during the last three months of 2008 and ended the year with returns at just above zero.

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