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Credit investors target Sweden as they wait for a correction

A group of investors is preparing for a correction in Sweden’s credit market, based on an assumption that a lot of real estate bonds are much riskier than they seem.

Skandia | Photo: CHRISTENSEN SØREN/ERH

Carl Johan Lagercrantz, a portfolio manager at Strand Kapitalforvaltning AB in Stockholm, says he’s about to open a new Nordic bond fund that will target junk and high-grade bonds in a market that’s now dominated by real estate issuance.

The concern among money managers is that central bank purchases, and insatiable investor demand for anything that looks green, have unjustifiably driven down returns on some of Sweden’s riskiest corporate bonds.

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