<p>The shelving of major plans to reform Sweden&rsquo;s pension buffer fund system at the end of 2015 was largely welcomed by the funds themselves, but losing proposed changes to investment restrictions left the four funds unable to get the asset allocation&nbsp;they really need, according to the investment chief of AP2.</p> <p>Hans Fahlin, CIO of the SEK300bn (&euro;31.7bn) Gothenburg-based national pension fund told IPE: &ldquo;We are struggling with our own regulation.&rdquo;</p> <p>In the last few years, the pension fund has been focusing on increasing diversification in its portfolio, and since the financial crisis has been very keen to lower its exposure to developed market equities as the fund&rsquo;s primary source of risk.</p> <p>&ldquo;We have increased our allocation to emerging markets, and we have started investing in China, and alternative assets,&rdquo; Fahlin said. &ldquo;We&rsquo;ve been increasing our exposure to real estate, and have started to invest in forestry and agriculture.&nbsp;</p>