IPE Nordic Briefing: ATP posts 6.7% interim return

There must have been a sigh of relief at ATP when the Danish statutory pensions giant was able to report a 6.7% first-half gain on its return-seeking investment portfolio.  

The result was a far cry from the eye-watering losses in 2022 on the scheme’s bonus potential. Even though CEO Martin Præstegaard dismissed that year’s dire financial market conditions as a black swan event, the losses skewed the portfolio towards unlisted assets, making it harder for ATP’s geared portfolio to benefit proportionally from subsequent rallies in listed equities.  

But finally, the DKK700bn (€93.7bn) institution said it has managed to bring the balance between liquid and illiquid risk closer to its objective.

For all its insistence that the Government Pension Fund Global (GPFG) is not a foreign policy tool, Norway has drawn the ire of US president Donald Trump’s circle for its sovereign wealth fund’s divestment of US blue chip Caterpillar, due to business activity supporting the Israeli occupation of the West Bank and Gaza.

A US State Department spokesperson said the Trump administration was “very troubled by the Norwegian sovereign wealth fund’s decision”, while one Trump ally, senator Lindsey Graham, suggested Washington should impose tariffs and visa revocations in retaliation, according to Reuters.

Sweden’s big-four national pensions buffer funds – months away from a major systemic shake up – revealed their investment results for the first half, with AP4 leading the pack with a 2.2% return. The Stockholm-based fund, along with its peer AP3, is set to swallow AP1’s assets at the end of this year when the latter is liquidated in line with the buffer fund reform passed by parliament on 20 May.

AP1, meanwhile, reported tactics its investment team took between January and June to protect its near SEK500bn (€45.4bn) of assets, and maximise returns in harsh market conditions. These included boosting currency hedging in the face of Swedish krona strengthening, and reducing exposure to North American equities in favour of European shares. 

Items to note:

• Former Danish prime minister Lars Løkke Rasmussen, chair of the Moderate Party he founded, has called for the pension system to be overhauled. “Fundamentally, we think we should peel it all away so that we can clean up a very complicated system,” he told financial daily Børsen at the end of August. Specifically, his proposal means abolishing the Arne early-retirement pension as well as the senior pension.
• IPE Iceland, a one-day forum event for pension funds, investment decision makers, asset managers and others, is taking place at Reykjavik’s Harpa Concert Hall and Conference Centre, on 8 October.

Rachel Fixsen

Nordic Correspondent