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AP Pension sees 16.3% returns boosted by hedging

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  • AP Pension sees 16.3% returns boosted by hedging

DENMARK - Mutual pensions provider AP Pension posted a 16.3% return on investments last year and saw its own business volume grow at the same rate.

Managing Director Søren Dal Thomsen said of the returns: "The world economy was not in good shape in 2011, but despite this, AP Pension managed fine.

"We gained 6,000 news customers and made particularly good profits on bonds and property," he said.

Apart from gains in these asset classes, interest rate hedging also explained part of the 16.3% investment return, the company said.

Reserves increased to 10.7% from 7.0%, as a proportion of liabilities, AP Pension said in a statement reporting some key figures from its forthcoming 2011 results.

"It is reassuring that our reserves are large enough for us to have something to protect us. Because of this, it is likely that we will be able to maintain the market's highest account dividend of 4.7%," Dal Thomsen said.

The company has kept its account dividend at 4.7% since 2009. Dal Thomsen said last year that this was possible thanks to projected returns of over 10%.

These investment return and reserves figures relate to AP Pension's traditional with-profits pension product, with its unit-link pensions, however, posting lower returns.

Its life-cycle product ended the year with a return of 3.2% for customers with five years to retirement, -0.2% for those with 15 years to retirement, and -3.1% for savers with 30 years to go.

Gross contributions had increased to DKK5.7bn (€767m) in 2011, AP Pension said, up from at DKK5.3bn for 2010.

AP Pension had around DKK50bn in assets under management at the end of 2010, but has yet to report the 2011 figure.

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