AUSTRIA - Multi-employer Pensionskasse APK performed considerably better than the domestic market average last year with a 4.8% return.
APK is among the first of Austria's 19 Pensionskassen to make its as yet unaudited returns public following the announcement last month of an average return of 2% (see IPE article: Austrian funds at 2% 'do better than many funds elsewhere').
"It was not one lucky bet which led to this result but various different factors," Christian Böhm (pictured), chief executive of the €2.3bn APK, told IPE.
He mentioned "sensational outperformance" of the fund's equity portfolio thanks to good currency overlay strategies and benchmarks, positive results from tactical asset allocation, manager alpha and various hedging measures.
"It also helped that our equity portfolio did much better than expected in the first half of 2007, which left us enough money to buy hedging strategies at the right time," Böhm added.
"After that it was thanks to the managers that we outperformed the market despite hedging strategies."
Böhm also said his fund's independence from an insurer or asset manager helps performance as it is able to select best of breed managers.
The majority of the six multi-employer Pensionskassen in Austria were created by banking groups and insurance companies in the 1990s while APK was formed by formerly state-owned industries for pension promises.
"At APK we do not have to use products from our parent company but we are free to choose from a range of products as well as managers," he noted.
According to Böhm, multi-employer Pensionskassen excluding APK returned 1.3% on average last year.
Over the last three and five years, annualised performance excluding APK was 5.4% and 6.1% respectively, while Böhm's fund returned 7.8% and 7.4%.
"This year has been quite challenging so far but we are ready either to jump on the brake if necessary or accelerate should the opportunity arise," he explained.
He said there was no need "to proclaim an absolute crisis" as the non-financial economy has fared rather well and Asia is now less dependent on the US. "Just because the US sneezes it does not follow that the whole world catches a cold."
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