SWEDEN - ATP Group, which manages Denmark's giant labour market supplementary fund, is the next in line to be hit by losses on equities during the first quarter of 2008.

In its first quarter results, ATP showed the group generated a negative return of DKK2.2bn (€295m), with total assets now at DKK349.3bn.

The market return on the ATP investment portfolio - comprising of a separate DKK342.5bn beta and an alpha compartment - was a negative DKK 1bn, equivalent to a negative rate of return of 0.3%, ATP announced today.

The ATP fund lost DKK2.4bn, while the SP scheme lost DKK2.25bn because of negative investment returns.

That said, it could have been worse had it not been for certain strategies, according to the fund officials.

"The reason why ATP was, after all, able to contain the loss at DKK 2.2bn - in the face of adverse equity-market conditions - was that a number of investment decisions paid off - not least the decision to hedge the equity portfolio by purchasing financial instruments," stated the Q1 results report.

Moreover, investments in oil-related securities and long-dated bonds returned a profit, added the fund.

ATP has a hedging portfolio comprised primarily of interest-rate swaps, to ensure optimal hedging of ATP's pension liabilities, next to an investment portfolio, which should generate an absolute return that is sufficient to ensure growth in the bonus potential.

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