AUSTRIA - A number of Austrian pension funds are looking to broaden their investment universe after the country’s schemes lost 3% on average over the course of 2011.
Austria’s 17 Pensionskassen - which returned more than 6.4% on average in 2010 - failed to recover from a rocky first half of the year, with the Austrian ATX index falling by 35% year on year.
Andreas Zakostelsky, chairman of pension fund association FVPK, said the 3% average loss had been a “very respectable result in a very difficult year”, pointing out that the Pensionskassen all performed very close to the average.
The 10-year average since 2002 came to 2.7%. Since their inception in 1991, Pensionskassen have returned just over 5.5% on an annualised basis.
Out of the €15.5bn in total assets, around 25% was invested in equities (19% unhedged). According to Zakostelsky, Austrian pension funds actively reduced their equity exposure from 34% at year-end 2010.
He added that almost no assets were invested in European sovereign debt outside the core euro-zone, including France, the Netherlands, Austria, Germany and Finland.
To broaden sources of stable income, some funds are now looking at investing in non-commercial public-service projects such as nursing homes and residential bonds, Zakostelsky said.
He said such tangible investments in the domestic market might seem “less scary” to people than Pensionskassen investing in the capital market.
Already last year, Austria’s largest pension fund, VBV, had confirmed to IPE that it was investing in nursing home projects in Germany, with the view to possibly investing in the Austrian market at a later stage.
Zakostelsky said amendments to the Pension Fund Law - to be presented to parliament in the spring - would be beneficial to a “greater or lesser extent” for the country’s pension fund members.
He said he hoped the changes would attract the 80% of Austrian workers who do not yet have an occupational pension contract.