AUSTRIA – VBV, Austria’s biggest multi-employer pension fund with €4bn in assets, has reported a return of 9.2% for 2005 – above the 7.7% for 2004 but below the 11% average for other schemes, known as Pensionskassen.
In its report for 2005, VBV said that while all its investments had a decent performance – between 5.8% and 12% – in 2005, its average return for the year was boosted primarily by its equity exposure.
VBV allocates 30% of its assets to equities and another 60%-65% to fixed income, including government debt and Pfandbriefe (covered bonds). The remaining portion (5%-10%) is allocated to alternatives, including real estate and hedge funds, as well as cash.
“Our US dollar-denominated investments also were adequately protected against currency risks last years to avoid short-term fluctuations in our portfolio,” the fund said.
VBV also said the number of its insured employees totalled 117,329 at the end of 2005, up 2.7% from the previous year. From these members, it took in €187m in contributions. The fund also had 15,227 pensioners to whom it paid out €101m.
VBV, which has one third of the €11.5bn Pensionskassen market, emerged in August 2004 from the merger of VPK, a multi-employer scheme and BVP, a pension fund for Austria’s insurance and banking sectors.
Turning to the outlook for 2006, VBV said in the report that it would focus more on risk management, adding that another asset-liability study would be conducted.
“The double-digit growth in the number of insured for Austrian Pensionskassen will also continue in the near future and this has partly to do with the changes to the state pension,” the fund added.
VBV did not disclose its expected return for 2006, but Christian Böhm, head of the Austrian Pensionskassen association (FVPK) said last week he expected the funds to achieve between 3% and 6%.
VBV has also recently said it was considering investing in currency and private equity, adding that it would make a decision regarding the former by the end of 2006.