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Swedbank exits from Lithuanian third-pillar provision

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INVL Asset Management is taking over the management of Swedbank Investicijų Valdymas’s only Lithuanian third-pillar pension fund.

According to INVL Asset Management’s website, the transaction has been cleared by the Bank of Lithuania, the pension sector’s regulator, and is expected to be completed in three months’ time.

Swedbank acquired the since-renamed Swedbank Supplementary Pension Fund from Danske Bank last year, along with the Danish bank’s three second-pillar funds.

It sold the supplementary fund business to concentrate on the second pillar, where it is currently the market leader. Swedbank accounts for more than 40% of the system’s 1.27m members and 37% of the total net assets of €2.7bn as of end-June.

INVL provides asset management and pension services to Lithuanian and Latvian clients. It entered the Lithuanian pension fund management market in 2014 when it acquired the funds previously run by MP Pension Funds Baltic. It also bought funds run by Finasta, which have since been merged and rebranded.

It currently manages four second-pillar funds with €278.8m of assets and four third-pillar funds with €18.4m assets at the end of June.

Earlier this month two of its second-pillar funds, the high-equity INVL Extremo II 16+ and the medium-equity INVL Medio II 47+, acquired 10% of the Lithuanian SME Fund, making INVL Asset Management its second biggest investor after the European Investment Fund (EIF). It also acquired 4.9% of BaltCap Latvia Venture Capital Fund.

Both fund acquisitions were established by the private equity and venture capital firm BaltCap as part of the European Commission and EIF’s Joint European Resources for Micro to Medium Enterprises (JEREMIE) initiative.

On INVL Asset Management’s website, CIO Vaidotas Rūkas explained: “Our strategy is to steadily increase our pension funds’ investments in Lithuania and the other Baltic states, thereby contributing to these countries’ economic growth and seeking to earn an attractive return for the clients of the pension funds.”

High-equity funds top performance charts

Lithuanian pension fund results, the higher-risk vehicles have continued to generate the best returns.

As of the end of June, according to the Bank of Lithuania, the highest average year-to-date return came from the high-equity funds (3.27%).

Medium-equity funds gained an average 1.78%, low-equity funds gained 0.55%, and conservative funds lost 0.49% on average.

In the case of third-pillar funds, equity vehicles returned 3.4%, followed by bond funds (1.29%) and mixed investment (1.25%).

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