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Investment timing was key to Ilmarinen's 16% return

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FINLAND - Ilmarinen pension insurance company has attributed a positive return of 15.8% in 2009 to the allocation and the timing of its investment strategy.

Preliminary figures released by the pension company today stated the end of year result was helped by a 2.4% return on investments in the final quarter, which in turn increased the value of assets from €25.1bn at the end of September to €26bn.

Ilmarinen claimed the return of 15.8% nominal return - 16.5% on an inflation-adjusted basis - is the best ever investment return in real terms for the company, and was driven by strong performances from fixed income and equity investments.

Over 40% of the equity allocation was invested in Finnish stocks, while 31% was allocated to European equities and the remainder invested across the US, Japan and emerging markets.

Timo Ritakallio, deputy chief executive and head of investments at Ilmarinen, said: "We were able to use the economic cycles to our advantage. Due to our high solvency, we did not need to sell any shares in panic. Naturally, the good investment result also included a significant recovery of certain asset values following the distressed market conditions in 2008."

The financial statement showed capital investment funds and real estate investment funds produced the lowest returns, however Ritakallio claimed that the risk level of the portfolio should not be excessively restricted in order to reach the target long-term investment returns.

"This excellent result is due to Ilmarinen's long-term, equity-weighted investment policy, the rewards of which we can now reap," he said.

Other highlights published ahead of the full results next month showed the solvency capital ratio of the fund improved from 14% at the end of 2008 to 24% of technical provisions at the end of 2009. This is equivalent to 2.7 times the solvency limit, although officials noted even if the temporary relief insolvency legislation was excluded the capita ratio would still be 19.1% and a solvency position of 2.1 times the limit.

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email nyree.stewart@ipe.com

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  • QN-2546

    Asset class: Real Estate Equity Fund (non listed).
    Asset region: Europe.
    Size: Total CHF 600m, approx. CHF 100-300m per fund investment.
    Closing date: 2019-06-28.

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