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Nordic roundup: VER, Keva, Etera

FINLAND - Finland’s State Pension Fund (VER) reported a 4.8% return on investment for the first half of 2012, bouncing back from the 2.3% loss suffered in the full 2011 year.

The market value of VER’s investments was €14.4bn at the end of June, up from €13.7bn at the end of December 2011.

Managing director Timo Löyttyniemi said: “Our return on investment was good at the beginning of the year - this positive development has continued throughout the summer.”
Fixed-income investments returned 4.1% in the first half, equities produced 6.4%, and ‘other’ investments ended the period with a 1.7% return.

The change in asset values meant VER’s proportion of fixed income investments dipped to 54.3% at the end of June from 56.6% at the end of December, while equities expanded to 38.6% from 36.4% and ‘other’ investments rose to 7.2% from 6.9%.

Total returns on pension fund contributions during the first half of the year amounted to €829m, €15m more than in the same period a year earlier.

A total of €821m of VER assets had been transferred to the state budget by the end of June, it said.

Meanwhile, local government pensions organisation Keva posted a 6% return on investments in the first half of 2012, bringing the market value of its investments to €31.8bn at the end of the period.

The return on fixed income investments was 5.4%, while listed equities returned 7.6%.

Property produced 2.4%, private equity gave a 7% profit, hedge funds returned 3.7% and commodities ended the period with a loss of 3.3%.

Merja Ailus, chief executive and managing director of Keva, said investment activities had generated even excellent returns, particularly considering the continued restlessness in the capital markets and the strong market fluctuations.

Ailus said: “In times like these, however, it is of primary importance to continue to ensure investment risks are managed appropriately.”

Contribution income totalled €2.5bn, and local government pensions paid out totalled €1.9bn.

In other results news from Finland, pension insurance company Etera said investments returned 5.9% in the January-to-June period, up from the 0.5% return posted for the first half of 2011.

Fixed income investments produced an overall return of 5.2%, equity investments returned 8.8% and real estate produced 2.7%.

In the second quarter of 2012 alone, Etera said its investments made a 1.5% return despite a sharp fall in share prices during the period.

Jari Puhakka, director of investments, said: “We reduced our share weight to 6% at the start of April, and raised it to 15% at the start of June.”

The timing and securities choices were right on target, he said, adding that this allowed the company to post a positive result.

The market value of the investments at the end of June stood at €5.6bn, up from €5.5bn in the same period in the previous year.

Premium income in the first half was up 8.4% from the first half of last year at €299m.

Managing director Hannu Tarkkonen said: “We had a good outcome in the insurance transfers, and sales of new insurance policies continued to be excellent.”

In addition to this, the payroll in Etera’s key sectors grew during the reporting period, he said.

The total result for the company for January to June was €232m, up from a €64m loss reported in the same period the year before.

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  • Nordic roundup: VER, Keva, Etera

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