Danica harvests 15% YTD return from direct investment strategy
Danske Bank subsidiary Danica Pension said business made good headway in the first nine months of this year, while investments in its new strategy of investment directly in companies generated more than 15% in returns in the period.
Per Klitgård, Danica’s group chief executive, said: “We are presenting a satisfactory performance for the first nine months – despite the financial market turmoil experienced during the period.”
Reporting interim financial figures, Danica Pension, Denmark’s second-biggest commercial pension provider after PFA, said it registered a 12% increase in its total premiums in the nine-month period compared with the same period last year.
Danica said that, year to date, it had invested almost DKK2bn (€269m) directly in Nordic companies in the direct-investment strategy it first announced in the summer of 2014.
On top of this, it made further investment commitments to several private equity funds.
“Direct investments yielded returns in excess of 15% for the first nine months,” it reported.
Alternative investments such as these directly held assets, excluding properties, now account for 14% of the total portfolio underlying unit-linked products, Danica said.
Including real estate, that percentage is 21%.
Klitgård said Danica had taken a very dedicated approach to alternative investments and that he was pleased to see the strong performance of this sector.
“It is a difficult market that requires a wide range of very specific competencies, which we possess at Danica Pension,” he said.
Klitgård said the subsidiary’s continuing improvements in its product and the new online services it was devising had contributed to the increased premiums.
In Denmark, total premiums for January to September were up by 15% year on year at DKK16.6bn, while total premiums for the Danica Group amounted to DKK24.6bn for the nine-month period, 12% higher year on year.
Pre-tax profit was little changed from the previous year at DKK1.46bn, down from the DKK1.49bn profit in the corresponding period in 2015.
Danica’s total assets grew to DKK436bn by the end of September from DKK355bn at the end of December 2015.