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Denmark’s ATP in €1bn hedging loss

DENMARK - The DKK371.5bn (€50bn) Danish supplementary pension scheme ATP has unveiled a loss of more than €1bn after tax on its hedging portfolio.

Releasing its nine-month results, ATP said today: "When viewed in isolation, rising interest rates caused the ATP Group to suffer a loss on the hedging portfolio of DKK8.2bn [€1.1bn] after tax."

Nonetheless, ATP spokesman Thomas Knudsen says the loss needs to be put into perspective: "The loss was offset by a DKK14.4bn fall in pension liabilities, hence the hedging activity results for the first nine months overall totalled DKK4.2bn."

Also the fund made a profit of DKK11.8bn during the first three quarters of 2006, which is "almost in line with the full-year result for 2005", according to ATP chief executive Lars Rohde.

The profit represents "a 22.5% increase in the reserves compared to year-end 2005," helping boost its reserves to DKK63.8bn, ATP said.

The total DKK6.3bn return on real estate, private equities and listed domestic equities was pivotal to the good market return before tax (DKK17.3bn, or 4.8%) of its investment portfolio, the fund said.

Meanwhile, the €7.3bn Danish pension fund PensionDanmark announced it is building 97 new apartments in Frederiksberg.

The new development called Revyhaven, will be a mixture of industrial and commercial buildings and is planned to be ready by the end of 2007.

In June the fund told IPE that by 2008 it will invest DKK800m (€107.3m) in building four different types of accommodation: the one in Frederiksberg, two in Ørestad as well a project started in June in Måløv. All together they will account 400 flats totalling 44,000 sq metres.

The building work is part of PensionDanmark's property investment programme, which posted a return of 18.9% in 2005.

The fund regards property investments as yielding high returns, and hence beneficial to the scheme's members, according to acting manager Torben Möger Pedersen; additionally, members are given first refusal on the properties.

Currently, real estate accounts for 6% of PensionDanmark's portfolio.

In June Poul Hedegaard, the fund's director of real state, told IPE in an interview: "We started from zero three years ago and are building up a new portfolio," adding: "Our target is 8% and we are growing very fast. Our total balance will be doubled by 2010."

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