DENMARK - Danish industry-wide pension fund PKA group has reported that the eight pension funds within the group achieved a 2004 pre-tax return of between 13.6% and 15.0%.
It put the good performance down to its holdings of Danish equities.
“The result compared with the 2003 outturn of 8.5%,” said chief investment officer Michael Nelleman Pedersen. “I think that our performance is in the top five for the sector as a whole.”
The pension funds within the PKA group cater for technologists, nurses, hospital catering workers and other medical sector employees. The highest returns, of 15%, were posted by the pension funds for midwives, social workers and state registered nurses and the lowest, 13.6%, by the pension fund for therapists and physiotherapists.
“Our good performance is due to our weighting of Danish equities,” said Pedersen. “And we had a very effective interest hedge against our liability side.”
“The average portfolio for the eight pension funds managed by PKA is equities 30%, real estate 8-9%, interest hedge 4-5%, index bonds 8-10% and high-yield and emerging market debt 5%. The rest is fixed income,” Pedersen said.
Elsewhere, engineering scheme DIP, Danske civil- og akademiingeniorers Pensionskasse, posted a 2004 return of 9.3% after tax.
Listed Danish equities returned 29.4% - against a 22.9% benchmark. Foreign equities were up 10.8% versus a 3.6% benchmark.
But Danish bonds – 37% of total allocation – missed the target. They rose 7.0% against a 7.45% benchmark. Total assets at DIP have risen to DKK22.6bn (E3bn).
Meanwhile, Lønmodtagerns Dyrtidsfond, LD Pensions, returned 13.7% last year.
LD Pensions is facing change this year. In March 2004, the Danish parliament adopted a new act authorising LD Pensions to manage capital for other pension institutions.
It says it has “launched measures to capitalise on its asset management competencies, and efforts are being made to render investments more liquid”.
It named Jeppe Christiansen as managing director last May.