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Nordic roundup: AP6, PFA

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EUROPE – Returns improved at Swedish national buffer fund AP6 last year, with investments producing 9.2% after 2011’s 6.9% loss.

AP6 – which invests exclusively in private equity – said in absolute terms net income was SEK1.7bn (€201m) in 2012, up from a SEK1.4bn loss the year before.

The 2012 profit was the result of continued good returns from investments in mature companies, both directly and indirectly through mutual funds, it said.

Internal costs came in at SEK116m, down from SEK120m.

Over its 10-year history, the fund’s net return was 5.7% a year, AP6 said.

It said this return was an effect of very successful investments in mature companies, on the one hand, and sharply negative returns from investments in companies in the early phase on the other.

However, early phase investments represented an increasingly small proportion of the overall portfolio, AP6 said, as a result of a changed strategy focus since 2011.

Karl Swartling, the fund’s president, said: “[AP6] has continued to put the new strategy into practice by streamlining the portfolio and investing toward more mature companies.”

He said a systematic effort to identify potential partners had led to an increased flow of new investment opportunities.

“Along with a sharp increase in liquidity, as a result of several successful sales, the conditions are being created for a number of new investments in the coming years,” he said.

In other news, Denmark’s largest commercial pension fund PFA saw contributions grow by 21% in 2012 to DKK21.5bn (€2.9bn), while investment returns for with-profit plan holders dipped to 10.5% from 11.1%.

Henrik Heideby, chief executive, said: “We see the 2012 results as quite integrated, with business activity, investment results and capital strength having increased markedly.”

Unit-link pensions returned 12.6%, up from 2011’s loss of 0.8%.

Solvency coverage rose to 210 from 189, while the fund’s total assets grew by 13.9% to DKK369.8bn.

The company attributed its increase in business over the year to high investment returns since 2001, a strong business model and its unit-link product PFA Plus.

Heideby said the increase in business seen during 2012 had continued into early 2013.

As a customer-owned pensions company, DKK30.1bn (97%) of its investment return of more than DKK31bn will be channelled back to customers, he said.

Costs as a percentage of contributions fell to 4% in 2012, from 4.4% the year before.

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