DENMARK - The Doctors' Pension Fund in Denmark - Lægernes Pensionskasse (LP) - posted a pre-tax return on its investments of 12.9% for 2006, down from the 15.8% return in 2005.
Investments made less money than the year before because of monetary tightening, rising interest rates and waning global growth, the fund said.
Taking the cost of interest-rate hedging into account, the return was 5.8% for the year, down from 16.8% in 2005. Total assets rose to 48.2bn Danish crowns from 45.7bn the year before.
LP pointed out that its quoted equities produced a return of 14.9%, beating the benchmark by 0.3 percentage points.
The investment return for January 2007 was -0.4%, according to the annual report.
In 2006, real estate returned a huge 56.4%, a result the fund put down to "good developments in all the pension fund's property investments." The high proportion of residential properties had a positive impact, it added. Property makes up about 6% of assets.
Noting the enormous rises in residential property prices in Greater Copenhagen and the large Danish towns seen in the last decade, LP said it now wanted to reduce its holdings in this type of asset, and would continue selling residential property in 2007.
"Real estate will continue to form a significant part of the pension fund's investment strategy, but the aim is to transform the property portfolio from one that is now generally purely Danish into an internationally diversified property portfolio," it said in the report.
Investments in foreign property will be made indirectly via property funds, it said.