DENMARK - The Danish pension fund for doctors, Lægernes Pensionskasse, made a 5.7% return on investments before tax last year, as the ‘less liquid' assets drove the return.

In 2007, the pension fund's investments returned 12.9% but taking into account hedging activities, the overall profit was 1.1% before tax, compared to 5.8% for 2006, it said.

"The pension fund's return on investments in 2007 was positively affected by high returns on the illiquid assets, in particular including property, commodities and private equity," the fund said in its annual results statement.

"On the other hand, the return for quoted assets was considerably more modest," it added.

Lægernes Pensionskasse's return on private equity was 30%, as officials point out in the annual report: "The investment horizon for these funds is typically 10 to 12 years. The investments in this asset class commenced in 2000, so therefore some funds have begun to sell off businesses within the portfolio, and realised significant profits in the process."

Property returned 15%, the fund said, and commodities - which it only started  investing in in March 2007 - gave a return of 36%, thanks to rising oil prices, industrial metals and agricultural commodities, it said.

At the end of 2007, the pension fund said it had 23% of investments in "illiquid assets", a 33% allocation to quoted equities and a 44% to quoted bonds.

The return on quoted investment assets was 2.1% - 0.3 percentage points below the strategic benchmark return, it said, adding the lower return was because of a high proportion of index-linked bonds, which had produced a negative return through changed tax conditions.

Within this category, quoted equities gave a 4.4% return, which was 0.2% above benchmark, and bonds ended the year with a loss of 1.4%, undercutting the benchmark by 1.9 percentage points, the fund said.

Assets under management rose to DKK63.16bn (€8.46bn) at the end of 2007, from DKK55.21bn the year before.