Denmark’s financial watchdog has responded cautiously to the set of recommendations published this week by the pensions industry for guidelines on how individual firms should value their unlisted assets, saying the move is positive, but it must wait and see how they are actually used.

Carsten Brogaard, deputy director general of the Danish FSA (Finanstilsynet), told IPE: “The Danish Financial Supervisory Authority finds the new guidelines very positive and we hope that increased transparency will mean that the valuations will be calculated in the same way across the sector.”

Asked for the FSA’s response to the initiative, he said: “It is still hard to know what this initiative exactly will bring. We still need to see it used in reality.”

On Wednesday, industry association Insurance & Pension Denmark (IPD) published a recommendation for common guidelines on transparency around the valuation of the unlisted assets, under five headings – frequency of valuation adjustments, materiality and proportionality, consistency, verification, and publication.

The recommendation had been agreed by its pension provider members, the lobby group said.

The outline of the new code has been produced following pressure from the FSA, which has expressed concern about the differences in the ways firms currently put a value on their unlisted or alternative investments.

Brogaard told IPE that valuation was an area of priority for the Danish FSA, because of the significant amount of capital that was currently being placed in alternative investments.

“We will continue to focus on the valuations of alternative investments,” he said.

The FSA said in December that the alternative asset categories it was concentrating on – private equity, credit, infrastructure and real estate – constituted about a fifth of Danish pension providers’ total investment assets at the end of 2019.

Looking for IPE’s latest magazine? Read the digital edition here.