EUROPE - The Danish Labour Market Supplementary Pension ATP has made its first foray into the UK market by opening an office in London.

The office is located in Dover Street and led by Morten Nilsson, head of international operations.

ATP said the office would play a vital role in its strategy to exploit its expertise and business model on the international scene.

Lars Rohde, chief executive at ATP, said: "There is a need for a new paradigm for pension funds in this current lower-return, mark-to-market environment."

He added that pension funds needed an investment and governance framework, a full understanding of their liabilities, aggressive diversification and clear risk tolerance to deal with these issues.

"Our risk tolerance is very low, as we have no sponsor and have to be fully funded at all times," he added.

"We are not doing asset allocation - we are doing risk allocation to try to avoid uncompensated risk.

"One of the challenges of the near future is that we do not know whether we will enter a Japanese scenario or governments all around the world will inflate themselves."

The DKK420bn (€56.4bn) fund is Denmark's largest and the fifth largest in Europe, with more than 4.6m members.

It operates as a hybrid system - a minimal lifelong pension with conditional indexation.

ATP won the Best Pension Fund in Europe award - and another six awards in other categories - at IPE's European Pension Funds Awards gala in November 2009.