AUSTRIA - Equity quotas for Austrian Pensionskassen have returned to around 30% from a 25% dip in 2008, and they are set to remain at that level for years to come, according to the Austrian Association of Pensionskassen (FVPK).

Andreas Zakostelsky, head of the FVPK, told IPE that Austrian Pensionskassen had reduced their equity holdings very early in 2008 from the 40% level in 2007.

He added that a 30% equity exposure “did not mean 30% equity risk”, as risk management and overlay structures to hedge parts of these positions were “gaining importance”.

“Also, management boards are taking risk management more seriously - they realised it is not enough to get a risk report once a year,” he said.

“More money will be invested in technical equipment for risk management.”

He said he could also see computer-controlled trend-following models come more into use for managing changes in the overlay structure.

Zakostelsky said it was “very difficult” to generalise about current trends - especially in the Austrian second-pillar pension system, in which many larger funds have 30 different portfolios with different risk and investment profiles, depending on member structure.

However, he said he was convinced investments into emerging markets outside Europe were increasingly on the radar of all Austrian Pensionskassen.

“Investments will mainly focus on China, India and the ‘Asian Tigers’ - and exposure to these markets will be in the low two-digit area,” he said.

He said interest in alternatives would remain low, however, given the very conservative risk profile of Austrian Pensionskassen.

Exposure to alternatives, including real estate, has been on average below 3%.
Zakostelsky, who also heads the Valida Group to which the Valida Pensionskasse (formerly ÖPAG) belongs, took over as head of the FVPK from Christian Böhm this spring.