FINLAND - Varma's growth slowed in the first half of the year, despite strong returns from private and unlisted equity, as well as hedge funds.

Figures released today by the mutual insurance company show only a marginal increase in overall assets to €30.9bn at the end of June, up by less than 1% from the first quarter. At the end of March, Varma managed €30.8bn in assets.

The company's president and CEO Matti Vuoria explained that Finnish companies remained cautious about further investments and that the country's economy would likely face a slower recovery than many European neighbours.

However, Risto Murto, senior vice president of investments praised returns of 3% since the end of 2009, saying: "Despite the instability in the markets caused by the European sovereign debt crisis, the yield on Varma's investment portfolio was stable in the first half of 2010.

"Diversification brought good results in the first half of the year, which could be seen, in particular, in the form of high returns on hedge fund investments and private equity investment," Murto added.

Hedge funds returned 8.4%, with unlisted equities and private equity investments performing even stronger with 9.4% and 11.1% respectively. However, the latter two assets only represent 7% of overall assets.

At the end of June, fixed income represented the largest share of Varma's assets with 37%, a 7 percentage point reduction over the end of December. Listed equities increased by 4 percentage points to 27%, while hedge fund and real estate investments both totalled 14%.

The remaining 1% was invested in the commodities market. 

The insurer, who also highlighted that its solvency level had increased by €500m to €6.5bn, has in the last six months taken on pensions provisions from several organisations, including healthcare provider PlusTerveys and trading sector services provider Kesko