Finnish pensions insurer Elo posted a slim 0.8% investment return in the first half, with unlisted assets producing the highest returns in its portfolio.

Elo’s assets rose in value to €23.4bn by the end of June, compared to €22.6bn at the same point last year, according to its interim report.

The firm’s market position strengthened particularly as a result of the pension insurance companies’ transfer periods, it said. Elo’s new premiums increased by €18.1m over the first half, bringing its market share to 25%.

Elo’s CEO Satu Huber said: “Our market share has seen strong growth since Elo began its operations. We have invested in customer experience and service development, in particular.”

Hanna Hiidenpalo, CIO at Elo said unlisted investments had generated the best returns during the first half of the year.

“This supported the overall rate of return as returns in the securities markets were weighed down by the volatile economic climate,” she said.

During the first half, Elo’s private equity allocation produced 6.7% and real estate returned 3.1%. Listed equities generated 0.3%, while fixed income investments made a 0.9% loss in the three-month period.

VER recovers from Q1 loss

Meanwhile, Valtion Eläkerahasto (VER), Finland’s state pension fund, saw investment losses in the first quarter corrected in the second, leading to a 0.5% return for January to June as a whole.

Commenting on the investment environment in the reporting period, VER said that – among other factors – the Finnish equity market had performed well, although the trend had been reversed in late spring. 

In Europe and emerging markets the returns were lower, it said.

Listed equities produced a 1.8% return in the first half, while private equity investments returned 9%, unlisted equities produced 3% and VER’s real estate investment trusts allocation generated 0.8%.

Liquid fixed income made a 1.6% loss in the six-month period, but the category of “other fixed income investments” – which includes investments in private credit funds and direct lending to companies – made a 1.5% return.

The fund said future monitoring and evaluation of the its investment activities would increasingly focus on long-term outcomes and future prospects instead of quarterly reporting. 

“However, VER will continue to post quarterly figures and comments to the same extent as previously,” it said.

Although in real terms, the rate of return in the first six months of the year was negative at -0.3%, VER said its five-year average real return was 5.8% and 10-year real return 4.5%.

The pension fund’s assets totalled €19.4bn at the end of June, down from €19.6bn at the end of 2017.