Ilmarinen hopes to benefit from Finland’s underdeveloped infrastructure market as it shifts its investment strategy towards greater exposure to real assets and private equity, according to its CIO.
The €31bn mutual pension insurer’s deputy chief executive and CIO Timo Ritakallio told IPE that, as part of the shift in strategy by 2020, it would also be considering a larger number of infrastructure co-investments.
He noted that Ilmarinen had already acted as co-investor in a motorway under construction in Finland.
The financial details of the €425m E18 road project, from Kotka to Koskenkylä, were agreed in late 2011, and the project is jointly owned by Ilmarinen and Meridiam Infrastructure.
“I see us making more of these infrastructure investments,” he said, “not only to invest into infrastructure funds, but also to make co-investments with other infrastructure funds.”
Asked about the possibility of investing in public private partnerships (PPPs) in Nordic neighbour Denmark following a report on PPPs by five of the country’s larger pension funds, he said it was “possible” and pointed towards its success with the E18.
Ritakallio was positive about the opportunities for infrastructure investment in Ilmarinen’s domestic market.
“In Finland, we see a lot of opportunities to make infrastructure investments,” he said.
“The reason is that the whole market is still underdeveloped, and, therefore, we see opportunities to be had here.”
The CIO has told IPE the shift in asset allocation will see the mutual lower its domestic equity exposure to as little as 20% by the end of the decade.
For more on Ilmarinen’s investment approach, see the November issue of IPE