Norwegian pensions firm Oslo Pensjonsforsikring (OPF) produced a return of 8.8% in 2013, with strong returns from higher-risk assets boosting overall investment profits.
The return was marginally higher than the 8.6% generated the previous year.
Delivering full-year results, the local authority pensions provider said: “In 2013, the return was created in asset classes that are normally associated with higher risk, unlike the year before, when it came from several sources.”
Returns on Norwegian and foreign listed shares were 13.7% and 30.9%, respectively, it said.
Hedge funds, private equity, convertible bonds and high-yield bonds returned more than 10%.
However, returns on money market investments and bonds were marked by low returns, OPF said.
The company made a profit for the full year of NOK522m (€62.7m), compared with NOK446m in 2012.
OPF said it completed its accumulation of reserves to meet new requirements relating to longevity risk from the Norwegian FSA, making a NOK375m provision in 2013 for increases in life expectancy.
Total assets rose to NOK62.5bn by the end of December 2013 from NOK56.4bn the year before.
Meanwhile in Finland, Varma ended 2013 with a return of 9% and said the country’s solvency rules had allowed it to invest profitably.
The result compares with a 7.7% investment return reported the year before.
Risto Murto, president and chief executive at Varma, said: “The period after the financial crisis has been good in terms of investments, despite the uncertain economic situation, and at the same time, the national solvency legislation has given us the opportunity to invest assets profitably.”
The good investment returns produced meant the firm’s solvency was at an all-time high, he said.
Total investment assets rose to €37.7bn at the end of December 2013, up from €34.4bn a year before.
Solvency capital increased to 31.6% of technical provisions from 28%.
Equities produced the highest returns among asset classes, finishing the year with a return of 21.8%, up from 14.5% the year before, the company said.
In particular, Finnish listed equities fared well, with a 33.7% return after 2012’s 21.3%.
Fixed income investments generated just 1.2%, down from 4.4%.
Varma said these investments were burdened by its cautious risk policy, with government bond holdings focused on those bonds with the best credit rating.
In the course of last year, Varma said it increased the proportion of equities in its portfolio and cut the fixed income weighting.
Real estate investments returned 3.1% compared with 4.5% the year before, with 2013 returns in this asset class affected by fair value depreciations applied during the year, Varma said.
Hedge funds returned 8.8% up from 6.8%.