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FSP tops ISP’s return through private equity

DENMARK - Finanssektorens Pensionskasse (FSP), the Danish pension fund for financial sector employees, has reported a 4.1% return on investments in the first half of this year, boosted by a near 50% profit on private equity.

"Investments produced a better result than expected," said managing director Steen Jørgensen in the fund's newsletter on its interim figures.

"This is because of a good spread of investment risk across many different assets and a healthy global economy," he added.

Equities produced a 13.8% return, including a 47.6% return on private equity, he pointed out.

A 4.1% total return represents investment held in the pension fund's traditional guaranteed-rate pension scheme, but returns for the components of the newly-introduced unit-linked scheme for new clients - FSP WebLink - were also good, the fund said.

The low-risk option of its new range returned 1.8%, while the medium risk option returned 2.8% and the high-risk choice produced a 7.1% return.

FSP's total assets rose to DKK22.2bn (€2.98bn) from DKK21.6bn at the beginning of the year, while its overall profit was DKK449m for the first half after tax, after a loss of DKK225m in the same period last year.

Meanwhile, Pensionskassen for Teknikum og Diplomingeniører (ISP), the industry-wide pension fund for engineers, made a pre-tax investment return of 1.5% in the first half of 2007.

Returns for individual assets classes were generally in line with markets, though Danish equities produced less than the market average, the fund said in its interim report.

"Against the background of the general market development, the pension fund expects a return of between 3% and 4% for the whole of 2007," the fund said.

ISP held a ballot in the spring, giving all members the opportunity to opt for a unit-linked pension, and this led to big changes in provisions, it said. In the six-month period, there was a DKK8.8bn fall in pension provisions made.

Overall, the pension fund made a loss for the period of DKK895mn, compared with a profit of DKK436 in the year-earlier period. ISP attributed the negative result to the large bonus payments of DKK2.2bn made as a result of the ballot about guarantees. But ISP's total assets under management rose by DKK406m to DKK15.3bn.

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