DENMARK - Investments at Industriens Pension, Denmark's DKK46.7bn industry-wide pension fund, produced a 2.3% pre-tax return for the first six months of the year, helped by an earlier strong equities performance and a pre-emptive move to reduce risk exposure.

Its return was well above the  benchmark return of 1.4% as private equity holdings returned 16.7%, Danish equities returned 10.3% while overseas shares produced an 8.2% return, the pension fund said in its interim report.

Overall, Industriens Pension reported a pre-tax profit of DKK180m (€24.1m), up from DK52m a year earlier, while assets under management rose to DKK46.7bn from DKK38.1bn.

Industriens said it cut its exposure significantly to both domestic and foreign equities in the second quarter, mainly by using stock options. At the beginning of the year, equities made up 37.3% of the total portfolio, but this fell to just 30.1% at the end of June.

"We chose to reduce investment risks, because we judged that there was a high probability of falls on financial markets," said finance director Jan-Ole Hansen.

This action meant despite market turmoil, the pension fund's return was the same at the end of August as it had been at the end of June, the fund said.

Industriens raised its allocation to private equity to 5.0% from 3.9% in the first half of this year, and said it expects to lift this allocation further in the next few years.

The fund has also decided to increase investment in property and infrastructure, as a way of diversifying and achieving satisfactory returns, it said.

At the end of the first half, these asset classes made up just 0.3% of the total portfolio. But over the next five years, it said the property allocation would rise to 5% while the infrastructure allocation would also hit 5% in the next few years, it added.

"First and foremost, we will invest in funds that are developing new infrastructure installations, or are actively involved in improving the function and earnings of existing installations," said Hansen.