Finland's Etera targets SRI and green property
FINLAND - Etera, the Finnish mutual pension insurance company, has hired a new asset manager focusing solely on developing socially-responsible invvesting (SRI) policies for its €5.3bn portfolio.
Malin Ringwall, who previously worked as analyst at Alecta Investment Manager and Chase Robert Fleming in London, joins the firm next week.
Jari Puhakka, Etera's chief investment officer, said the firm is increasing its focus on SRI and environment;
"Our portfolio already includes funds investing in climate and renewable energy, for example. Dedication to SRI issues will become more visible in the selection of our investment targets in the future," Puhakka told IPE.
The firm has also signed the United Nations Principles for Responsible Investment (UNPRI) and joined Finland's Green Building Council (FIGBC). Signing the UNPRI means in the future Etera will increasingly focus on environmental and social responsibility, corporate governance and ownership.
The FIGBC, on the other hand, aims to support sustainable development in property and construction industries.
Etera has property investments worth some €800m, with residential property in the capital region of Helsinki accounting for some 10% of this sum.
The company owns 25% of shopping centre Sello in Helsinki, which received a Leadership in Energy & Environmental Design (LEED) certification for being environmentally friendly last year.
Etera is currently building the Agency for Rural Affairs in Seinajoki, north-west Finland, and has applied for a LEED certificate. The fund also owns retirement homes and office blocks in thr country and is constructing the premises for Alma Media in Helsinki.
"In addition to the boost in focus on SRI and environmental friendliness, we are in the process of increasing our exposure to energy and environmental efficiency as well as to direct investments in listed firms in European Union member states and the United States," Puhakka added.
In September 2010, Etera's portfolio was invested in fixed income (54%), equities (29%) and property (14%). Other asset classes accounted for 3% of all holdings.
Over the third quarter of 2010, Etera built up a portfolio investing directly in European equities. "We gave up on investing on the basis of indexes and today trust on our own analysis, according to which we optimise the return-risk ratio," Puhakka said.
Between January and September 2010, Etera's portfolio yielded a total return of 5.8%. The best performing class in the portfolio were domestic and Nordic equities, which pulled a return of 18.7%. Equities overall yielded a healthy 10.3%. Property, on the other hand, yielded a meagre 1.4%.