Nordic roundup: Finnish returns, TELA, Nordea, PenSam
Assets in Finland’s earnings-related pension schemes rose €3.3bn in the first quarter to €165.5bn, helped by listed and unlisted equities performance, according to pensions alliance TELA.
The seven largest earnings-related pension providers saw increases in their operating income of between 1.1% and 2%, according to data from the organisation, whose members include pension funds, foundations and insurance companies.
Maria Rissanen, analyst at TELA, said pension schemes achieved their highest returns in the three-month period from listed and unlisted equity investments.
“Indirect investments in real estate, hedge funds, listed equities and corporate bonds also yielded well,” she said, adding that income now came from a wide variety of sources.
Seen overall, asset allocation of Finnish pension providers was 45.7% weighted to equities and equity-like instruments at the end of March, 43.9% to fixed income investment and 10.4% to real estate, TELA said.
The data showed the trend towards investment outside the euro-zone was continuing, with a 0.6 percentage point shift to these investments and away from domestic investments during the first quarter.
At the end of March, investments outside the euro-zone made up 45.3% of all investments, up from 44.7% at the end of December, while domestic investments fell to 29.9% from 30.6%.
Those inside the zone, excluding Finland, remained steady at 24.8%, TELA said.
The shift towards ex-euro-zone investments has continued more or less steadily since at least 2005, when pension funds had just 28% of assets held outside the zone, according to the data.
In other news, Nordea Life & Pensions and Danish labour-market pensions provider PenSam said they are co-investing DKK2.7bn (€362m) in a 120,000m2 Copenhagen residential project.
The two pension fund investors said they were jointly financing a project to build a new quarter in the Sydhavn area of the Danish capital.
Nordea Life & Pensions, which bought the land for the project several years ago, has now sold a 25% stake in the Frederiks Brygge project to PenSam.
Anders Schelde, investment director at Nordea Life & Pensions, said: “PenSam is a strong partner, that, apart from capital, will contribute expertise and experience to the the project.
“With this partial sale, Nordea Life & Pensions is getting better long-term diversification of its real estate investments.”
Benny Buchardt Andersen, PenSam’s investment director, said: “We expect the project to give a solid return to our customers because, among other things, together we are handling the whole value chain in the construction.”
The plan is to build 1,350 apartments, typically with three rooms and 85m2 in size.
The entire construction will have 120,000m2 of space, Andersen said.
The first stage of the project was completed last year with 69 homes for young people and a daycare centre.
A further 194 homes and two supermarket buildings are expected to be finished by mid-2016.
The Danish government and the Copenhagen City Council have begun talks on establishing a metro line to Sydhavn, which is expected to be completed by 2023, the investors said.