EUROPE – Keva, the Finnish local government pension fund, returned 3.8% over the first quarter, bringing its assets to more than €35.8bn.
Listed equities and equity funds returned 8% over the period, while fixed income returned 1.2%.
The return on real estate investments, including real estate funds, was 0.6%.
Among the smaller asset categories, the return on private equity was 2.8%, hedge funds 3.4% and commodities 0.1%.
As of the end of March, fixed income accounted for 45.9% of Keva’s overall portfolio, listed equities and equity funds 38.7% and real estate 7.5%.
Private equity investments accounted for 4.9%, hedge funds 2.4% and commodity investments for 0.6%.
CIO Ari Huotari said: “We have had no major expectations for this year’s investment result, in light of the exceptionally good result we had last year.
“Estimates on the return potential of fixed income investments, in particular, appeared to be rather modest.
“The scarcity of alternative investments was expected to bolster the equity markets, which largely turned out to be the case in the first quarter.
“Concerns over global economic growth, for example, have become more pronounced in April, and the euro-zone unfortunately continues to be plagued with problems.”
In other news, investments at Finnish pension insurer Varma returned 3.4% in the first three months of the year, with unlisted equities returning 15.6% over the period.
Risto Murto, Varma’s executive vice-president, said: “Finnish listed companies remained the stars of Varma’s investment portfolio.”
Equities overall produced the best return of the major asset classes, at 7.6% in the first quarter, compared with 11.9% in the same period the year previous.
Within this asset class, Finnish listed equities returned 11.7%, while unlisted equities produced 15.6%.
“The operations of major Finnish listed companies are closer to Shanghai than to Brussels,” said Murto, adding that, for an investor in listed companies, this had been a good thing, since it secured the growth of Finnish companies.
“On the other hand, the euro-zone faces being caught in a trap of low interest rates and growth, similar to Japan.”
The asset weighting in Varma’s portfolio shifted towards equities and away from bonds during the quarter, the company said.
This was partly because of active investment measures and also a result of the increase in share prices.
Solvency strengthened between the beginning of the year and the end of March, with solvency capital rising to more than €8.4bn from €7.5bn.
In relation to technical provisions, solvency capital was 30.1%, up from 28%, and 2.1 times the solvency limit compared with 2.4 times at the start of the period.
Looking ahead, Varma said the market situation remained uncertain, and the outlook for the Finnish economy still subdued.
Total assets increased to €36.2bn from €33.9bn.
Lastly, pension insurer Veritas posted a 2.4% investment return for the first quarter, with US equities having turned in a particularly strong performance.
Equities as a whole generated a 5.8% return, while listed equities produced 6.5%, according to unaudited data for the period.
Veritas’s investment manager Veronica Törnwall said: “Domestic shares performed well, but the US stock market performed especially well.”
Fixed income investments finished the quarter with a return of 0.8%, while real estate investments returned 1.5%.
Veritas said its solvency improved by almost 5 percentage points in the quarter, partly because of the new solvency rules that came into force on 1 January, and partly because of good investment performance.
The solvency ratio rose to 28.8% of technical provisions compared with 24.1% at the end of 2012, and the solvency position increased to 2.5 times the solvency limit from 2.4 times.