DENMARK - Danish pension fund PensionDanmark booked a total investment return of 7% for 2006, raising the scheme's entire assets to DKK62bn (€8.3bn), despite moderate nominal bond returns.
Particularly the fund's investments in equity, making up just under 36% of the overall assets at the end of 2006, performed well with returns of 15.6%.
Also private equity, returning 14.1%, and real estate, with 15.7%, "lifted" the returns, the fund said in a statement.
"More than half of PensionDanmark's investments are in equity, private equity, high yield bonds, real estate and alternative assets like hedge funds, infrastructure funds and senior bank debt. This has significantly contributed to the solid investment return in a year when investments in Danish nominal bonds have yielded an only very modest return," said Torben Möger Pedersen, chief executive of PensionDanmark.
"The overall investment return for 2006 was 0.3 percentage points better than its benchmark," the fund announced today.
However, nominal bonds, making up 36.9% of the fund's portfolio, booked returns close to zero.
Still, "the nominal bonds gave a yield that was higher than the market yield, " said chief investment officer Claus Stampe.
He added: "The higher than benchmark return can be attributed to our external equity managers that generally outperformed the market."
PensionDanmark's annual report for 2006 is expected published on March 14.