DENMARK - US fixed income specialist PIMCO Global Advisors has scooped its first mandates in the Danish market, picking up three high yield briefs from separate pension funds worth a total of $165m (e197m).
The wins come on the back of a marked shift to high yield exposure by Danish schemes following the equalisation of taxation rates on bond and equity holdings.
The DKr65bn (e8.7bn) LD plan (Lønmodtargenes Dyrtidsfond), a buffer fund created in the 70’s to cover pension rights against inflation will invest $60m with PIMCO in high yield through the firm’s Dublin funds range.
“ It is high yield US, but the fund does have in its guidelines the possibility of investing up to 15% in Europe, “ says Peter Lindgren, PIMCO’s London based director of business development.
LD is joined by BankPension, the DKr7.3bn pension fund for the country’s banking sector, which is also employing PIMCO’s Dublin based Ucits for around $30m in high yield assets.
The DKr250bnATP fund, the Danish labour market supplementary scheme is also investing $75m with PIMCO, but Lindgren notes that this will be through a domestic fund arrangement.
“ ATP is the only investor in the fund up until now and it’s their fund.
“ If they want to go and sell it then that’s up to them.
“ As far as I know it is an open-ended fund, but it is owned by ATP and if they raise more in the fund, then obviously we don’t mind!”
Lindgren, comments: “ As a fixed income specialist the Danish market has not been particularly open for us in the past. Prior to last year fixed income investments were taxed at 26% whereas equities were only taxed at 5%.
“ But now both asset classes pay 15% tax and this has turned the tables somewhat and put the market in a much better light for us.”
He notes that the Danish supervisory authority has also relaxed rules on the use by pension funds of overseas Ucits.
PIMCO currently manages around $1.3bn in the Nordic region, according to Lindgren.