DENMARK - Pensionskassernes Administration (PKA), Denmark's largest occupational pension fund administrator, said its eight funds grew by DKK3.2bn (€429m) in 2007.

The growth corresponded to an investment return of 3.1%, said PKA in a statement, adding that total assets of the PKA pension funds rose from DKK 114.4bn to DKK 115.1bn in the course of 2007.

Despite the financial market turmoil, the overall return on equities was positive at 4.3%, and the bond return totalled 1.0%.

The return on private equities accounted for 9.6% of the investment return, while the return on real estate came to 2.3% and forestry investments contributed 8.0%.

He added that the PKA pension funds "significantly" increased their allocations to private equity investments in 2007, with further increases expected in 2008.

"The return on listed equities underperformed the benchmark, which is obviously not satisfactory," commented Michael Nellemann Pedersen, PKA's chief investment officer, though warning the return should be seen over a period of several years.

PKA also said its interest rate hedging instruments, which it uses to protect pensions and provide financial scope against falling interest rates, dropped by DKK4bn because of rising interest rates.

The movement was counterbalanced by reduced provisioning needs of DKK4bn.

In January, the PKA already announced better administrative systems had allowed it to reduce its costs for members. (See earlier article IPE.com: ‘PKA sees costs fall')

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