Positive gain for Varma ups assets by €2bn
FINLAND - Varma Mutual Pension Insurance Company reported a first half return of 4.6%, resulting in the value of the investments increasing by almost €2bn to €26.5bn.
First half figures from Varma, the largest earnings-related pension insurer in Finland, showed the return on its equity portfolio was 9.8% overall - with quoted equities producing the best return of 16.5% - while fixed income yielded 3%, real estate returned 0.7% and other investments such as hedge funds, returned 10%.
Matti Vuoria, chief executive of Varma, said: "Investment income made a clear recovery during the first half of the year, even though the difficulties affecting the real economy continue."
The total result for the first half was €572m, helping the value of the investment portfolio to increase from €24.6bn at the end of 2008 to €26.5bn six months later, as the volume of quoted equities in its portfolio increased by 12%.
Varma also highlighted its increased allocation to real estate investments over the last 12 months, including several major projects around Finland, resulting in a yield of 2.9% on direct real estate investments but a return of -12.6% on its property investment funds.
"Our operations are based on work carried out in Finland, and these projects also contribute to increasing employment and reviving the economy. As a real estate investor, we focus on domestic and long-term investments," added Vuoria.
The figures showed the solvency position of the firm had also improved in the first half of the year to report a solvency margin of €4.271bn, up from €3.698bn, which is equivalent to 19% of technical provisions against just 16.9% at the end of 2008.
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