NETHERLANDS - The €4bn Dutch pension fund of paints giant Akzo Nobel has so far lost over 25% this year on its equity holdings, reducing its solvency ratio to 120%.

In its latest investment results, the fund today revealed it had booked a negative investment return in the third quarter of -4.6% - the fifth consecutive negative quarterly return for the fund since the beginning of the credit crunch.

Akzo Nobel managed to maintain a reasonable coverage ratio of 120%, which had dropped from 137% at the end of June; nonetheless, the scheme's funding level has dropped below its required level mentioned in the annual report for 2007 of 122.4%.

None of the fund's portfolios produced a positive return in the three months to the end of September, but it was the equity portfolio which saw the biggest fall as the asset class generated a negative return of -10.6% on Akzo's 38.6% in equity holdings, pushing the losses on the portfolio year-to-date down to -25.7%.

Fixed income,which makes up 44.8% of the fund's assets, made a loss of 2.8%, while real estate - amounting to 11.3% of the fund, delivered a negative return of -4.4%.

Even the commodities portfolio, in which the fund invests just over 5% of its assets, produced its first negative result this year with a loss of 16.4%.

The loss on commodities is in contrast to the 32.3% return the fund generated in the second quarter.

Akzo Nobel has been adjusting its equity/bonds mix since the beginning of this year, when its equities exposure was still larger than that of its exposure to fixed income.

The current equity exposure is 38.6%, down from 43% at the beginning of this year, while fixed income has been pushed up from 42.7% to 44.8%.

If you have any comments you would like to add to this or any other story, contact Carolyn Bandel on +44 (0)20 7261 4622 or email