TNO shows good return despite credit crisis
NETHERLANDS - Despite the credit crisis, the €2bn pension fund of the applied scientific research institute TNO returned over 4% on investments during the third quarter.
Details of the pension fund's latest financial results reveal the return, equal to that achieved during the first six months of this year was mainly because of returns on investments in hedge funds, equity in emerging markets and private equity.
According to Mark Burbach, TNO's head of asset management, specific figures have yet to be published but told IPE hedge funds returned over 12.5% in US dollar investments - of which over 50% has been hedged - during the first three quarters.
"Thanks to an underweighting in listed property and equity, we have managed to limit last summer's volatility to 3% of our invested assets," he added.
During the third quarter, the coverage ratio of the TNO scheme decreased to 143.2% from 147%. At the start of the year, the funding ratio was 132%.
The pension fund has scaled back its investments in equity this year by almost 3% to 35%, while raising its stake in fixed income by almost 5% to 40%, Burbach indicated.
TNO's investments in hedge funds and private equity have also increased to almost 6% and 7.8% respectively.
The TNO scheme runs pension plans for 14,000 participants in total, not only for TNO, but for other employers in its sector too.
In September, it appointed investment management firm BlackRock as its fiduciary manager.
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