Finland’s State Pension Fund (VER) achieved a 4.9% return on its investments in 2015, according to preliminary figures, down from 7.8% the year before.

The fund said private equity had produced the highest return of all asset categories over 2015, while the return from fixed-income investment was barely positive at 0.2%.

Timo Viherkenttä, VER’s chief executive, said: “All the asset classes invested in by VER in 2015 yielded a profit despite the highly volatile markets.”

At the end of last year, the market value of assets stood at €17.9bn, up from €17.6bn at the end of 2014.

The increase comes despite VER being required to contribute a further €500m to the 2015 Finnish government budget under a one-year exceptional law, coming in addition to its payments to cover state pension expenditure.

Viherkenttä said returns had been good in particular from private equity, infrastructure, real estate and private credit funds.

“Any return exceeding five percent underpins the financial base of the state’s pension system,” he said.

The full-year return is markedly higher than the nine-month return VER reported in October of just 1.1%.

The pension fund said that given the slightly negative rate of inflation, its investment return for 2015 had been 5.1% in real terms.

Private equity funds alone generated 18.6% last year.

Of the large asset classes, listed equities produced 10.3% and liquid fixed income instruments returned 0.2%, it said.

VER’s asset allocation shifted towards equities and away from fixed income during the year, with the latter accounting for 49% of investments at the end of December compared with 50.4% a year earlier, while equities made up 43.1% of the asset mix — up from 39.5%.

The category of “other investments” slimmed to 7.5% from 10.1%, data showed.