FINLAND - Valtion Elakerahasto (VER), Finland's state pension fund, has confirmed plans to further diversify its investment portfolio following a €2bn increase in its value.
VER reported in its 2007 preliminary results the portfolio achieve a return of 1.8%, compared to 7% in 2006, but highlighted the average annual return on investment over the last five years has increased to 8.5% - up from 8.1%.
In addition, the fund confirmed the market value of its investment portfolio has now exceeded the €12bn mark, up from just €10.3bn in 2006, following an increased allocation to 'other' investments.
VER currently invests 38% of its portfolio in equities, 56% in fixed-income and now has an increased allocation of 6% into other investments, which follows the limits set by the Finnish Ministry of Finance.
But, following the government's decision to increase the maximum limit for other investments from 10% to 12%, VER confirmed last year it intends to further diversify its portfolio, while meeting the remaining guidelines which require 45% minimum investment in fixed-income and a 45% maximum investment in equities. (See earlier IPE story: Finnish fund edges towards alternatives limit)
Timo Löyttyniemi, managing director of VER, said today: "The value of VER's investments rose significantly during 2007. During the year, we increased the share of other investments to 6% and we will continue to diversify our investment portfolio even further."
VER is currently responsible for around 1.1 million members, and is used by the Finnish government to finance future pensions, and even out pension expenditure.
The full profit statement for 2007 will be released by VER on February 29.
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