FINLAND - Veritas Pension Insurance has confirmed it has appointed a replacement for Thor Sourander, vice president of asset management, when he retires at the beginning of December.

Staffan Sevón will join the €1.75bn pension fund from Nordea where he has worked as a manager in the investment management, savings and asset management areas since spring 2008.

Sourander is currently responsible for the investment of the fund, which at the end of September had 27.1% of assets allocated to equities, 52.2% in fixed income instruments, 19.3% in real estate, and 1.4% in hedge fund investments.

Veritas confirmed that Sevón, who has previously worked in the pension insurance sector for Municipal Pension Insurance, will take on the role of director of asset management from 8 December 2008, once Sourander, who is 61, retires.

Third quarter results from Veritas revealed the pension fund reduced in value from €1.86bn to €1.75bn as investment returns for the nine months of 2008 was -10%. (See earlier IPE article: Veritas and Tapiola report negative returns)

But Sevón said the difficult market situation is an "interesting challenge", as Veritas is "clearly one of the most solid pension insurance companies in our country and has a well-positioned portfolio for this market".

"Veritas has a long tradition of well-managed, investment activities and we will also get over this market situation," added Sevón.

Jan-Erik Stenman, managing director of Veritas, praised Sourander's "long career" at the company as in that time investment returns were "among the employees pension industry's best", with a five-year average return of 6.5%.

"I want to thank Thor Sourander for a creditable job not only for Veritas Pension Insurance but also for the entire employee pension industry. Sourander has been a very popular and respected colleague," added Stenman.

Meanwhile, the Finnish state pension fund Valtion Eläkerahasto (VER) revealed the value of its assets had fallen from €11.4bn at the end of June to €10.96bn at 30 September 2008, following an investment return of -3.4% in the third quarter.

For the first nine months of 2008 VER reported an investment return of -9.8%, even though it slightly reduced its allocation to equities over the third quarter from 34.4% to 33%, while investments in fixed income increased to 60% and the allocation to other investments - including real estate, infrastructure, venture capital and absolute return funds - slipped from 7.2% to 7%.

Figures from VER also showed the return on fixed income for the nine months of 2008 was 2 %, although the positive result was offset by a -27% overall return on equities and -3% yield from other investments.

However as VER is the state pension fund it has a restricted investment portfolio, with the Finnish Ministry of Finance specifying it must hold at least 45% of its assets in fixed income, while equity investments cannot exceed 45% and allocations to alternative investments must not be larger than 12% of the assets.

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