Henning Fredriksen, investment manager at Vital, told nrpn that the firm’s equity holdings would be increased throughout the emerging market region.

“We consider emerging market equities an attractive asset class, which has a high long-term return expectation. Although at the moment approximately 50 per cent of our emerging market exposure is in the Asia-Pacific – mainly Korea, Taiwan, Malaysia, Thailand and China. The expansion of our emerging market portfolio will take place in all geographical areas,” he said.

As a part of the expansion process, Vital recently appointed two external managers. New York-based OFI Institutional Asset Management started managing a $100m global emerging markets equity mandate in early March 2006. London based Mondrian Investment Partners Limited were appointed in August 2005 to manage a mandate with a similar value.

“We chose OFI and Mondrian after a lengthy screening process, which involved thorough research of the existing emerging market managers. When choosing managers, the issues we consider are performance, investment process and risk management, organisation and partnership culture of the manager as well as its investment style,” Mr Fredriksen said.

At present Vital’s three per cent exposure to emerging market equities is split in Pacific Asia (50 per cent), Latin America (25 per cent), Africa (14 per cent), Eastern Europe (9 per cent) and the Middle East (2 per cent).

In addition to equities, Vital’s portfolio consists of bonds (45.2 per cent), money markets (16.8 per cent), property (12.2 per cent) and alternative investments (2.5 per cent).

In 2005, the firm’s foreign equity investments yielded a return of 22.3 per cent, whilst return on the whole portfolio was 8.3 per cent. Total assets increased by 15.1 per cent since the end of 2004. The firm follows ethical principles in its investments, which involve compliance with UN’s Global Compact and OECD guidelines for multinational companies.
RC

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