“We have also just invested €75m in a fund of hedge funds managed by Eden Rock,” said Claus Stampe, CIO at PensionDanmark. “This is a specialised fund with investments in approximately 50 hedge funds.”

Because of the current low interest rate environment, added Mr Stampe, “it is particularly attractive for us to complement our bond investments with alternatives. Alternatives will give us a higher return and help us spread our risks. In four to five years’ time we will increase our alternatives exposure to between eight and 10 per cent of our total holdings.”

According to the fund’s latest results, PensionDanmark returned 7 per cent in 2006, down from 15 per cent in 2005.

Although it was a bad year for Danish bonds, PensionDanmark controlled the damage by allocating around 40 per cent of its investments to equity, private equity and real estate, which turned in 15.6 per cent, 14.1 per cent and 15.7 per cent respectively.

“This has significantly contributed to the solid investment return in a year when investments in Danish nominal bonds have yielded an only very modest return,” said Torben Möger Pedersen, CEO of the fund.

PensionDanmark returned 7.5 per cent from its high yield bond allocation (1.9 per cent of the total portfolio) and 7.0 per cent from its emerging market bond holdings (1.8 per cent of the portfolio). Its index-linked bonds and nominal bonds only returned 2.2 per cent and 1.0 per cent respectively (11.2 per cent and 36.9 per cent of the portfolio).

PensionDanmark’s annual report was published in mid-March.

CL

Printer friendly version

Email this article to a friend