While Keva’s chief executive Markku Kauppinen would not comment on the developments, the move was confirmed by one of the fund’s portfolio managers and an external manager who won one of several new active mandates.

The portfolio manager said: “During the crash, active management did poorly and at that point many didn’t think it would pay off to be active. But now confidence is back so we’re more interested in active management.”

Prior to the move, Keva had all of its e1.5bn worth of emerging market equities passively managed via vehicles such as exchange traded funds and indexed funds. Now two-thirds of this is active and the remaining third will stay passive.

Keva suffered massive losses of 20.6 per cent on its investments in 2008, equalling a loss of €4.3bn. Equities were the biggest losers with negative returns of 41.9 per cent. The fall brought its annualised returns since 1988 to 2 per cent.

The external manager that won one of the mandates said that as markets have come back, Finnish investors have sought to increase their active risk and make their equities “work harder”. The Finnish fund is looking to add total return and niche product investments to its portfolio, and there is also a restructuring going on with its Japanese equity allocation and team.

Keva currently has 36.6 per cent of its investments in equities, 48.7 per cent in fixed income, 10.6 per cent in real estate and the remaining 4.1 per cent in alternatives. Its equity allocation was as high as 53 per cent last year, but the figure fell drastically as its stocks lost value.

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