IRELAND - New figures published by Mercer Investment Consulting (Mercer) show stable performances across Irish pension funds at the end of Q1, despite being hit by the downturn of pharmaceutical giant, Elan.
Latest performance measures showed little difference between pooled and segregated pension funds. The average pooled return was 0.9% for Q1; segregated pension figures returned 0.7%.
The results are part of Mercer’s combined performance measurement survey (CPMS), covering over 200 Irish pension funds, and representing assets of over EUR20bn.
According to the survey, Irish pension funds outperformed their UK and US counterparts in 2001, despite registering negative figures across pooled and segregated fund returns.
Over 2001, segregated funds slipped to an average 5.1% return; institutional pooled funds dropped to 5.7%.
Commenting on the results, senior investment consultant at Mercer Tom Geraghty said that the figures reflected a traditionally high allocation to Irish equities, which stood at an average of around 17%. He added that Irish equity was one of the best performing asset classes in 2001, returning around 1.6%.
“Interestingly enough, while Irish pension fund's relatively high allocation to Irish equities had been a main contributor to overall performance in 2001, the Irish equity market, in particular Elan which made up 20% of the market, was the main detractor of performance in Q1 2002,” he said.
“The demise of Elan dominated the quarter and was the single biggest relative performance factor. The ISEQ was down almost 9% for Q1, but excluding Elan, the rest of the market actually rose by over 8%. This obviously dragged down the average Irish pension fund return.”
According to the research, Irish pension fund investment also adopted a conservative approach with a rise fixed-income exposure. At the beginning of 2001, CPMS funds had an average holding of 18.9% in bonds; this figure rose to 20.2% at the start of 2002. Equity allocations were also down from 71.7% to around 70% during the same period.
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