SWEDEN - Swedish corporates are currently suffering from the pensions bite leading to major changes in investment strategies.
Figures from Stockholm-based consultants HRS, show that corporate liabilities can typically range from SEK1-3bn (e110m-330m), or 10-25% of the market value of the company.
P.O. Öst, head of marketing at Carlson Investment Management, reckons that deficits at corporate pension funds in Sweden are at last causing significant changes to investment strategy.
He said: “The first year the down market ate into the flesh. But in Q3 last year it also ate into the bone.
“Pension funds are changing their strategic asset allocation to include more bonds.”
But Öst added that Carlson is also seeing more demand for absolute return products.
He said of closet indexing: “We in the asset management industry are responsible for following the benchmark too closely.
“Consultants are also to blame for picking the wrong managers and in many cases giving the wrong asset allocation.
“And also the client is at fault for not understanding that if you include equities and bonds at 50% each in your portfolio at times you will suffer.”
Öst added that in Sweden there was more hype than actual investment surrounding hedge funds and socially responsible investment products but that Carlson was seeing a lot of interest from pension funds in inflation-linked bonds.
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