DENMARK - The e3bn Danish pension fund for engineers, Dansk Civil og Akademiingeniors Pensionskasse, is considering allocating 0.5-1% to the eastern European equities markets by year-end.
The fund is likely to search for specialist managers for this brief, later in 2004. The fund’s current allocation to emerging markets is 3%.
Søren Kolbye Sørensen (pictured), Managing Director said: “We feel our exposure to eastern europe is too low. But we are proceeding cautiously - we have to see if returns justify the investments. We also have to be very selective in finding specialist managers because there are no easy returns to be found here.”
On hedge funds, he said that the fund had considered the asset class but decided against investing.
Sørensen added: “Hedge funds as an asset class are not homogenous and there are a lot of different types of instruments. We do selectively look at a lot of different absolute returns strategies but at this point of time, we have not invested in any absolute return strategies and we do not intend to invest in any of them.”
Current asset allocation of the fund stands at 29% equities, 42% Danish fixed income, 18% foreign fixed income and 10% real estate.
In 2003, the fund had returns on investments of 10%. The “satisfactory” results have been attributed to the equity portfolio, particularly Danish equity and high-yield bonds.
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