DENMARK - The Dkr16bn (e2bn) Finanssektorens Pensionskasse, the Danish pension fund for the financial sector, is mulling investments in hedge funds and emerging markets.
The fund is considering a minimum allocation to both asset classes and may start a search for external managers later this year.
Fund officials said: “We have been looking at these two asset classes for some months now to further diversify our portfolio.”
The fund’s current asset managers include Fiduciary Management (European small cap), Northern Trust (index portfolios for Europe and US large cap) and SEB (corporate bonds).
Northern Trust has replaced Nordea which held a global equities portfolio and Danske Capital which held a large-cap equities portfolio.
The current asset allocation of the fund stands at 7.5% real estate, 72% bonds and 20% equities. Bonds include 8% towards high yield bonds, 47% to Danish bonds, 16% to foreign bonds. The fund manages Danish and foreign bonds and Danish equities internally.
The fund is also looking to increase its exposure in equities portfolio to 25% and hike its investments to property to 10%.
Officials said the rise in equities allocation was due to a more positive market outlook as well as the fact that the equities markets were a lot less volatile than previously.
In 2003, the pension fund had returns of 8% on the back of a strong performance from the equities portfolio.
The Next Generation Pensions Committee is on a mission to promote and encourage younger voices in the industry. Kim Kaveh looks at its key objectives
This week's top stories included an analysis finding the cost of equalising guaranteed minimum pensions in schemes could hit FTSE 100 profits by up to £15bn.
Employers whose dividend to deficit recovery contribution (DRCs) ratios fall outside the "normal range" should expect to see higher regulatory scrutiny, although no fixed ratio will be set.
Investment consultants and fiduciary managers should expect a final decision on the investigation into the market to be published by the end of the year, the competition watchdog says.