DENMARK - The DKR105bn Pensionskassernes Administration A/S (PKA), Denmark's third largest pension fund, is on the cusp of making first-time allocations to commodities and infrastructure.
CIO Michael Nellemann Pedersen (pictured) said the pension fund administration company was still on the hunt for an infrastructure fund of fund investment after discussions with Australian-based Macquarie broke down earlier this year.
“Unfortunately the supply in the market is very poor,” he said. “We were in discussions with Macquire about investing in one of their funds earlier this year but we did not proceed to join them. We are still searching - it could be Goldman Sachs or JPMorgan with whom we start up a fund. I think all the big players in the pension market are searching for this asset class.”
PKA covers eight occupational pension funds across the health care sector including the pension funds for midwives, social workers and social pedagogues, state registered nurses, medical secretaries, hospital catering officers, laboratory technologists , county office workers and therapists and physiotherapists.
On infrastructure, the fund is working towards a long term target allocation of between 3% and 5% of total assets.
“[Infrastructure] is a long term arrangement where you’re able to receive a yield,” Nelleman Pedersen said. “We are in a desperate need for some yield on the bond side.”
Nelleman Pedersen said high oil prices had forced the fund to hold off on investing in commodities. No decision had been made on the amount the fund would invest.
“We are reluctant for the time being because of the high oil prices so we don’t think it’s the right time to enter the market,” he said.
Last year the fund made a US$30m first time investment to forestry through a number of funds with specialised knowledge of the sector.
The fund’s asset mix stands at 35% equities, 10% real estate, 10-12% derivatives and 41-43% bonds, including emerging market debt, high yield, European and Danish bonds.
Mark Evans has been appointed as a director at Independent Trustee Services (ITS) to lead trustee appointments in London.
The Pension Protection Fund (PPF) is consulting on changes to the actuarial assumptions it uses in valuations in a bid to better reflect the bulk annuity market, with schemes set to move into surplus on aggregate.
Private sector defined benefit (DB) schemes were 96.3% funded on a Pension Protection Fund (PPF) compensation basis at the end of July, according to the lifeboat fund's monthly index.
Conduent has completed the sale of its actuarial and human resource consulting business to private equity investor, H.I.G. Capital.