Danish Pension Fund ATP Opens Up to Investing in Europe

(October 30, 2011) — Denmark’s biggest pension fund, ATP, has revealed that it is open to investing in Europe’s rescue vehicle.

“We’ll look into it, whenever the details arrive, with substantial vigilance,” Lars Rohde, chief executive officer of the $140 billion fund told Bloomberg. 

This week, Euro area heads agreed to inflate the European Financial Stability Facility (EFSF) to $1.4 trillion. German Chancellor Angela Merkel told parliamentary leaders that the European Union’s rescue fund would be leveraged by providing first loss guarantees on peripheral sovereign bonds and through contributions made by the International Monetary Fund.

Rhode added: “A major issue is whether there’s enough money in the EFSF…Just how much leverage and how it’ll be carried will be essential questions to sort out before committing to such a structure.”

Earlier this year, ATP revealed that it would avoid government bonds issued by the European Union’s most indebted nations. The fund noted that it had completely avoided government debt issued by Greece and Ireland, with European government bond holdings only including Danish, German and, to a lesser degree, French bonds.

The renewed commitment to investing in Europe by ATP follows statements made by Dag Dyrdal, Chief Strategic Relations Officer at Norges Bank Investment Management (NBIM), who told aiCIO in March that the fund has played a major role in the EFSF, and will remain positive toward the initiative to rescue nations from default.

Industry officials, such as the philanthropist billionaire and hedge fund legend George Soros, have expressed heightened support for a European bailout fund to guard the area from its debt crisis. “We got much less than we asked for — about 3% of the total amount of EFSF’s issue,” Dyrdal said in March, noting that the fund views eurozone bonds as having less risk than single-sovereign debt. “We remain big players in fixed-income investment in Europe, and are long-term investors.”