PensionDanmark Sees 2.8% Asset Growth in Tough First Half

Real estate and private equity do OK, while stocks and bonds suffer.

After a turbulent half-year, one of Denmark’s largest pension plans added 1.1 billion Danish krone ($172 million) for the six months ended June 30, boosting assets by just 2.8%.

PensionDanmark, which has $37 billion in assets under management, saw its assets grow both through contributions and investment returns. Topperforming asset classes were real estate, private equity, and infrastructure, slightly underwhelming as they returned 4.4%, 4.2%, and 2.7%, respectively. Stocks and bonds did not fare well. The fund did not report those returns, but Torben Möger Pedersen, PensionDanmark CEO, said they were “close to zero.”

In 2017’s first half, the fund returned 8 billion Danish krone. Its 65- and 40-year old members achieved a 3.3% and 5% return on their savings, respectively.

Pedersen called the half-year “challenging with moderate investments returns…alongside with substantial fluctuations in especially share prices.” He said the results were “satisfying” and noted that there was widespread employment for the fund’s 721,000 members during the period.

Members aged 60 and 40 saw a 0.6% and 0.5% return on their savings, respectively.

The fund did not disclose its allocations and its overall returns over the period.

PensionDanmark manages the assets of its plan members in a lifecycle-type product, where allocations shift in accordance with a person’s age. Allocations for those under the age of 41 were 59.5% equities and credit, 25.6% in alternatives, and 14.9% in a variety of bonds. For 60-year-olds, the fund had invested them in 42.4% investment grade assets, 35.5% equities and credit, and 22.1% alternatives.  

PensionDanmark expects to have close to $58 billion in assets under management by 2050, according to its website.

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