Welcome to the winter edition of Nordic Region Pensions & Investment News, Financial Times Business’ dedicated publication for the pension and investment industries in the Nordic countries, which has now entered its second year.

Velkommen til vinterudgaven af Nordic Region Pensions & Investment News, Financial Times Business’ særlige publikation for pensions- og investeringsbrancherne i de nordiske lande, som nu er gået ind i sit andet år.

Tervetuloa lukemaan Financial Times Business –yhtiön Pohjoismaiden eläke- ja sijoitustoimialoille suunnatun ammattilaisjulkaisun talvinumeroa, joka aloittaa lehtemme toisen vuosikerran.

Velkommen til vinterutgaven av Nordic Region Pensions & Investment News, den tilegnede publikasjonen fra Financial Times Business for pensjons- og investeringsindustrien i nordiske land som nå går inn i sitt andre år.

Välkomna till vinterupplagan av Nordic Region Pensions & Investment News, specialtidskriften från Financial Times Business för pensions- och investmentsektorn i de nordiska länderna som nu går in i sitt

andra år.

The Norwegian market is braced for a flurry of regulatory activity in 2006, beginning with the introduction of obligatorisk tjenestepensjon (OTP), which will require private sector employers to offer their workers a group pension plan from January.

Several Norwegian municipalities have moved their group pensions schemes to Storebrand ahead of the obligatory tjenestepensjon (OTP) reform, which requires all Norwegian private sector employers to offer their employees group pension plans from January 2006.

Pædagogernes Pensionskasse (PBU), the €3.5bn Danish pension fund for early childhood teachers, is in the process of expanding its private equity (PE) portfolio and increasing its exposure to foreign equities.

Nordic pension and life insurance funds plan to increase their exposure to private equity and reduce their fixed income holdings, according to the results of nrpn’s second quarterly investment survey.

Denmark’s BankInvest, which runs more than €10bn of total assets, is to launch an emerging markets SRI fund in March next year.

Sampo Life, part of Finland’s Sampo group, is expanding its operations into Norway.

Evli, the Finnish investment bank, has launched a total return long-term fixed income fund. Evli Target Bond invests in government and corporate bonds, emerging market debt, money market and other fixed income instruments.

AP 7, the SKr57bn (€6bn) Seventh Swedish pension fund, and ATP, the €47.8bn Danish Labour Market Supplementary Pension Scheme have introduced an alpha-beta separation in their internal equity mandates.

The Icelandic government has unveiled plans to work with the Confederation of Labour (ASÍ) and the Confederation of Icelandic Employers (SA) to reduce the growing burden of disability pension payments on pension funds.

AP 2, Sweden’s SEK173bn (€18.3bn) second national pension fund, has poached Eva Halvarsson from the Swedish Ministry of Industry, Employment and Communications to become its chief executive officer.

A total of 10 major Finnish companies dismantled their pension funds and transferred the liabilities to specialist pension insurance companies this year.

Sweden’s €19bn pension savings platform, the Premium Pensions System (PPM), which has been suggested as a basis for the UK’s National Pensions Saving Scheme, is likely to be reformed following the publication of a report by Karl-Olof Hammarkvist, professor at the Stockholm School of Economics.

In comparison to its Nordic neighbours, the rate of early retirement in Iceland remains very low. Stephen Bouvier tracks the history of the disincentives for retirement, and how the developing pensions system and tide of older workers may stimulate the creation of early retirement vehicles in the future.

As Norway’s State Petroleum Fund has seen assets grow almost eight-fold over the past seven years, it is now realising the need to invest in new asset classes and is looking towards diversifying into alternative assets, writes Reeta Cevik.

Folkebørsen, the Danish electronic pension savings platform, is growing steadily after a cautious start. Indeed, the platform has even attracted interest from companies in Norway and Germany who are keen to

introduce similar systems to service their members.

Nordic pension and insurance firms have high hopes for their emerging markets investments over the next six months, with present global conditions and high commodity prices driving optimism. However, despite the majority agreeing that EM bonds would be the most interesting fixed income asset class, no one will be increasing their bond allocations. Marjolijn Roepers and Chris Newlands report.

In the ever-changing world of the Icelandic pensions industry, the Lífeyrissjódur Austurlands fund is sticking with its majority allocation to domestic bonds, at a time when the market’s future remains uncertain. Stephen Bouvier reports.

OP Bank Pension Fund, the mandatory scheme that covers employees of Finland’s OP Bank and its real estate operations, posted a return of 8.9 per cent in 2004 for assets totalling €830m.

nrpn spoke to four Danish investors about their current and future concerns.

SRI has developed beyond simple ethical investing. Indeed, increased public pressure and good returns have motivated pension funds to re-think their investment policies. However, can they compete with the ‘sin’ stocks on the international stage? Hugh Greenlagh investigates.

Delays in the implementation of the pan-European occupational pension fund directive (2003/41/EC) have received a mixed response from the European Parliament Committee on Economic and Monetary Affairs (ECON).

Dominic Delaforce, co-head of Liability Driven Investment EMEA at Aberdeen Asset Management, outlines how the often prohibitive costs of moving to LDI for smaller companies can be offset by appropriately structured pooled fund investments.

Anthony Biddulph, senior relationship manager for the Nordic region at Merrill Lynch Investment Managers, looks at the benefits of focus portfolios for pension funds who have already decided to invest in equities – empowering fund managers to break free of the benchmark and exploit opportunities as and when they arise.

With the global economic upswing entering its third year, and two years of significant equity versus bond outperformance behind us, investors with balanced mandates face two interesting dilemmas: whether it is reasonable to expect equities to continue outperforming bonds and, if so, what the optimal allocation should be in a scenario of continuing global growth?

It was only weeks before the curtain was raised on 2005 that Isis Asset Management announced the completion of its merger with F&C.