The perpetual search for diversified sources of return is pushing Nordic pension and insurance funds into ‘quirky’ territory.

The €3.6bn Iceland State Employees’ Pension Fund (Lifeyrissjodur Stafsmanna Rikisins, or LSR) has set itself an ambitious €350m target for alternative asset class exposure.

Iceland’s National Association of Pension Funds would like to see the national regulator move to the prudent man principle for regulating pension funds’ investments.

Aberdeen Property Investors has put French offices and industrial property, and Swedish retail premises, at the top of its total return forecasts for 2007.

Norway’s €14bn domestic investment fund is seeking bids for an auditing services provider. The Government Pension Fund – Norway, formerly the National Insurance Scheme, previously retained the state auditing office’s services.

AP 3, the €24.3bn Swedish national pension buffer fund, has made its first commitments to indirect international property. The fund has until now only invested in property through the AP-funds’ co-owned property firm AP Fastigheter.

“In time, our aim is to have the property portfolio equally split between investments in Sweden and abroad. Geographically, we will start in Europe and Asia, and North America will follow,” said Bengt Hellström, head of alternative investments.

Credit Suisse is getting serious about the Nordic markets with the appointment of a specialist targeting the Nordic institutional markets, though it has stopped short of opening an office in the region.

Nordic pension and insurance funds are the most nervous they have ever been about world growth prospects, according to nrpn’s latest quarterly investor survey.

Apteekkien Eläkekassa, the €400m Finnish Pharmacy Pension Fund, is to appoint a manager to run almost half of its total assets. The tender is for 40 per cent of the fund’s portfolio, a mandate worth €175m that is equally divided between bonds and equities. SEB Gyllenberg has been the appointed manager for the last three years.

The new SAF-LO agreement, the pension plan for Swedish blue collar workers, has announced which companies will take part in the first part of the manager selection process.

Norwegian life insurance company Storebrand’s acquisition of Handelsbanken’s subsidiary SPP in Sweden is the first step in Storebrand’s expansion into the Nordic pensions market.

In spite of its tiny population, Iceland’s pension system boasts a number of multi-billion euro funds, which follow strict government investment guidelines. However, there are signs that the regulator may adopt a more tolerant attitude to risk, writes Thomas Escritt.

The AP funds are pushing the government for a reform of its investment regulations. The rules, which have been in place since 2000, are generally regarded as old-fashioned and narrow. The AP funds have so far been trying to opt for a change through talks with the government and parliament.

After half a decade trying to get to grips with interest rate derivatives, Danish pension funds are finally waking up to the prospect of more exotic alternatives, writes Thomas Escritt.

Since our quarterly survey began, Nordic investors have been largely buoyant about global growth prospects, particularly in emerging markets. Now, however, high levels of volatility have prompted renewed pessimism. Chris Newlands reports.

In a break from the traditionally conservative Swedish pension funds, Kåpan Pensioner – the fund for government employees – has ditched a large proportion of its bond holdings in favour of ‘quirky’ alternative allocations, including some outside of the established markets. Caroline Liinanki reports.

VR pension fund managed to post a solid performance in fairly difficult conditions. Its conservative outlook was also justified this year when its alternatives allocation failed to beat equities, writes Reeta Cevik.

nrpn spoke to four Finnish pension funds about how they are responding to their new flexible investment environment.

Alf Guldberg, head of Sweden’s pension fund support group, SIRP, criticises the government’s rigid traffic light system and shares his concerns about his members’ increased appetite for risk. Caroline Liinanki reports.

NRPN: What problems are Swedish investors facing at a European level?

AG: Solvency II, the EU project to create a risk-related solvency model, will definitely be the dominating issue in the industry for some time. The big question is whether pension funds will have the same regulation as the commercial life and insurance companies. However, we still do not know much about the time frame.

Wind, water, and wood: when it comes to seeking out alternative investments, Nordic investors are not afraid to push the boat out. Kristen Paech unveils how they are looking for viable, environmentally friendly options.

Some market commentators appear to shy away from active management, but, says Nick Philips, head of Nordic markets at Goldman Sachs Asset Management, there are good reasons for passive management, but there is also a strong case for active management with the right strategy and a talented management team.

Nordic institutional investors remain greatly interested in commodity investments, but now increasing demand is starting to undermine the returns available from passive allocations. Are there alternative approaches that can help investors prosper in this more challenging environment? Peter Leane of BlackRock investigates.

James Norman, global head of quantitative strategies product management group, New York and Ronhui Tao, head of quantitative strategies global macro and currency research, New York at Deutsche Asset Management reveal how new areas have opened up to global tactical asset allocation in the hunt for alpha, which will give it greater potential to post absolute returns.

David Scott from Scott & Scott Attorneys at Law, highlights some unfortunate realities of the securities market and how private class action can help restore marketplace integrity in the wake of industry scandals.