Eeva Grannenfelt, CIO at the company, told nrpn that hedge funds would form a notable part of Fennia’s alternative investments in the future. “Our long-term goal is to have a portfolio, which includes approximately 40 per cent in equities, 40 per cent in fixed income investments and 20 per cent in alternative assets including property,” she said.

“In the short term, we are going to increase our hedge fund investments and reduce our exposure to fixed income. In the long term, we might also introduce private equity in our portfolio. At present our exposure to the asset class is very minor.”

In 2005, Pension Fennia increased its exposure to hedge funds from 1.5 per cent to 5 per cent. In 2006, its exposure to the asset class has increased slightly but is still clearly less than 10 per cent of the total portfolio.

Mrs Grannenfelt said: “From next year on new regulations will enable us to expand on the alternatives side.”

Fennia’s future plans also include expanding property holdings. “However, this is a long-term plan. For the moment our 10 per cent exposure to property will remain more or less the same,” Mrs Grannenfelt said.

Fennia is also observing the development of global equity markets. At present, global equities represent two thirds of the fund’s equity portfolio. “Diversifying our investments globally, and, for example, in Russia, also strengthens the Finnish economy. Investing in Finnish companies that have entered the Russian markets also domestic growth. There are also interesting growth opportunities in China with the country’s recent consumer trend,” Mrs Grannenfelt explains.

Fennia’s portfolio currently consists of equities (30 per cent), bonds (45 per cent) and property (10 per cent, cash (10 per cent), hedge funds (5 per cent). In 2005, Fennia’s investments yielded a total return of 11.8 per cent.
RC

Printer friendly version

Email this article to a friend