“We are aiming to have 10 per cent of our investments held in alternatives within the next two years, most of which will come from new money but some of which will be redirected from our fixed income holdings,” Timo Löyttyniemi, managing director of the State Pension Fund, told nrpn.

On average we have received €300m to €400m from the state over the last five years, Mr Löyttyniemi added, “but before the end of this year the government will put €930m of extra money into our fund and another €800m in 2007”.

At the same time, Mr Löyttyniemi said that the fund is in the process of hiring an extra member of staff to manage the selection of its alternative funds. This will bring its in-house team up to a full complement of 15 people, which includes three on the fixed income side, three on the equities side and six administrative staff.

Over the last three years the Finnish State Pension Fund has been the best performing fund in Finland but over the first six months of this year the fund pulled in returns of zero per cent. “The first quarter of this year was extremely good but the second quarter was a lousy one for all pension funds,” said Mr Löyttyniemi. “But at this moment in time we are happy with how things are going.”

The fund has 40 per cent of its asset invested in equities of which 75 per cent is invested internationally and 25 per cent is invested domestically. Fifty six per cent of the fund’s portfolio is invested in fixed income products.

CN

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