PE generates best returns for Industriens Pensionsforsikring

The Danish pension fund announced that its entire portfolio returned 0.6% for the same period. Private equity along with infrastructure (3.5%) have been the best performing asset classes, while investments in investment grade corporate bonds (-1.7%) and emerging bonds (-6.3%) had a negative drag on performance, resulting in modest positive results for the first six months of the year.

"We are pleased that after all, we managed to get through the six months with a modest positive return. Our investment strategy and diversified portfolio have shown their strength in a difficult period of great turmoil in the market", said CEO Laila Mortensen. She added that developments in the financial markets were characterised by concerns about a global trade war, uncertainty about Brexit and the high valuation of assets.

Industriens Pensionsforsikring currently has 10.6% of its portfolio invested in private equity as of June 2018, amounting to DKK 17.4bn. Laurits Harmer Lassen, head of press, said that the pension scheme has an ongoing need to re-invest in private equity in a bid to maintain this exposure. "At the same time our portfolio is growing gradually, and we will maintain our strong focus on private equity, credit and infrastructure," he added.

The pension scheme has recently committed to Highland Europe Technology Growth III and Northedge Capital SME Fund I. Other commitments include Marlin Equity V, Marlin Heritage Fund II and Marlin Heritage Europe Fund.

Peter Køhler Lindegaard, head of listed investments, said that Industriens Pension adheres to an ESG policy and applies ESG criteria to all investments in the portfolio, but does not invest for a specific ESG impact. However, a large part of the infrastructure investments are in environmentally friendly assets such as wind and solar farms.

Laurits Harmer Lassen said that the pension fund believes in the value of being an active and responsible investor. However, he added that the scheme isn't planning to disinvest totally from fossil fuels.

A study of the overall portfolio by the fund's external consultants showed the fund has a greener and more climate-friendly profile than the benchmark, mostly as a consequence of a pursuit to get the highest possible long-term risk-adjusted return.

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• Denmark