Leif Hasager, chief investment officer at Bank//Pension, explains that SSgA was hired partly because its funds are being promoted by the Danish financial firm Jyske Invest. But he also likes SSgA’s risk-controlled approach and ability to deliver “consistent excess return over the benchmark”, which led to Bank//Pension awarding the firm a €120m global enhanced equity mandate. SSgA joins the fund’s other global stocks manager, Denmark-based BankInvest.
Even in the more exotic territory of emerging markets, where Bank//Pension has taken a daring position, investing 18 per cent of the portfolio in the asset class, the pension fund has put its trust in domestic fund managers. Emerging bonds are run by local players including BankInvest and Jyske Invest, while emerging equities are split between Danske Capital Finland and New York-based Eastern European and Russian specialist Firebird Management.
“We expect fairly attractive returns from emerging markets this year”, says Mr Hasager, who was hoping for 12 per cent from equities and 7.5 per cent from bonds. The pension fund’s returns for the past two years in emerging markets has been even more impressive, however, with equities bringing in 70 per cent and bonds 30 per cent. The fund’s overall return for last year was 9.9 per cent.
Bank//Pension’s 29 per cent allocation to high grade bonds is also run by Jyske, although a 14 per cent junk bonds portfolio at least is in the hands of foreign experts in the shape of four US managers.
