DENMARK - Danish labour-market pension fund PensionDanmark posted a pre-tax profit on investments of 7.5% in the first half of this year, due largely to gains on bonds and tactical risk management.

Since the end of the reporting period, profit has risen further, the fund said, with the figure hitting 12% at the end of August.

In absolute terms, profit on investments for the first half 2010 was DKK6.5bn (€873m), up from profit in the year-earlier period of DKK3.4bn.

Total assets rose to DKK98.4bn at the end of June from DKK78.5bn 12 months before.

Torben Möger Pedersen, managing director, described the result as most satisfactory given the difficult market conditions.

"In particular, investments in bonds and the tactical management of the interest-rate risk in the portfolio have, as a result of the fall in yields, contributed positively to profits," he said.

"But our investments in private equity, as well as corporate and emerging market bonds, have also made a positive contribution."

Meanwhile, PFA Pension, a commercial pension fund that is also customer-owned, saw pre-tax profit on investments for its holding company at 7.7%, or DKK18.4bn in absolute terms, up more than DKK16bn compared with the year-earlier period.

PFA Pension said its profit on equities (7.9%), bonds (9.7%) and property (5.2%) lay behind the positive result, and that interest-rate hedging had also contributed well to profit.

Administrative costs had fallen to 3.7% in the first half from 6.7% in 2009, with part of this fall due to a one-off consumption tax rebate.

Total assets rose by DKK25bn to DKK277bn at the end of June from the end of 2009.

Among other pension funds to report, labour market scheme Industriens Pension reported a 14.5% rise in profit at the half-year stage, citing rising Danish equity prices and falling interest rates as the most important reason for the profit growth.

The result boosted total assets by DKK14bn to DKK89.6bn in the first six months of this year.

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