Norway’s KLP has posted a 1.5% value-adjusted return on its investments in the first quarter of this year, saying Norwegian equities generated a 9.2% gain in the period, and real estate valuations increased to give a 0.9% return from this asset class.

In its interim report for January to March, the municipal pensions giant said the quarterly return corresponded to NOK4.7bn (€468m), and that total assets under management rose to NOK814bn at the end of March from NOK807bn at the end of 2020.

Among the main asset classes in its common portfolio, KLP reported that equities had performed the best in the reporting period, generating a 5% return, compared with loss of 15.6% in Q1 2020.

Short-term bonds was the asset class with the lowest return in the first quarter, ending with a 2.4% loss, although long-term and hold-to-maturity bonds – in which KLP has double the allocation – produced a 0.9% gain, the financial report showed.

Sverre Thornes, chief executive officer of KLP, said: “Healthy returns in the stock market made a strong contribution to KLP’s result in the first quarter.”

The pension provider said a key event in the first quarter had been the launch of its “KLP Pressure Tank” initiative to support Norwegian start-ups.

The project was “an intensive development process to qualify and develop business ideas and investment opportunities in the early phase,” KLP said.

It involves four programmes taking place in different locations around Norway, beginning in March, May, September and October, and is being led by management and investment firm CoFounder.

One or more of the early-stage businesses taking part in each programme may receive investment from KLP via CoFounder, according to KLP.

In the first quarter report, the mutual pension provider also commented on the competitive situation facing it in the municipal pensions market, saying that in 2020, “other private-sector operators entered the market for insured solutions in public-sector occupational pensions.”

The firm, which has long had a virtual monopoly in the sector, said: “One county municipality and several closed agreements moved away from KLP at the beginning of 2021.”

KLP put the total volume of the outflow at NOK8.4bn in the quarter, and said there had been no moves to KLP at the start of 2021.

The first quarter report also shows contributions dropped to NOK7bn from NOK7.1bn this time last year.

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