FINLAND - The local authority pension fund Keva has announced stable returns of 3.9% for the first half of the year, aided by solid performances from both its fixed-income and listed equity portfolios.

However, hedge funds performed less impressively, while the value of commodity investments decreased by over 11%.

Chief executive officer Merja Ailus said the result was satisfactory, especially when considering instabilities that "plagued" markets during between January and June.

Keva's overall assets increased from €24.8bn at the end of last year to €26.5bn, helped by solid returns from fixed income of 4.5%, as well as 3.0% growth from listed equities, which account for almost 86% of all investments.

However, equities fared less well during the second quarter of the year, following returns of 7.7% between January and March.

In fact, assets have only increased by around €300m, from €26.2bn, since March.

Investment director Ari Huotari was expecting continued unrest across capital markets for the remainder of the year.

"Anxiety over the possible stalling of budding economic growth overshadows markets. Furthermore, key governments and central banks already expended a significant amount of their resources during earlier phases of the economic crisis," he added.

However, the scheme's private equity investments offered strong returns of 12.7%, in contrast only 2.5% growth in real estate and 0.6% from hedge funds, as well as an 11.3% reduction in assets from commodity investments.

Private equity accounts for less than 4% of Keva's total assets, while hedge funds make up 1.6% of funds, with commodities commanding a less than 1% share. The remaining 7.7% of assets were invested in real estate, as well as real estate funds.

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