FINLAND - Finnish occupational pension funds returned an average 19% on investments in 2009 thanks to the equity rally, and clawed back the 14% loss suffered in 2008.

The average equity allocation among Finnish funds is now 48%, back at levels seen before the financial and economic crisis and 15% higher than at the end of 2008, according to the Finnish Pension Alliance, Tela.

The 19% return generated gains of approximately €20bn for Finnish pension funds, so the total assets of the Finnish occupational pensions industry now stands at €125bn.

The equity allocation as described by Tela includes investment funds, hedge funds and private equity. Listed equities in the pension fund portfolio returned 60% in investments - a sizeable return as pension funds had an average allocation of 30% to this asset class.

Hedge fund investments amounted to €5.2bn but were worth just 4.2% of the average portfolio, compared with 5% at the end of 2008.

Fixed income investment holdings totalled 37% of asset allocation, compared with 41% at the end of 2008.

And the monetary value of real estate investments increased by €700m. However, the total allocation held fell to 11%, compared with 12.5% in 2008.

In Finland, pension fund member have the right to borrow from contributions paid in to a pension plan - also know as loans to members. The use of this facility increased by another €2bn to a total of €5bn, or over 6% of total assets.

Allocation to Finnish investments decreased to 34.7% of total assets, down from 36% at the end of 2008.

Investments within the Euro-zone totalled 31.6%, compared with 32% last year, while investments outside the eurozone increased to 33.7%.

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