Amid growing trade relations hostility between the US and Europe, Denmark’s pensions lobby has justified the heavy levels of investment by its members in the US, and said that balance could shift were the European Union to improve the framework for growth investments closer to home.
Kent Damsgaard, chief executive officer of Insurance & Pension Denmark (IPD), said: “We have seen a significant shift in the weighting of pension companies’ investments, which means that the US is now the second-largest investment area after Denmark – a place that was previously reserved for Europe.
“And this shift is due solely to the fact that the conditions for a good return have been better in the US,” Damsgaard said on Wednesday.
IPD said the sharp rises in US stock prices in recent years had contributed to the fact that currently a quarter of Danish pension savings are now invested in the US.
“This picture could change if the growth opportunities and framework were in place for investments in Europe,” the pensions industry association said.
IPD said its analysis of the US market showed that DKK100,000 (€13,401) invested on the US exchange Nasdaq back in 2010 would have grown to DKK821,000 today. In comparison, the same sum invested in the European stock index would only have grown to approximately DKK219,000, it said.
“It is not for no reason that our industry has orientated itself more on the other side of the Atlantic,” said Damsgaard.
“Over the past 10 years, the US has been strong in the competition for investments, and there is a huge amount of work ahead to reverse this development,” he added.
But the CEO said there were now strong signals coming from the EU and member states.
“There has been a much-needed focus in the EU on ensuring Europe’s competitiveness, and this is vital to attracting the necessary investments,” he said.
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