Finland’s pensions lobby has fielded calls for pension funds to invest more in domestic companies to support growth by emphasising that pension investors must stick to their strict criteria for evaluating any potential investments.
A general debate has been taking place recently via Finland’s media around ways to boost the home economy, following the report in mid-February of an officially commissioned working party on promoting sustainable growth, led by Risto Murto, the chief executive officer of pension insurance company Varma.
Mikko Koskinen, communications director of pensions alliance TELA, wrote in a commentary: “The current debate on investing pension assets in domestic growth companies comes at a time when the returns on the investment activities of pension companies, funds and foundations are increasingly being given importance in ensuring the sustainability of the entire system.”
“For this reason, pension insurers must carefully consider where they can get the best returns on their investments against the legally permitted risk,” he said.
So supporting the growth of domestic companies could not be done via a different process from investing other pension assets, Koskinen said on Tuesday.
“The relationship between risks and returns must also be balanced in these investments,” he said.
This spring’s discussion was not the first time earnings-related pension insurers had been expected to invest more of their funds domestically, he said, adding that in the past, targets had included Helsinki-listed companies as well as infrastructure.
“Today, earnings-related pension insurers still have domestic investments in all of the above-mentioned targets,” he said.
Proposals on spurring growth in Finland to come from Murto’s working group have included shifting the focus of state-owned investment company Tesi (Finnish Industry Investment) from investments in listed companies to unlisted growth companies, and the creation of a new domestic growth fund to support companies.
Several other European countries have in recent months been pushing for greater domestic growth, including Germany, the UK, and Italy.
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Rachel is IPE's Nordic correspondent.
She has long been a freelance writer, and over the years, has written for The Telegraph, The Independent, The Observer, AMWatch and elsewhere.
In 2001, Rachel's personal finance book Kickstart Your Money was published by John Wiley & Sons.View full Profile
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