Sampension to pile on more equities as higher-risk assets pay off

Danish labour-market pension fund Sampension has reported a 16.6% return on its traditional with-profits pensions for the first nine months of the year, and said it was likely to increase its equity exposure soon, believing share prices have further to rise.

In interim financial figures for the first three quarters of 2014, Sampension said the 16.6% return on traditional pensions had been helped in large part by the interest hedging result, and that the underlying investment portfolio had generated 3.7%.

No data were available for the comparable period in 2013, but, for the full year 2013, Sampension reported a 4.3% return for traditional pensions before interest rate hedging.

Hasse Jørgensen, Sampension’s chief executive, said: “We think there is still more to be gained on shares.”

Even though the market has recovered from significant falls in share prices in October, there is still further to go to reach the levels seen in the summer, he said.

“So it is likely we will make further share purchases in the coming period,” he said.

The development of Sampension’s capital base had been particularly solid and shows there is room for more capital-intensive investment for the benefit of customers, Jørgensen said.

Solvency coverage rose to 245% at the end of September from 221% at the end of December.

In absolute terms, Sampension’s total return for January to September 2014 was DKK19bn (€2.5bn), against DKK1.1bn in the same period the year before.

Sampension said investing in higher-risk assets had paid off in the period.

Quoted equities returned 13.5% in the nine-month period, private equity produced 17.2% and corporate bonds generated 8.6%.

Within the unit-link pensions side, Sampension said its ‘3 i 1 Livspension’ (3-in-1 Pension for Life) product had produced an average return of 7.4%.

For the full year 2013, the product returned 8.9%.

Total assets increased to DKK230bn from DKK195bn over the same time period.

Contributions, meanwhile, dipped to DKK5.8bn at the end of September from DKK5.9bn at the same point last year.