The decline in inflation expectations and economic growth has seen Veritas receive its future returns in advance, the Finnish provider’s CIO has warned.

Niina Bergring nevertheless said Veritas Pension Insurance’s results were “especially good”, coming in at 6.4% across its holdings.

Its results were in line with two of the country’s other providers, Etera and Elo, which saw returns of 6.2% and 6.3%, respectively, over the course of 2014.

Bergring struck a note of caution, saying the yields were primarily the result of deteriorating economic conditions and inflation expectations.

“In the long term, this is not a positive thing, especially if the economic growth does not get a second wind in Europe or continue to remain at least moderate in the US and developing markets,” she said.

“We have, essentially, gotten our future returns in advance.”

Hanna Hiidenpalo, CIO of the €19.6bn Elo, also warned that 2015 would see returns fall short of the levels investors had grown accustomed to, with the mutual saying in a statement that the outlook for its native Finland was “very bleak […] and even bleaker than for the rest of the euro area on average”.

Hiidenpalo added: “Economic development and the investment environment involve an exceptionally large number of uncertainties, such as the actions of the US central bank the Fed, movements in oil prices, the state of the Chinese economy and the political developments in the euro area.”

Elo, completing its first full year since launching on back of a merger of LocalTapiola and Pension Fennia, said equities were its best-performing asset class, returning 9.8%.

It particularly praised its unlisted and private equity investments, which returned 26.8% and 18.9%.

The €5.7bn Etera saw full-year results for 2014 rebound from just 0.3% in 2013, with managing director Stefan Björkman highlighting its focus on Finnish holdings, where 40% of assets were invested.

“We invest in Finland especially through private equity and debt and real estate investments,” he said.

“Also last year, we made several new investments in Finnish growth companies.”

For her part, Bergring repeated praise for the recent intervention by the European Central Bank, expressing hope that the asset purchase programme would support growth.

“The ECB stimulus plan specifically supports this type of emerging growth in lending and is necessary in Europe’s current weak economic situation,” she said.

She previously told IPE she had been “disappointed” with Germany’s resistance to the ECB’s launching a quantitative easing programme.

For more of Niina Bergring’s outlook for 2015, read her thoughs in a recent issue of IPE magazine

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