Bilag 07
Dette er den
"tilstrækkeligt gode" tekst som virksomheden Danish Pension A/S i uge
30/2004 efter aftale valgte med en journalist valgte at sende afsted til et engelsk
fagtidskrift indenfor pensions- og forsikringsområdet. Papirets funktion var at
give stof til journalistens arbejde med at skrive et indlæg til et tidsskriftet
journalisten er ansat på.
The
Copenhagen-based Danish Pensions A/S was formed just over twenty years ago, in
a pioneering venture move by two big players in the Danish labour market; N/A
A, on the employer side and N/A B, a grouping of unions. It embraces N/A
thousand members in N/A businesses across the country and the scheme is
mandatory.
Fifteen years ago it had
contribution inflows of DKK N/Am (USD N/Am) and funds of DKK N/Am at year-end,
or a bit less when life cover costs are deducted. Currently the expected income
is DKK N/Abn (USD N/Abn) and assets at DKK N/Abn (USD N/Abn). “This build up is
possible due to the low average age of members, at N/A years”.
Contributions will raise
from the present N/A% to N/A% in mid 2006. By a contribution of N/A% the yearly
expected income will be around DKK N/Abn (USD N/Abn).
DP investment philosophy is
to increase its long-term yield on investments by following an investment
strategy which focus on high yield asset classes and correlated high risk. This
more extensive exposure will at present primarily be formed by equity
investments, though corporate bonds and emerging markets bonds is included as
well.
The funds overall risk ratio
will be reduced through diversification on different asset classes.
The opportunities for risk
management will be subject to an ongoing process of analysis to provide for
estimates of the yield of investments held against the risk derived from
implementing new types of assets in the portfolio. The risk budget, an
estimation of the fund’s overall risk profile is determined through the
investment policies.
It is DP’s opinion that the
risk will decrease not only through diversification on asset classes but also
through collaborative activities with a variety of portfolio managers. By a
considerate and careful selection of portfolio managers within each asset class
thus deriving/promoting a contemplative effect from the investment practice and
style of each member within the chosen group of portfolio managers.
Some of the portfolio
managers invest globally thus gaining great opportunities from tactical
geographical positions, whilst others cover a certain geographical area whereby
these will profit from their in-depth knowledge of this particular market. In
general, each type of manager bring about a different return, hence Industriens
Pensionsforsikring has chosen to use both types in a structure that
additionally deliver opportunities for holding/being a neutral geographical position
or to hold/be overweighed versus low-weighed within a certain/chosen
geographical area.
A table showing the
development of investment "Asset Class" - Omitted in this working
paper (for confidentiality reasons!).
During 2001 the portfolio’s
risk ration was downsized by reducing of the share of equities; from N/A% in
2000 down to N/A % in 2002.
This meant that the optimum
strategy for DP with global as well as regional managers was deferred.
DP decided in 2003 to
increase its share of equities again. In October 2003 DP appointed AXA
Rosenberg as managers of US small cap (USD N/Am) and Invesco as managers of US
large cap (USD N/Am).
DP has just recently, in
July 2004, engaged State Street to be the managers of Japanese equities (UDD
N/Am), whereby the circle of regional managers meets its end. DP was already
involved with Pictet in the field of global emerging markets equities and with
Capital on European equities.
During the period 2000
through 2003 the exposure to emerging markets bonds and high yield corporate
bonds was increased. In June 2004 Pareto was engaged to manage high yield
corporate bonds (USD N/Am). DP had already T. Rowe Price managing high yield
corporate bonds and Morgan Stanley managing emerging markets bonds.
Well
over a year ago Industriens Pensionsforsikring decided, as with quoted
equities, to increase substantially its exposure to private equities after
having harvested their primary experiences within this field during the years
2000 through 2002.
DP’s
has as present invested approximately N/A % of its assets in private equities.
It is DP’s aim to reach at least N/A% within the next year and N/A% within a
period of 3 to 4 years. It will take some time to build up a private equity
scheme, as investments are likely to be made over a period of 3 to 5 years after
a pledge of investment has been given.
DP
has articulated the following goals for its investments in private equity: The
table is omitted in this working paper for confidentiality reasons.
The
allocation of investments within a given year can diverge from the long-term
strategy. This will depend on the quality of the funds on offer and of how well
these funds match DP’s present portfolio.
The pool of private equities
are solely operated through fund of funds or investment companies and will not
be directly invested in the actual company.
DP
has decided to carry out the screening and selection of the main part of the
Danish and European funds to meet their investments.
Within
the last 12 months DP’s commitment to make investments amounts to a total of
DKK N/Abn (USD N/Abn), on a divisional basis between 8 companies of which 3 are
Danish funds:
Nordic
Mezzanine II; commitment DKK N/Am (USD N/Am). Nordic Mezzanine offers mezzanine
loans, primarily to Nordic enterprises.
Industri
Udvikling II; commitment DKK N/Am (USD N/Am). Industri Udvikling is a Danish
buyout fund, which invests in small and medium sized companies.
INCUBA
Venture; commitment DKK N/Am (USD N/Am). INCUBA is a Danish venture fund, which
invests in new, promising business in the field of IT and biotechnology.
Crown
European Buyout Opportunities; commitment DKK N/Am (USD N/Am). CEBO is a specialized
fund of funds primarily investing in small and medium seized European buyout
funds. These funds will often only operate domestically within a certain
country and will have to maintain a comprehensive pool of knowledge about local
affairs and conditions, e.g. language, national legislation, etc. Crown is
administered by the LGT Bank, which was originally founded in
Switzerland/Lichtenstein.
It
is DP’s intention to decide which of the big regional or Pan-European buyout funds
to invest in, whilst LGT/Crown will be trusted with the task to find a number
of smaller funds of interest.
EQT
IV; commitment DKK N/Am (USD N/Am). EQT IV is a North European buyout fund
primarily operating in the Nordic Countries and Germany. The funds premises are
situated in Stockholm, but there are branch offices in a number of other
cities, e.g. Copenhagen.
Paul
Capital VIII; commitment DKK N/Am (USD N/Am). Paul Capital is a so called
secondary fund, i.e. a fund whose activities is focused on investments made in
what is commonly phrased as “used funds” with an investor wanting to cop out of
an engagement.
Further
to this, DP has pledged to make investments in two additional funds. There are
some details with these agreements that remain pending and therefore cannot be
published.
DP
expects to make further commitments for a total of DKK N/Abn (USD N/Am) p.a. in
the years ahead.