ATP, Hilleroed, Denmark returned 15%, or 15.3 billion Danish kroner ($2.2 billion), on its investment portfolio in 2016, buoyed by private equity and credit allocations.
The pension fund returned 17.2% in 2015. Assets increased 7.6% over the year to 759 billion kroner, said a financial update Wednesday.
Private equity investments contributed 6.6 billion kroner, and credit added 3.8 billion kroner. Real estate investments returned 2.1 billion kroner, and government bonds and Danish equities each returned 1.4 billion kroner.
Commodities contributed 998 million kroner, infrastructure added 691 million kroner, and inflation exposure added a further 87 million to investment returns.
International equity exposure lost 158 million kroner, while ATP's long-term inflation hedge lost 1.2 billion kroner. Other exposures lost 330 million kroner. Allocations could not be learned by press time.
Christian Hyldahl, CEO of ATP, said in a telephone interview that investment returns were strong, highlighting that about one-third of returns came from the pension fund's private equity allocation and two transactions within that portfolio.
Mr. Hyldahl added that over the past couple of years and continuing this year, “we are internalizing quite a lot of investments,” and making more co-investments and direct investments in illiquid assets“to make sure (we are) efficiently taking down costs on the investment portfolio, but also to have a bit of grip on the risk management.”