Danish pension plans Laegernes Pensionskasse, Dansk Ingeniorforenings Pensionskasse, and Pensionskassen for Juristernes og Okonomernes all of Copenhagen jointly hired T. Rowe Price Global Investment Services to manage a pooled global high-yield bond mandate with initial assets of 1.5 billion Danish krone ($180 million). Funding for the allocation, the plans first foray into corporate bonds, will come from the three funds domestic bond holdings; plan representatives would not provide amounts.
The 35 billion krone Laegernes Pensionskasse doctors fund will invest 1 billion krone, or 7% of its 45% fixed-income allocation, in corporate bonds, according to Claus Stampe, chief investment officer at the fund. The 21 billion krone Dansk Ingeniorforenings Pensionskasse engineers plan will invest about 2% of total assets in corporate bonds, said Soli Prethun, head of investments at the plan. The 18.5 billion krone Pensionskassen for Juristernes og Okonomernes, covering lawyers and economists, will allocate just less than 400 million Danish krone to corporate bonds, said CIO Erik Veedfald.
The move is part of an attempt by each plan to diversify its fixed-income portfolios, which have to date been dominated by Danish government bonds.