COPENHAGEN — Danish pension plans are eagerly — but carefully — renewing their commitment to equities by boosting their exposures as the markets start to make a comeback.
Among those increasing their equity allocations actively after taking refuge in bonds for the last few years are ATP and PFA. Officials at one other — Pen-Sam, Farum, the 42 billion kroner ($6.78 billion) pension fund for medical support staff — would like to increase its equities exposure but does not have enough reserves to take more risk into its portfolio, said Michael Weischer, investment manager.
Many Danish pension plans dramatically cut their exposure to equities following regulatory changes two years ago by the Finanstilsynet, the Danish financial supervisory authority, which set up a system to monitor how close plans come to being able to cover their liabilities.
ATP, Hilleroed, the 276.4 billion kroner pension fund for the Danish labor market, is increasing its equity exposure to 20% from 15% of total assets this year. (Currently, domestic equities stands at 10.6% and foreign equities re at 4.8%.) Its long-term goal is to increase equities to 40% over the next several years, said Helle Holm Madsen, deputy chief investment officer. The fund's overall asset allocation is 79.7% bonds, 15.4% equities and the remainder in other assets, including real estate and private equity.