ATP, Hilleroed, Denmark, won't touch government bonds issued by the European Union's most indebted nations as it deems the risk too great, according to the CEO of the 418 billion Danish kroner ($73.4 billion) pension fund.
“We invest in government bonds in order to purchase interest-rate risk, whereby we try to avoid credit risk entirely,” said CEO Lars Rohde in an e-mailed reply to questions Wednesday. “This means that we for a long time have completely avoided government debt issued by Greece, Ireland and so forth; our European government bond holdings only include Danish, German and, to a lesser degree, French bonds.
“When we invest in government bonds, it's absolutely critical for us that there can be no doubt that we'll get our money back,” Mr. Rohde said.
ATP returned 5.7% on its investments in the first nine months of 2010, it said in its quarterly report on Oct. 28.
Greece, which received a €110 billion ($146 billion) loan from the EU and International Monetary Fund in May after it struggled to repay its debts, will this year post a 7.4% budget deficit of gross domestic product, compared with a 9.6% shortfall in 2010 and a 15.4% gap the previous year, the European Commission said on Nov. 29.
Ireland, which received an €85 billion rescue package last quarter, will this year post the widest deficit in the EU at 10.3% of GDP, following 2010's 32.3%, according to the commission.
The euro has declined 7% since a Nov. 4 high.
