ATP achieves a return of DKK 6.9bn in the first three quarters of 2018

“Our balanced investment portfolio has generated a stable return in a difficult period, and we are pleased with the contribution from the illiquid part of our portfolio. The return was mainly driven by private equity, real estate, infrastructure and listed Danish equities, whereas investments in US government bonds contributed negatively to the return. We continue to take risks based on a disciplined approach to both portfolio construction and risk management as a way of ensuring that we create satisfactory long-term results despite the low and uncertain return environment,” ATP CEO Christian Hyldahl says.

The previous five years have realised average investment portfolio returns of 3.8 per cent per quarter. Investment portfolio returns have been positive in 17 out of the last 20 quarters.

Hedging protects pension guarantees

Hedging of the guaranteed pensions is designed to ensure that members receive the pensions promised, regardless of whether interest rates rise or fall. Due to moderate declines in yields on Danish and European long-dated government bonds, the value of guaranteed pensions increased in the first three quarters. Similarly, the hedging portfolio produced a positive return. All in all, hedging activity results were negative by DKK 2.0bn, corresponding to less than 0.3 per cent of the guaranteed pensions. The hedging strategy was thus successful.

Profit for the period

The result for the first three quarters of the year before the life expectancy update totalled DKK 4.4bn. The long-term forecast of life expectancy was adjusted by DKK 20bn at the end of H1. Hence, the result for the first three quarters ended at DKK -15.6bn. The bonus potential – ATP’s reserves – was DKK 102bn at the end of Q3 2018, corresponding to a surplus of 15.1 per cent relative to the guaranteed pensions of DKK 677bn. ATP’s net assets amounted to DKK 779bn in total.