Largest Finnish pension companies experience asset and return growth

The asset values and average rate of return of the four largest occupational pension companies in Finland increased in the fourth quarter of 2023, according to the latest figures from the Finnish Pension Alliance (Tela).

During the quarter, the total investment assets of Elo, Ilmarinen, Varma and Veritas rose from €148.2bn to €152.5bn.

Their average return for the year to date also increased, from 3 per cent at the end of Q3 to 5.9 per cent at the end of Q4.

Equities remained the most popular asset class of the pension companies, making up 49.7 per cent of the total, a slight increase during the quarter, followed by fixed income assets, which remained at 27.4 per cent.

Other investments, such as hedge funds, fell slightly to 12.4 per cent of assets, while real estate investments decreased from an average of 11.4 per cent to 10.5 per cent.

Varma overtook Ilmarinen as the largest pension company by investment assets during the quarter, with Varma’s assets rising from €57.5bn to €59.1bn and Ilmarinen’s increasing from €57.7bn to €58.9bn.

Elo had €30bn worth of investment assets and Veritas had €4.4bn.

In 2023, equities provided the best average return with 9.2 per cent, followed by fixed income (7.1 per cent), other investments (4.1 per cent) and real estate (-7.4 per cent), according to Tela's statistics.

Elo and Varma had returns of 6 per cent over the year, while Ilmarinen had a return of 5.8 per cent and Veritas returned 5.7 per cent.

Tela’s statistics also included the Local Government Pension Fund (Keva) and the State Pension Fund (VER).

Keva had assets of €65.7bn and an average return of 6.8 per cent in 2023, and VER had assets of €22.8bn and a return of 7.7 per cent.

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