EQUITIES BOOST ILMARINEN'S INVESTMENT RETURNS TO 6.5 PER CENT
The return on Ilmarinen’s investment portfolio for 1 January–30 September 2013 was 6.5 per cent, i.e. EUR 1.9 billion (5.3 per cent, i.e. EUR 1.5 billion on 30 September 2012). At the end of September, the market value of investment assets totalled EUR 31.5 (29.1) billion.
Ilmarinen’s Interim Report 1 January to 30 September 2013
“The positive investment return is based on listed equities, which developed positively in nearly all of the markets in July-September and yielded extremely well. The uncertainty hanging over the interest rate markets also dissipated,” explains Timo Ritakallio, Deputy CEO, Chief Investment Officer.
Ilmarinen’s equity investments returned 14.1 (6.2) per cent, with returns on listed equities standing at 14.6 (5.8) per cent. The return on direct real estate investments was 3.7 (4.2) per cent and 3.2 (4.9) per cent on fixed income investments.
“We were successful in achieving a clearly positive result for our fixed income investments, even in these challenging interest rate market conditions. This proves that our investment strategy is still functioning successfully,” says Ritakallio.
Long-term real return 3.9 per cent
Ilmarinen’s long-term investment return since the start of 1997 has risen to its highest level since the 2008 financial crisis, with the real return standing at 3.9 per cent. The Finnish Centre for Pensions uses a 3.5 per cent expected real return rate to estimate the future development of earnings-related pension insurance contributions.
Ilmarinen’s solvency strengthened. At the end of September, Ilmarinen’s solvency capital was EUR 6.5 (5.4) billion, which is 25.8 (22.8) per cent of the technical provisions and 1.9 (2.2) times the solvency limit.
Ilmarinen achieved excellent results in the sale of pension insurance during the third quarter.
“In recent years we have been even more goal-oriented in developing our services and we believe that this work is now bearing fruit. Both current and new customers appear to trust Ilmarinen as an earnings-related pension company,” says Ritakallio.
“Overall promising outlook for global economy”
According to Ritakallio, next year also looks good from the investor’s point of view.
“The overall outlook for the global economy is promising. The United States economy is recovering and China’s growth is maintaining its good level. Europe is climbing out of the downturn and the Finnish economy is slowly showing signs of improvement. The global economy will be growing at a speed of 3.5 per cent next year,” he predicts.
Ritakallio also has a few words to say concerning the on-going discussion on remunerations in listed companies.
“In our opinion, due to the present economic situation, there is strong cause to refrain from raising the remuneration paid to the members of the boards of listed companies during next spring’s annual general meetings. The salaries and remuneration systems for the operative management of listed companies are decided by the companies’ boards; Ilmarinen’s task as the owner of listed companies is to ensure that the companies we own have the best possible boards that make wise decisions,” Ritakallio says.
At the end of September, Ilmarinen held shares in 81 Finnish listed companies.
For further information, please contact:
Timo Ritakallio, Deputy CEO, Chief Investment Officer, tel. +358 10 284 3838, +358 500 536 346 Päivi Sihvola, Senior Vice President, Corporate Communications and Human Resources, tel. +358 10 284 3590, +358 040 757 4992
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