Danish Pension To Boost Hedge Fund Allocation

Mar 16 2007 | 12:29pm ET

In a move to offset weak local bond yields, PensionDanmark is increasing its hedge fund, infrastructure and senior bank debt exposures from 2.6% to 4%, according to its 2006 annual report.

Last year, assets under management for the now US$11 billion Danish pension plan grew 19%, up from US$9.2 billion. The system’s investment in private equity returned 14.1%, while that in hedge funds, infrastructure and senior secured debt returned 5.8%. The system’s overall return was 7%.

“More than half of PensionDanmark’s investments are in equity, private equity, high-yield bonds, real estate and alternative assets like hedge funds, infrastructure funds and senior bank debt,” said CEO, Torben Möger Pedersen. “This has significantly contributed to the solid investment return in a year when investments in Danish nominal bonds have yielded an only very modest return.”

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