State Pension Fund earns 4.9 per cent return on investments

Preliminary information on return on investments in 2015

The return on the investments made by the State Pension Fund (VER) reached 4.9 per cent in 2015 (7.8% in 2014). Given the slightly negative rate of inflation, real return was  5.1 per cent (7.2% in 2014).

The average nominal return over the past five years is 5.5 per cent and real return 4.0 per cent. The average nominal return over the past ten years is 4.5 per cent and real return 2.7 per cent.

At the end of 2015, the market value of the VER’s assets amounted to EUR 17.9 billion (EUR 17.6 billion in 2014). Of the investments made by VER, fixed income instruments accounted for 49.0 per cent, equities for 43.1 per cent and other investments for 7.5 per cent of the total.

Of the various asset classes in VER’s portfolio, the best return was generated by private equity funds at 18.6 per cent. Of the large asset classes, listed equities yielded a return of 10.3 per cent and liquid fixed-income instruments 0.2 per cent.

• “All the asset classes invested in by VER in 2015 yielded a profit despite the highly volatile markets. In particular, the yields from private equity, infrastructure, real estate and private credit funds were good.Any return exceeding five per cent underpins the financial base of the state’s pension system,” says CEO Timo Viherkenttä.

Under a one-year exceptional law, VER was required to contribute an additional EUR 500 million to the 2015 government budget, which diminished the growth of VER’s investment assets.

The Financial Statements Bulletin for 2015 will be published on 29 February 2016.

Inquiries:

Timo Viherkenttä, CEO of the State Pension Fund, tel. +358 9 2515 7010

Established in 1990, the State Pension Fund (VER) is an off-budget fund through which the state prepares to finance future pensions and equalise pension expenditure. VER is an investment organisation responsible for investing the state’s pension assets professionally. At the end of 2015, the market value of the Fund’s investment portfolio stood at EUR 17.9 billion.

All the figures presented in this press release are preliminary and unaudited.