Annual Report IPF 2021 - Flipbook - Side 10
INDUSTRIENS PENSIONSFORSIKRING A/S
ANNUAL REPORT 2021
Investment activities
Return for the year
The result on investment activities was DKK 33.5
bn. after costs and before tax in 2021. This
corresponds to a total investment return for the
year of 16.8%. The return before costs was 17.5%,
boosted in particular by unlisted shares.
Global growth was high in 2021 and support for
economies and financial markets continued
through relaxed economic and monetary policies
following the corona pandemic. Expectations for
companies’ earnings increased, and this fuelled
share markets. On the other hand, expectations of
rising inflation impacted bond markets negatively,
even though short-term interest rates remained
low generally and even negative in Europe.
Shares bolstered returns
On the listed share markets, in which Industriens
Pension has invested DKK 75 bn., returns on
Danish shares were 20.6%, while foreign shares
saw returns of 18.4%.
Investment-grade bonds (DKK 9 bn.) were
negatively affected by interest-rate increases,
particularly in the USA, and with a return of -2.2%.
High-yield bonds (DKK 13 bn.) were positively
affected by falling credit spread and yielded a
return of 5.4%, while the return from emergingmarkets bonds (DKK 22 bn.) was -0.4% due to
interest-rate increases in the US, as a large
proportion of the bonds were issued in USD.
Gilt-edged bonds (DKK 28 bn.) yielded a return of 3.2%.
Strategic hedging of the inflation risk had a positive
impact on returns for the year due to expectations
of higher inflation in Europe. The contribution from
this was 2.5 percentage points of total returns for
the year.
Relevant listed benchmarks are used for listed
assets, and these are stated in the table. With
regard to unlisted investments, for which there are
no similar benchmarks, returns earned are applied.
For unlisted investments, a number of other
references/benchmarks are used to assess the
returns on the individual classes of assets.
The return for the year is 1.2 percentage points
below the benchmark. This is primarily attributable
to foreign shares because several major technology
companies have delivered very high returns, and
these companies have been underrepresented in
the Industriens Pension portfolio.
A good year for unlisted assets
The total portfolio of unlisted investments amounts
to DKK 75 bn. Investments are in unlisted
companies, infrastructure assets, property and
loans.
INVESTMENT ACTIVITIES
Most funds are invested in unlisted companies
(DKK 33.5 bn.) and infrastructure assets (DKK 19
bn.).
Investments in unlisted companies (private
equity) yielded an unusually high return of 66.1%
in 2021. The high return was driven by
investments in tech companies, primarily through
American venture funds, but it was also broadly
based geographically and across sectors.
Investments in infrastructure, which are both
through funds and through direct investments,
generated a total return of 13.1%, whereas
property investments yielded 5.6%, of which the
Danish portfolio generated 8.2%. This portfolio is
still under development and it currently amounts
to DKK 6.5 bn.
Table 7
Other credit (DKK 11.5 bn.) is investments through
funds that primarily focus on variable-interest
unlisted corporate loans. These investments yielded
a return of 11.8% in 2021.
The majority of the unlisted investments are through
funds and co-investments with these. However,
investments in Danish properties are direct
investments. The same applies for long-term
investments in a number of infrastructure assets
with stable and predictable cash flows. Investments
of this type are made with local partners.
Returns on assets 2021
Return (%)
Benchmark
Gilt-edged bonds
-3.2
-2.3
Other credit
11.8
-
5.4
3.7
Bonds, emerging markets
-0.4
-0.6
Bonds, investment grade
-2.2
-2.0
Shares, Danish
20.6
19.5
Shares, foreign
18.4
21.9
Unlisted shares
66.1
-
5.6
-
Corporate bonds, high yield
Properties
Infrastructure
13.1
-
Total
17.2
18.3
Total, including hedging of liabilities
16.8
18.0
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