ATP posts 19% drop in PE returns

The decline can be attributed to a bumper year for ATP's private equity portfolio in 2016, a spokesman for the firm told PEI.

Danish pension ATP Group reported a 19 percent fall in its private equity returns last year, according to its latest results.

The country’s largest pension fund earned a Dkr5.3 billion ($871.3 million; €712.2 million) return across its private equity portfolio in 2017, down from DKr6.6 billion the previous year. The portfolio was valued at DKr34.7 billion as of 30 June, according to its H1 2017 results.

The decline can be attributed to a bumper year for ATP’s private equity portfolio in 2016, a spokesman for the firm told PEI. Its performance that year was driven in part by a partial exit from payments firm Nets, which it acquired as part of a consortium together with Advent International and Bain Capital in 2014.

ATP’s overall investment portfolio generated a DKr29.7 billion return before tax and expenses last year, almost double the DKr8.5 billion and DKr15.3 billion recorded in 2015 and 2016 respectively. Private equity represented ATP’s largest source of returns, followed by listed international equities at DKr4.9 billion and listed Danish equities at DKr4.2 billion.

It attributed the performance to strong returns on equities as a result of price increases in global equity markets and moderate interest rate increases in Europe.

“We achieved an exceptionally solid return in 2017 and generated the best investment return in many years,” chief executive Christian Hyldahl said in a statement. “The strong performance is due to positive contributions from virtually all asset classes, which has made it possible to increase pensions for all members.”

The pension’s supervisory board has now raised its long-term investment performance target in an attempt to preserve the real value of pensions as well as possible, according to the report. The performance target will be equivalent to DKr12.9 billion in 2018, up from DKr7 billion last year.

Its overall assets grew to DKr768.6 billion in 2017, up from DKr759.3 billion the previous year.