annual report 2020 - Flipbook - Side 10
INDUSTRIENS PENSIONSFORSIKRING A/S ANNUAL REPORT 2020
RETURN FOR THE YEAR
The result on investment activities was DKK 9.7
bn. after costs and before tax in 2020. This
corresponds to a total investment return for the
year of 5.1%. The return before costs was 5.8%.
Listed and unlisted shares had a particularly
positive effect on returns, with Danish shares
delivering the highest returns. Other unlisted
investments, particularly in infrastructure, could
not keep up with developments in the share
Following substantial COVID-19-related falls in
spring, stock markets generally rose in 2020
due to extensive real-economic aid packages in
the US and Europe, rapid decisions to cut
interest rates in the US, extended bond
purchase programmes by central banks,
expectations for successful roll-out of
vaccination programmes, and the election of
President Biden and the Democratic Party.
Listed shares and credit bolstered returns
On the listed share markets, in which Industriens
Pension has invested DKK 57 bn., returns on
Danish shares were 23%, while foreign shares
saw returns of 12%.
Investment-grade bonds (DKK 11 bn.), and highyield bonds (DKK 11 bn.) were positively affected
by interest-rate cuts and central bank
purchasing and yielded a return of 5.7% and
5.0%, respectively, while the return from
emerging-markets bonds (DKK 16 bn.) was -1,4%.
The negative return was due to continued
uncertainty as to how lower growth will affect
countries with poorer credit ratings in a situation
when activity is still affected by COVID-19.
Gilt-edged bonds (DKK 40 bn.) yielded a positive
return of 2.4%.
Strategic hedging of the inflation risk had a
negative impact on returns for the year due to
expectations of lower inflation in Europe. This
had an impact of -0.5% on total returns for the
Relevant 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.
The performance of listed Danish shares was
lower than the benchmark, while other listed
assets performed better than the benchmark.
For unlisted investments, a number of other
references are used to assess the returns on the
individual classes of assets. Overall, the
performance of investment assets followed the
Major differences in returns on unlisted
The total portfolio of unlisted investments
amounts to DKK 59 bn. Investments are in
unlisted companies, infrastructure, property and
credit. The majority are unlisted companies (DKK
22 bn.) and infrastructure assets (DKK 17 bn.).
There were major differences in returns on
unlisted assets in 2020. Private equity (unlisted
companies) and Danish properties delivered
reasonable positive returns of 10.0% and 3.8%,
respectively, while investments in infrastructure
and foreign property came out with negative
returns of -3.1% and -8.5%, respectively. The
negative returns were triggered by the COVID19-crisis, which led to impairment of a number of
assets in the oil and gas transmission industry,
the transport sector and office and commercial
Total property investments in Denmark and
abroad (10 bn.) delivered a return of -2.9% due
to negative returns on foreign property. The
portfolio of Danish properties is still being
developed and it currently amounts DKK 5.5 bn.
Other credit (DKK 9 bn.) is investments through
funds that primarily focus on variable-interest
unlisted corporate loans. These investments
delivered a return of 2.9% in 2020.
The majority of the unlisted investments are
made through funds and co-investments with
Returns on assets 2020
Corporate bonds, high yield
Bonds, emerging markets
Bonds, investment grade
Total, including hedging of liabilities