IPF årsrapport 2018 (eng) - Flipbook - Side 9
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Other credit (DKK 2.5 bn.) is investments through
funds that primarily focus on variable-interest
unlisted corporate loans, and these also gave a
good positive return of 4.3%.
The majority of the unlisted investments are made
through funds and co-investments with these.
However, investments in Danish properties are
direct investments. The same applies for longterm investments in a number of infrastructure
assets with stable and predictable cash flows.
Investments of this type are carried out in
collaboration with local partners who help identify,
measure, monitor, and manage current risks in
such investments.
Positive returns over 10 years
A return of -1.0% in 2018 meant that, for the first
time in 16 years, Industriens Pension saw a
negative return. Over the past 10 years, the
average annual return has been 8.9%.
Historically, this has secured members some of
the highest returns in the sector. The strong
historical returns yielded by the market since the
financial crisis ended in 2018, and we expect
lower returns in the future.
Figure 1 Returns before tax for the past 10
years
18.9%
14.8%
12.9%
11.0%
8.2%
6.7%
8.2%
6.7%
4.2%
-1.0%
Investment costs
Investment costs were 0.69% of assets in 2018,
which is 0.06% lower than in 2017. Investment
costs vary considerably across classes of assets,
and they are highest for unlisted investments.
Investment costs are deducted in the return for the
year at -1.0%.
Table 8
Investment costs in 2018 by types
of assets
Asset type
DKK mill.
%
Gilt-edged bonds
30.1
0.08
Other credit
33.5
0.02
Bonds, investment grade
31.0
0.31
High-yield corporate bonds
38.5
0.35
Bonds, emerging markets
71.0
0.49
Shares, Danish
33.4
0.31
Shares, foreign
154.6
0.46
Unlisted shares
419.6
2.47
7.2
0.23
65.2
1.10
Properties (core)
Properties
Infrastructure (core)
Infrastructure
Other strategies
Unallocated costs
17.3
0.28
218.7
1.80
1.8
1.10
14.7
-
Total investment costs
1,136.4
* As a percentage of average investment commitments
0.69
*
*
*
Industriens Pension has active portfolio
management, with a high proportion of unlisted
investments. This strategy entails relatively higher
costs than a strategy with passively managed,
listed assets. For Industriens Pension, this strategy
has historically resulted in higher returns, and this
continued in 2018.
INVESTMENT ASSETS
Investment assets valued for accounting purposes
rose from DKK 165 bn. at the end of 2017 to DKK
169 bn. at the end of 2018. If derivative financial
instruments with a negative value and debt to credit
institutions are included, net exposures in
investment assets amounted to DKK 165 bn. at the
end of 2018.