(February 1, 2012) – The company that manages the assets for the Danish public sector workers recorded a return from its investment and hedging activities of 26%, amounting to DKK124.7 billion, the highest percentage gain ATP has ever made.
The ATP Group assets sat at just over DKK778 billion at the end of the year, up 2.5% in 12 months.
ATP divides its portfolios into two halves: one for return seeking assets, the other for hedging purposes.
In 2011, the investment portfolio produced an after-tax return of just over DKK14 billion. However, this is the lowest return the company has made since 2007 and failed to reach the target of DKK15 billion set by the ATP supervisory board.
Despite this Lars Rohde, Chief Executive of ATP, told aiCIO that the return was something to be ‘celebrated’.
Rohde said: “The investment portfolio had a challenging year, compared to previous years, but we still made 20% so it was quite a good result.”
ATP allocates its funds according to risk rather than asset class within its investment portfolio – Rohde said due to the market turmoil reducing this risk had been the key to good results.
He said: “The trick was to reduce overall risk. At the end of the first half we took out risk insurance on our equity portfolio through equity put options, for example. This meant the impact of volatile markets was minimal.”
Rohde said the fund’s exposure to interest rates also helped boost returns and that four out of five risk classes produced positive returns.
ATP’s hedging portfolio worked to nullify the effect of falling interest rates during the year. Over the year, the hedging portfolio produced a DKK107 billion return, more than double what was created last year.
For an in-depth profile of ATP CEO Lars Rohde see tomorrow’s aiCIO news alert.