Denmark's Largest Pension Lays Off Bonds From Indebted EU Nations

(January 6, 2011) — Danish fund ATP has said it will avoid government bonds issued by the European Union’s most indebted nations, according to the CEO of the $73.4 billion Danish pension fund.

“When we invest in government bonds, it’s absolutely critical for us that there can be no doubt that we’ll get our money back,” said Lars Rohde, chief executive officer at ATP, in an e-mailed reply to questions from Bloomberg. He added that consequently, the fund has completely avoided government debt issued by Greece and Ireland, with European government bond holdings only including Danish, German and, to a lesser degree, French bonds.

While Greece received a $146 billion loan from the EU and International Monetary Fund in May and will post a 7.4% budget deficit of gross domestic product, Ireland received an $110.6 billion rescue package and will post the biggest deficit this year in the EU at 10.3% of GDP, Bloomberg reported.

At the end of the third quarter, according to the fund’s quarterly report on October 28, ATP had a total investment portfolio of $70.3 billion and delivered a return on total assets of 5.7% in the first nine months.

In related news, two of Denmark’s largest pensions — the €14 billion PensionDanmark and ATP — are considering joint property and infrastructure deals, a decision that comes as schemes finalized a joint purchase of three department store buildings, representing the country’s largest real estate deal in 2010.