Danish pension fund to increase risk appetite, add alternative assets

On the 01/26/21 at 7:53AM
ATP, which has $150bn assets under management, seeks to optimise its business model, by taking more long-term investment risk and adding alternative assets to its portfolio.
Bo Foged, CEO, ATP

The state-backed pension fund, which was founded in 1964, said that with low interest rates set to prevail for several years to come, it should have the opportunity to invest more freely, by taking a long-term investment risk. As a part of this strategy, ATP will start adding alternative assets such as infrastructure and real estate to its portfolio. Bo Foged, CEO of ATP, announced at a press conference that the new strategy will help add about DKK 190bn ($31bn) to the portfolio over the next 30 years, reported Bloomberg.

Traditionally, the fund has allocated 80% of the premiums to a hedging portfolio that invests mostly in government bonds, while 20% is invested in riskier assets. The new model will change that as 25% of its hedging portfolio will go into riskier assets, according to Bloomberg.