Tiedote 23.4.2013

INVESTMENT YEAR OFF TO A GOOD START: RETURNS AT 2.0 PER CENT

The return on Ilmarinen’s investment portfolio during the first quarter of 2013 was 2.0 per cent, i.e. approximately EUR 600 million (5.1 per cent, i.e. EUR 1.4 billion on 31 March 2012). The market value of Ilmarinen’s investments exceeded, for the first time, EUR 30 billion, totalling EUR 30.4 (29.1) billion at the end of March.

“The favourable development of Ilmarinen’s investment returns has continued in the early part of the year. This primarily results from the positive development in the global equity markets,” explains Deputy CEO Timo Ritakallio.

American, Asian and Nordic equity investments generated particularly high returns.

Ilmarinen’s long-term investment return also remained on a good level, the real return on investments since 1997 equalling 3.7 per cent. The Finnish Centre for Pensions uses a 3.5 per cent expected real return rate to estimate the future development of earnings-related pension insurance contributions.

“Pension investment operations are carried out on a long-term basis, and it is therefore important to examine pension returns over a 25-year horizon rather than over a single quarter,” Ritakallio points out.

As far as the investment outlook is concerned, Ritakallio says the situation in the equity markets looks fairly bright in the longer term. In the short term, on the contrary, the persistence of the eurozone debt crisis and the economic downturn in particular are causing concern.

“But, even though Finland’s and Europe’s economies are struggling at the moment, the short-term return outlook for pension investments remains quite good and future pensions are secure.

Ilmarinen’s solvency stood at a good level. At the end of March, Ilmarinen’s solvency capital equalled EUR 5.9 (5.8) billion. This was 24.2 (24.8) per cent of the technical provisions and 1.7 times (2.2) the solvency limit. The new act on the solvency of pension insurance companies entered into force at the beginning of 2013. The new act barely affected Ilmarinen’s solvency compared to the solvency calculated based on the temporary legislation.

The weight of Finnish shares still high in the equity portfolio

Ilmarinen somewhat changed the geographical weightings in its equity portfolio early in the year. The proportion of Finnish equity investments decreased while investments in other Nordic equities increased. However, the proportion of listed Finnish companies’ shares still remained high, at 31 per cent. Ilmarinen’s shareholding in listed Finnish companies amounts to EUR 2,9 billion.

All in all, 36 per cent of the pension assets managed by Ilmarinen, i.e. EUR 10.5 billion, were invested, in one form or another, in Finnish society at the end of March.

 (The figures in this release are unaudited.)

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For more information, please contact:

Timo Ritakallio, Deputy CEO, Head of Investments, tel. +358 10 284 3838, +358 500 536 346
Jaakko Kiander, Senior Vice President, Finance and Pension Policy, tel. +358 10 284 2599, +358 50 583 8599
Päivi Sihvola, Senior Vice President, Corporate Communications and Human Resources, tel. +358 10 284 3590, +358 040 757 4992