Oslo pension fund capitalises on infrastructure pricing with 26% return

Oslo Pensjonsforsikring (OPF) reaped returns of 26.5% on its infrastructure investments in the first nine months of the year.

Norway’s largest independent municipal pension fund, which is invested in maturing infrastructure funds, has benefitted from competitive pricing in the market.

Åmund Lunde, OPF chief executive, told IPE Real Assets that “an important reason” for the high returns “is that some of the funds we have invested in are maturing, and selling their assets at higher prices than expected”.

He said OPF will plough the proceeds into new infrastructure funds. “Infrastructure investments have been very successful for OPF and we are investing in new and promising funds,” he said.

A third-quarter interim report showed that OPF’s total return for its ’common portfolio’ – which invests pension assets – for the nine-month period was 6.8%.

Lunde said: “We are very pleased with the return this year; several asset classes have produced excellent returns, especially public and private equities and infrastructure.”

Over the first nine months of 2017, OPF’s weighting to infrastructure rose from 2.5% to 2.8%.

Real estate generated a return of 7% over the same period, its allocation slipping from 19% to 18.4%.

Real assets — which include property, infrastructure and index-linked bonds — made up 23.2% of the common portfolio at the end of September.

Lunde said OPF was particularly happy with the real estate performance.

Asked whether the pension fund planned any changes to asset allocation, he said that, in broad terms, OPF was happy with its current allocation.

OPF’s total assets increased to NOK89.7bn (€9.47bn) at the end of September from NOK83.1bn at the end of December 2016, with the common portfolio making up the bulk of this, at NOK80.1bn.

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