Having already brought the vast majority of its assets in-house over the past five years, ATP, Denmark’s $107 bn pension and social security fund, plans to further cut the number of external fund managers it uses, according to the Financial Times.
The fund already manages around 85 percent of its assets in-house, with Carsten Stendevad, ATP chief executive, telling the paper that this will continue to ‘creep upwards’ in the coming months.
Speaking to IR Magazine, Stendevad says the fund has ‘no specific targets for the future’ when it comes to levels of assets managed either in-house or externally, but he does outline the reasons for this shift. ‘We have reduced the amount of external mandates in order to enhance our ability to steer our portfolio actively, to better understand the risk we have in our portfolio and finally to curb costs.’
While he adds that ATP doesn’t think in terms of active or passive investments, the FT reports that the fund is keen to make more direct investments, citing a $500 mn investment in Danish state enterprise Dong Energy, as well as $1.6 bn of property acquisitions across Denmark, Belgium, Germany and the UK.
Talking about the fund’s approach to investing, Stendevad tells IR Magazine that ‘[ATP is] an active investor across asset classes, sometimes in specific securities, sometimes in indexes, sometimes in cash, sometimes in synthetics.
‘Our equity holdings, for example, consist of three very different categories: global private equity (funds and direct investments); long-only fundamental Danish equities; [and] a global index portfolio – as well as various alternative risk premia in the equity space.’
While ATP may be looking to increase control of its assets and better understand the risks in its portfolio, Stendevad tells the FT that the fund is unlikely to take all of its assets in-house. ‘We recognize there are areas where we cannot build in-house expertise and where we want our money to be managed by the best investors in the world,’ he says.
The news follows a number of reports in recent months of pension funds, sovereign wealth funds and other large asset holders pulling assets from external managers.
