The Danish Doctors' Pension Fund (Lægernes Pension) is to divest DKK 1.5 of Chinese assets, following its decision to exclude China from its investment universe.

Lægernes Pension, which manages approximately DKK 125bn in pension assets for Danish doctors, has made the decision due to several factors that make investing in China less attractive.

“Lægernes Pension invests globally to achieve attractive returns and continuously assesses the risk/return ratio of investing in different parts of the world,” it explained.

“The Chinese economy faces a number of structural challenges. Among other things, China is facing a significant decline in the labour force, has a very high level of private debt and is currently challenged by a tough real estate market adjustment. In addition, growing geopolitical and trade tensions have increased the unpredictability of investing in China.”

The divestment initially applies to listed investments, which also includes investments in Macau and Hong Kong. The pension fund will also not make any new unlisted investments in China.

The pension fund highlighted that it continuously “analyses and balances the risk/return ratio in the investment portfolio” and has previously divested assets worth approximately DKK 1bn in Russia just before the country invaded Ukraine in February 2022.

It was, therefore, able to prevent large losses caused by the subsequent sanctions against Russia, which saw several other European pension funds write down their investments to zero as they were not able to sell assets.

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