Danish pension fund ATP generated a return of DKK 10.6bn before tax in the first three quarters of 2024, corresponding to 9.7 per cent of the bonus potential, its quarterly report found.

ATP’s investments in listed Danish and international equities and falling interest rates on bonds contributed positively to the return, while private equity contributed negatively.

The value of guaranteed pensions increased by DKK 10.2bn compared to the beginning of the year. At the same time, the portfolio generated a “positive” return after tax of DKK 9.1bn.

The correlation between the guaranteed pensions and the hedging ensured that the value of the interest rate hedging portfolio increased in line with the pension guarantees.

Commenting on the results, ATP CEO, Martin Præstegaard, said: “The development in both interest rates and equities in the third quarter have aligned well with ATP’s investment strategy.

“In the first three quarters of the year, the financial markets generally fluctuated a lot, which has resulted in large variations in the results throughout the year.

“I am pleased that we have earned almost DKK 11bn in our investment portfolio in the first three quarters, despite extraordinary write-downs in private equity.

“ATP pays out a guaranteed, lifelong pension to virtually all Danes, and our focus is always on creating good returns for our members over long time horizons.”

All funds at APT are owned by members as a result, the investment portfolio is attributed to the bonus potential, ATP’s free funds.

As a result of ATP’s returns, the bonus potential increased by DKK 10.5bn in the first three quarters of the year, amounting to DKK 114.5bn at the end of the third quarter.

ATP’s other liabilities consist of total pension liabilities of DKK 572bn and supplementary provisions of DKK 38.7bn. ATP members’ assets totalled DKK 725.2bn after the first three quarters of 2024.

ATP said there was still a “solid” financial excess cover as ATP’s bonus potential at the end of the third quarter was 18.8 per cent of ATP’s liabilities. The bonus capacity has increased by 1.7 percentage points since the start of last year.

ATP’s administration activity expenses remained low, with a key figure for administration expenses of DKK 26 per member for the period. ATP said this was “very low” in a Danish and international context.

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