Finnish earnings-related pensions provider, Elo, has revealed that it made a return of 14 per cent in 2021 on its investments.

This equates to €3.6bn and the market value of Elo’s investments was €29.4bn at the end of the year – compared to €25.9bn at the end of 2020. Elo CEO, Carl Pettersson, said: “Last year was a very exceptional year worldwide. In terms of investment returns, we can be satisfied because the return for the whole year, €3.6bn (or 14 per cent), was the best in Elo’s history. We received particularly good returns in the last quarter of the year.”

Elo’s equity investments returned 26.6 (4.5) per cent, fixed-income investments 10 (2.6) per cent, real estate investments 7.5 (2.2) per cent and other investments 6 (6.0) per cent. The result of investment operations at fair values was €1,562.8m – compared to €-30m in 2020.

“The equity markets generated good returns in 2021. Regional incomes diverged towards the end of the year. US equities were the best-performing, driven by large tech companies, and the weakest-performing were emerging market equities. The Finnish economy recovered from the recession, with consumption and investments supporting growth. As in Europe, the Finnish equity market generated good returns in relation to other markets,” Hiidenpalo said.

“Elo’s private equity investments generated an excellent return of over 40 per cent. The returns are the result of consistent investment activity. Companies benefitted from the recovery of economies and good share price development,” Hiidenpalo added.

The real estate investment market normalised, trading returned close to the pre-Covid-19 levels and construction volumes were high. The results of real estate development and sales, as well as the positive development of market values, raised total returns, especially in residential and office properties, although the effects of the pandemic were reflected in the rental income of real estate early in the year.

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