Finnish public sector pension provider Keva made an investment return of 5.3 per cent in the first half of 2024.

Its interim results revealed that at the end of June, Keva’s investments had a market value of €68.5bn, compared to €63.2bn a year earlier.
Regarding its investments, the return was 8.8 per cent on listed equities and 7.3 per cent on hedge funds. Private equity investments generated 4.7 per cent, fixed income investments 1.2 per cent and real estate investments (including real estate funds) 0.4 per cent.

According to Keva CEO, Jaakko Kiander, the outlook for the first half of the year was overshadowed by concerns about economic development and the timing of central bank interest rate cuts

“However, capital markets were relatively stable and bullish, particularly in the USA. The remainder of the year is looking much more turbulent,” Kiander noted.

Listed equities and equity funds accounted for 39.2 per cent and fixed income investments (including the impact of derivatives) for 27.5 per cent of Keva’s total investment assets. Of the other asset classes, private equity investments accounted for 19.4 per cent, hedge funds for 7.1 per cent and real estate investments for 6.8 per cent.

Commenting, Keva CIO, Ari Huotari, said the early part of the year was very positive for high-risk investments.

“Of course, market guesses as to the timing and size of central banks' interest rate cuts varied, but market fluctuations were small. In the third quarter, there have then been concerns in the economy that central banks may have delayed too long in cutting interest rates after the underlying very rapid rate hikes,” he said.

Over the period, contribution income amounted to €3.2bn during the first half of the year, up 4.5 per cent compared to a year earlier; pay rises among other things contributed to this increase. In addition, €3.6bn, up 8.4 per cent, was paid out in local government and wellbeing services county pensions. The 2024 index increases and growth in the number of pension recipients contributed to this increase. Approximately 589,000 persons had earnings-related pension insurance at the end of June.

Overall, €2.8bn in state pensions, €135m in Evangelical Lutheran Church of Finland pensions, €64m in Social Insurance Institution of Finland (Kela) pensions and €17m in Bank of Finland pensions were paid out during the first half of 2024. The state, Evangelical Lutheran Church of Finland, Kela and Bank of Finland pay their own pension expenditure and share of operating costs to Keva.

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