Finnish occupational pension company Elo has revealed that its investments returned -3.7 per cent in 2022, down from 14 per cent in 2021.

The result of investment activities at current values was -€1,493m, down from a positive result of €1,563 the previous year.

Elo attributed the negative return to the weakening of the general economic environment, with economic growth slowing due to the tightening of financial conditions, and increased inflation and interest rates.

The return on Elo’s equity investments was -6.9 per cent, down from 26.6 per cent in 2021, while its return on unquoted equity investments was 20.2 per cent, down from 24.6 per cent.

Its return on fixed income investments fell from 1.7 per cent in 2021 to -2.8 per cent in 2022, and while its return on real estate was positive at 5.3 per cent, this was still lower than the 7.5 per cent it achieved in 2021.

Despite the negative return in 2022 as a whole, Elo achieved a positive return in the fourth quarter of the year.

The market value of Elo’s investments fell from €29.4bn in 2021 to €28.2bn in 2022.

Its solvency ratio also fell during the same period, from 128.1 per cent to 121.4 per cent, while the solvency capital was 1.5 times the solvency limit, down from 1.6 times the year prior.

Premiums written amounted to €4.3bn, while pensions and other compensations paid were almost the same, at €4.1bn.

“The total return on Elo's investments in 2022 was negative, as the returns of most of the listed asset classes were weak,” commented Elo executive vice president, Hanna Hiidenpalo.

“In the last quarter of the year, we already achieved a positive return. The return on investments was improved by diversification into real estate, real estate and infrastructure investments, which had a positive return.”

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