LD’s alternative investments currently account for less than 5 per cent of its assets – and will be significantly increased with the new investment in alternative credit investments.
Selection of a US fund manager
Apollo was selected on the basis of an assessment of the manager’s expertise in this area. According to LD’s Head of Investments, Claus Buchwald Christjansen, the main reason LD chose Apollo is that they are simply the best fit for LD’s needs:
“We have been in dialogue with the US manager for some time and chose them simply because they are the most suitable, and at the same time they are incredibly innovative when it comes to managing liquidity and hedging in relation to alternative credit investments.”
Different from other pension companies
LD’s requirements and approach to alternative credit investments differ somewhat from those of the majority of the pension sector in Denmark. First and foremost, the investments must generate a high cash flow; secondly, the investment time horizon is considerably shorter than is normally the case in this sector. Last but not least, LD has worked with Apollo to design a hedging portfolio designed to protect the investments against losses in the event of adverse developments in the financial markets:
“Despite this, we expect a relatively high return on these investments. Returns that our members will benefit from in relation to their LD Savings,” says Claus Buchwald Christjansen.
LD’s investment organisation and LD’s assets
Most of LD’s investments have been outsourced to various asset managers; consequently, LD’s investment organisation consists of just three people, namely Investment Director Claus Buchwald Christjansen, Head of Equities Kristoffer Fabricius Birch and Head of Analysis and Reporting Michael Steen. LD’s current assets stand at DKK 43 billion and are expected to reach DKK 25 billion by 2024. Half of LD’s members are over 60, which means they can withdraw their LD Savings whenever they wish.
