Annual report 2008

Investment markets were unusually challenging in 2008

Download the 2008 annual report here.

2008 heralded a financial tipping point. The global financial sector found itself in serious difficulties sparked by a lax credit policy over a number of years and a credit-fed price bubble in the housing markets across most of the world. As a result, the US financial sector collapsed in September and was only bailed out by official intervention, including massive capital injections by the US Federal Reserve. The financial crisis very quickly spread to most of the world, including Danish banks, which required two bank packages to secure liquidity injection and solvency. For investors, this led to dramatic price fluctuations and major capital losses in many investment categories.

LD generated a negative return

For LD, the turmoil in the financial markets led to a negative return. LDs largest pool, LD Discretionary Investments, generated a return of -6.6% in 2008, which, viewed in isolation, is unsatisfactory. Compared with the market, LD delivered a satisfactory excess return. LD Discretionary Investments is a balanced pool that invests in bonds, listed and unlisted equities, property, etc. The overall performance was largely attributable to the return on equities, which amounted to -30.6%, while the overall return on bonds was 5.8% and the return on property 14.6%. The investment strategy is based on long-term investment, and performance should consequently be viewed from a long-term perspective. For example, the return for the past five years, including 2008, is 36.6%.