VBV-Pensionskasse, Austria’s largest pension fund with €6.7 billion ($7.6 billion) of assets under management, reported an average investment income of –5.5 percent at the end of 2018, after +7.4 percent in the previous year.
“VBV-Pensionskasse was able to mitigate the negative effects through professional asset management,” said Günther Schiendl, member of the VBV pension fund management board responsible for the investment. “In addition, over the past few years, the VBV Pension Fund has achieved above-average investment results in a sector comparison and has built up corresponding fluctuation reserves. These ‘upholstery’ are filled in positive investment years to compensate for any fluctuations in exceptional cases as possible.”
The VBV-Pensionkasse has increasingly relied on real estate, private markets and infrastructure investments in recent years due to the increasingly high volatility of equity and high-yield corporate bonds.
“Particularly in these three asset classes, we have achieved stable earnings over the last few years with attractive cash flows,” explained Schiendl. “Despite the negative assessment year of 2018, a diversified investment in the capital markets remains the best way to generate good long-term capital formation. For example, over the past five years, our average yield has been over 3 percent a year, even 4 percent a year for the past 10 years.”
The VBV Pension Fund has been focusing on sustainable investments for many years and, according to its own statements, has taken a series of measures in 2018 as well. As part of the VBV’s Low Carbon Initiative, the CO² footprint was measured for the second time in 2018. The pension fund was 17 percent below the benchmark of the global stock index MSCI AC World.
