Biggest Danish Pension Fund Girds for End to Crisis Stimulus

Biggest Danish Pension Fund Girds for End to Crisis Stimulus

Denmark’s biggest pension fund said investors need to brace themselves for potential disruptions once central banks start withdrawing the measures that have been propping up the global economy. “When the time for normalization of the monetary policy stance comes, investors may be faced with huge challenges,” ATP, based north of Copenhagen, said today in a statement on its website. “It is important to maintain a patient and flexible investment strategy in order to achieve positive returns.”Unprecedented stimulus from the world’s biggest central banks has supported prices in “risky” markets, including equities, ATP said. The fund, which had a total of 705 billion kroner ($130 billion) in assets at the end of the third quarter, warned that monetary policy isn’t a long-term solution to economic weakness and that central banks can only “buy time” as governments, companies and households adjust.

The investor reaction to the U.S. Federal Reserve’s decision to shelve a tapering of stimulus it had signaled might come as early as September showed how fragile markets remain, ATP said.

“Central banks have been buoying financial markets,” the fund said.

Oil Fund

ATP isn’t the first large institutional investor in Scandinavia to warn that asset prices may be artificially high because of extraordinary stimulus. Norway’s $810 billion sovereign wealth fund, the world’s biggest, said last week it is bracing itself for a “correction” in stock prices after equities soared last quarter.

The MSCI World Index of stocks rose 7.7 percent last quarter and has surged a further 12.9 percent since the end of June. That puts the gauge on course for its biggest quarterly gain since the third quarter of 2010, when it rose 13.2 percent, according to data compiled by Bloomberg.

ATP said the uncertain investment environment, and its effect on inflation and interest rates, is forcing it to cut its target. The fund predicts it will reach 9.7 billion kroner this year from its hedging and investment business, according to its third-quarter report released today. At the end of June, the target was 10.8 billion kroner.

“This is still considered an ambitious target,” ATP said.

To contact the reporter on this story: Frances Schwartzkopff in Copenhagen at

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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