LHV Pensionifond L
Active Management
10%
-10%
10%
10 year net yield
3
1
7
Risk level
26.54%
0%
100%
Invests into Estonia
97019
Fund investors

Suitable if

  • you have more than 10 years left until retirement,
  • you have average risk tolerance,
  • your aim is the long-term growth of your pension savings.
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Strategy

The assets of the Fund are invested in various asset classes in both local and foreign markets. The Fund's assets may be invested extensively in unquoted instruments, which are primarily used for investing in securities issued by companies domiciled in the home market. The long-term preferred asset class of the fund is private equity investments.

Performance
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Current year
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The Fund's return is expressed as the net yield after deduction of all fees.

Biggest investments

The data is presented as at 31.07.2021

Biggest investments
German Treasury Bill 25/08/20217.67%
France Government 2.25% 25/10/226.17%
German Government 2.25% 04/09/214.91%
France Treasury Bill 25/08/20214.50%
EfTEN Kinnisvarafond3.61%
France Government 3.25% 25/10/213.14%
iShares Gold Producers UCITS ETF3.11%
Riigi Kinnisvara 1.61% 09/06/272.97%
ZKB Gold ETF2.82%
KJK Fund II Sicav-SIF Balkan Discovery1.71%

Biggest investments in Estonia

Biggest investments in Estonia
EfTEN Kinnisvarafond3.61%
Riigi Kinnisvara 1.61% 09/06/272.97%
East Capital Baltic Property Fund III1.67%

Asset Classes

The data is presented as at 31.07.2021.

Information about the fund

Information about the fund
Volume of the fund (as of 31.07.2021)1,049,925,370.14 €
Management companyAS LHV Varahaldus
Equity in the fund2 000 000 units
Rate of the depository’s charge0,054% (paid by LHV)
DepositoryAS SEB Pank

Entry fee: 0%

Exit fee: 0%

Management fee: 0,576%

Success fee: 20% per annum on any increase in the fund's rate of return over the annual increase of Estonian social security pension contribution since the end date of previous calendar year.

Ongoing charges (inc management fee): 1.14%

The ongoing charges figure is an estimate based on the current management fee and the 2020 level of all other recognized costs. Ongoing charges may vary from year to year.

August 2021: Production building acquired in Lasnamäe

Kristo Oidermaa and Romet Enok, Fund Managers

In August, world stock markets continued to rise. The MSCI World index rose 3% in euros, the S&P 500 index, which tracks the US stock market, rose 3.4% in euros, the Euro Stoxx 50 rose 2.6% and the Japanese Nikkei index rose 3.2% in euros.

Emerging markets moved at a similar pace: The MSCI Emerging Markets Index showed a 2.9% increase in euros during the month. The local Baltic stock markets rose significantly in August, led by the Tallinn stock market with 12.9% growth. The Riga and Vilnius stock markets rose relatively equally by 4.1% and 4%, respectively.

In August, LHV pension funds acquired a production building in the Lasnamäe district in Tallinn to earn long-term rental income. The production building at 3/5 Taevakivi St. was built in several stages between 2006 and 2012 and has a leasable area of approximately 10,000 m2. The entire building is leased to Plastone OÜ, a company with a Nordic background, which produces plastic accessories for medical, electrical and electronics companies.

In addition to the production building in Lasnamäe, LHV pension funds own the Valge Maja office building in the centre of Tallinn, the Microsoft office building on the TalTech campus, three stock office-type commercial buildings in Jüri and 127 rental apartments called Lumi Kodud in the North Tallinn district. At the end of 2021, another 164 rental apartments will be completed for the pension funds on Mustamäe Road in Tallinn.

A new private equity investment, the Danish private equity fund Axcel VI, was added to the fund during the month. It is a Nordic-focused fund that invests primarily in medium-sized companies in the industrial, technology, healthcare and consumer goods sectors. Axcel was founded in 1994 and is known, for example, for the successful listing of the Danish jewellery manufacturer and retailer Pandora. Axcel VI is the company’s sixth fund. It started investing last year and currently has six investments in its portfolio.

In August, a directly acquired stake in Bank North, which is starting operations in the United Kingdom, was added to the fund’s portfolio. The Bank will focus on lending to small- and medium-sized enterprises operating outside London. The founders have long-term banking experience, and the Bank’s investors include local entrepreneurs and companies.

One of our most significant investments ended in August when Transpordi Varahaldus redeemed its bonds before maturity. These offered the fund an attractive return compared to the bond markets. In the future, given the new legal requirements, we will focus on investments with higher expected returns.

July 2021: The fund’s performance was supported by gold-related investments

Kristo Oidermaa and Romet Enok, Fund Managers

In July, the euro weakened against the US dollar by only 0.1%, and as a result, the performance of world stock markets was similar in euros and dollars. The MSCI World, the US S&P 500 and the European Euro Stoxx 50 index rose 1.8%, 2.2% and 0.7% over the month in euros, respectively.

The Japanese Nikkei index showed a very different result among developed markets, falling by 4.2% measured in euros in July. The MSCI Emerging Markets index also moved downward, depreciating by 7.1% in euros.

However, the local Baltic stock markets grew in July, and Tallinn was the strongest performer with a 7% rise. This was followed by the Vilnius and Riga stock markets, rising by 4.4% and 1.4%, respectively.

In July, investments in the precious metals, financial and materials sectors brought the highest returns for the pension fund’s stock portfolio, while investments in the energy sector suffered the most.

In the precious metals sector, investments both in physical gold and gold mining companies gained value. In the materials sector, the forestry companies UPM-Kymmene and Stora Enso brought the highest returns.

We believe that precious metals and the commodities sector are segments that proactively offer good protection against declining investor purchasing power. The latter is due to accelerating inflation.

The domestic private equity firm BaltCap announced that the BaltCap Infrastructure Fund, managed by them, will sell its stake in Energia Verde. This is a biomass-based power plant that mainly supplies the district heating system in Riga. The company is being acquired by Gren, a green energy company based in Northern Europe and held by the international private equity firm Partners Group. BaltCap Infrastructure Fund invested in the Energia Verde power plant in 2018. The fund focuses on infrastructure-related investments, mainly in the Baltics.

In July, one of our largest bond investments ended somewhat unexpectedly. At the beginning of last year, we entered into agreements to finance the newly built Peetri Keskus in Peetri Village near Tallinn with bonds. Although the period since then has been very difficult for the entire service sector due to coronavirus restrictions, Peetri Keskus proved its necessity and viability. The centre is now moving forward with new lenders and redeemed all its liabilities to the fund. The average interest return on several bonds related to the Peetri Keskus was 7% per annum, plus an early redemption fee.

We did not add any new investments to the fund in July. Shorter-term German and French government bonds currently account for a much larger than usual share of the fund’s portfolio. From their sale, we will finance the expected payments to those leaving the pension system at the beginning of September.

June 2021: New investments in the energy sector

Kristo Oidermaa and Romet Enok, Fund Managers

In June, world stock markets continued to rise in euros, supported to some extent by the 3.1% strengthening of the euro against the US dollar over the month. The MSCI World Index rose 4.6% in euros, and the US S&P 500 index rose 2.9%. The Nasdaq Composite index, which reflects the US technology sector, showed outstanding results, growing by 8.6% in euros.

In Europe, however, the Euro Stoxx 50 performed modestly, rising 0.7%. Japan’s Nikkei index rose 1.5% in euros, and the MSCI Emerging Markets index rose by 3.1%. Of the local Baltic stock markets, Tallinn and Riga remained on the rise, growing by 2.3% and 3.6%, respectively, in June. The Vilnius stock market showed a completely different result, falling by 1.5%.

In June, the fund made several new investments in the energy sector. The more investments in fossil fuels are restricted due to tighter environmental regulations, and the more we move towards more expensive renewable energy alternatives, the more the energy prices will grow. In the long run, the growth of developing countries and the broader trend of electrification will increase the demand for energy products. To benefit from these trends, we acquired investments that are open to the rising prices for various energy products.

At the end of June, the domestic private equity company BaltCap announced that their BaltCap Private Equity Fund II would sell its 75% stake in Eesti Keskkonnateenused AS. The buyer was MBA Investeeringud OÜ, owned by the management members and shareholders of Eesti Keskkonnateenused AS. Eesti Keskkonnateenused AS provides waste management services in Estonia, and the BaltCap fund made its investment in 2015. Within six years, the company has grown organically and through five acquisitions, resulting in a strong market position and a wide range of services.

In the bond portfolio, the month brought news about our two investments, Sunly and Ekspress Group. The latter plans to sell its printing business and focus on developing digital media. Sunly announced the raising of large amounts of money through the addition of new shareholders. The news from both companies is clearly positive for the bond investor and shows that the companies are developing in the right direction.

As a new investment, we acquired the bonds of Eastnine, a real estate company focused primarily on office buildings in Vilnius. The company issued bonds for the first time, the money was borrowed for three years, and investors are paid 5% interest per annum. We see an opportunity for a further price rise of the bond, which could bring the desired minimum return of 6–7% to the fund.

Bond markets on European stock exchanges were in clear decline in the first half of the year, and we will continue to focus mainly on OTC opportunities.

Half a century since the end of the gold standard
Andres Viisemann, Head of LHV Pension Funds

Although the MSCI World index, which measures global stock markets, rose 1.8% in July, investor sentiment was not equally positive everywhere in the world. The S&P500 index, which tracks large US companies, rose 2.2% during the month, and the value of the Euro Stoxx 50 index, which reflects European stock markets, rose 0.7%.