II pillar

LHV Pensionifond L
Active Management • Progressive Strategy
10%
-10%
10%
10 year net yield
3
1
7
Risk level
33.56%
0%
100%
Invests into Estonia
99867
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 29.02.2020

Biggest investments
EfTEN Kinnisvarafond4.24%
Luminor 1.5% 18/10/213.67%
Riigi Kinnisvara 1.61% 09/06/273.42%
France Government 2.25% 25/10/222.77%
East Capital Baltic Property Fund III1.86%
Baltic Horizon Fund 4.25% 08/05/231.75%
China Development Bank 0.375% 16/11/211.63%
Sampo 3.375% 23/05/491.59%
Barrick Gold Corp1.57%
Siauliu Bankas 23/12/291.51%

Biggest investments in Estonia

Biggest investments in Estonia
EfTEN Kinnisvarafond4.24%
Luminor 1.5% 18/10/213.67%
Riigi Kinnisvara 1.61% 09/06/273.42%

Asset Classes

The data is presented as at 29.02.2020.

Information about the fund

Information about the fund
Volume of the fund (as of 29.02.2020)911,104,744.28 €
Management companyAS LHV Varahaldus
Equity in the fund2 400 000 units
Rate of the depository’s charge0,0564% (paid by LHV)
DepositoryAS SEB Pank

Entry fee: 0%

Exit fee: 0%

Management fee: 0.60%

Success fee: 20% per annum on any increase in the fund's rate of return over the cumulative increase of Estonian social security pension contribution as of 31.08.2019.

Ongoing charges (inc management fee): 1.01%

The ongoing charges figure is an estimate based on the current management fee and the 2019 level of all other recognized costs. Ongoing charges may vary from year to year.

February 2020 – We invested in the Peetri Centre and a new private equity fund

Kristo Oidermaa, Fund Manager

In February, global stock markets experienced a sharp decline, caused by fears of the spread of the coronavirus and the accompanying slowdown of economic growth. The index, which gathers together the 50 biggest publicly traded companies in the Eurozone, decreased by 8.5% over the month, with France and Germany being among the biggest losers. The Japanese stock exchange index dropped by 8%, measured in euros.

The global index of developing markets dropped by 5.3% in February, and Latin-American countries were significantly harder than Asia countries. At the same time, the Chinese stock index recovered from a decline in January, and remained slightly positive in February. This time even the Baltic stock markets went along with the overall decline: The rate of return of the Vilnius Stock Exchange was −6.3% and the Tallinn Stock Exchange fell by 5.3% over the month. The decline of the Riga Stock Exchange was notably smaller at 2.7%.

In February, we added a new private equity investment to LHV Pension Fund’s L portfolio: Ardian Secondary Fund. This fund operates on the secondary market of private equity funds in North America and Europe, which means that the capital invested will be taken into use faster than usual. Ardian was founded in 1996, in France, and it is the world’s largest secondary market private equity fund company, with more than EUR 89 billion in client assets under management.

As a local investment, we signed contracts to allocate EUR 8.5 million to the construction of the Peetri Centre, in Peetri, located on the outskirts of Tallinn. The new centre is home to a Võru Ühistu Coop, Medicum, a 24-7 Fitness and a tennis centre, and has already opened its doors. The investment by LHV pension funds was made for a period of five years, earns 7% interest, and is secured with the mortgages covering the centre’s real estate.

At the same time, we once again reduced the share of listed bonds, by selling Latvian government bonds and the bonds of major US and European banks. Given the climate of fear on the stock markets, the bond markets have currently attracted a lot of money. At the prices achieved in this way we will most likely sell more bonds soon and invest the money received into local projects or stock markets.

A considerable portion of the total assets of the fund have been placed in highly-rated short-term liquid bonds. Firstly, it protects against the current situation and secondly, it enables new investments to be made as soon as attractive possibilities occur.

January 2020 – We made a new private equity investment

Kristo Oidermaa, Fund Manager

2020 began with quite a negative tone on global stock markets, with the stock exchanges of both developed and developing countries remaining mainly in negative territory in January. The rate of return of the Euro Stoxx 50 Index, which combines the largest companies of the euro zone, came to –2,7%, while the stock markets of almost all major powers decreased. Only the Finnish Stock Exchange was able to provide a surprise with its 2.2% rise. The index value of global developing markets decreased by a total of 4.7% during the month, with the biggest declines seen in China as well as in many Latin American countries. The stock markets of the Baltic Republics did not go along with the negative mood and the Tallinn Stock Exchange index rose by a total of 4.6%. The rate of return of the Vilnius Stock Exchange was 3.1%, and the Riga Stock Exchange rose by a modest 0.5%.

In January, LHV Pensionifond L made an investment into the Quilvest Private Equity Fund of Funds. Established in 1888, Quilvest has already been engaged in private capital investments for 45 years and manages assets in excess of 32 billion euros. Quilvest fund has its own unique investment strategy: the plan is to place 50% of the portfolio in high quality private capital funds in North America, Europe and Asia, with 50% of the portfolio to be used for direct investments into companies.

In January, one of the most successful company purchases in Estonia was finally completed when BaltCap and the management board of the company sold the auto24 environment to the international private capital company Apax. LHV’s pension funds were repaid the loans taken during the transaction to purchase the company: the funds earned 3% a year from the bonds, which were an alternative to a bank loan, and 12% from the capital loan. Prior to the final date of redemption, a premium was added which further increased the total return for pension collectors. Active pension funds offer such financing all over the world and in Estonia we can see the funds playing the same role in the future in terms of promoting the economy and earning income for savers.

Šiaulių bankas announced that they have concluded a contract in order to purchase a loan portfolio from the Lithuanian branch of Danske Bank. The 125 million euro portfolio, mainly consisting of home loans, is related to private banking clients. In order to finance its growth, Šiaulių issued subordinated bonds for LHV pension funds at the end of December in the amount of 20 million euros and at an interest rate of 6.15%.

December 2019 – The stock markets of developing countries capped off a successful year

Kristo Oidermaa, Fund Manager

A familiar trend continued on the global stock markets in December, which mainly left the stock markets of developed as well as developing countries in positive territory. The Euro Stoxx 50 stock index, which represents the 50 largest listed companies in the Eurozone, rose by 1.2% in December, with the best performance coming from the Helsinki Stock Exchange, which rose by 4.1%. The Japanese stock index rose during the month by 1.6% when measured in the local currency, but only by 0.3% when measured in euros.

December turned out to be an especially strong month for the stock markets of developing countries, with the MSCI Emerging Markets index rising by 7.2%. In comparison, the results for Baltic stock exchanges were more reserved: The Tallinn and Vilnius stock exchange indexes rose by 1.2% and 0.4%, respectively, while the Riga stock exchange fell by 0.8%.

Partners Group, a private capital fund with a global reach, which is a part of Pension Fund L, made a new investment in December, acquiring a majority holding in the US company EyeCare Partners. The company was established in 2015 and is now one of the largest optometry companies in the United States, employing over 5000 people. EyeCare Partners has grown quickly and will continue to focus on offering the best possible service to patients, expanding its network of clinics, and performing takeover transactions.

At the end of December we reached an agreement with Šiaulių Bankas, the fourth largest bank in Lithuania, on the basis of which LHV’s pension funds invested in the company’s long-term bonds. The annual interest rate on the bonds is 6.15%, the final term is in ten years, and the bank reserves the right to repay these prior to the deadline in December 2024.

Šiaulių Bankas has since grown in such a manner that it serves 7-8% of the Lithuanian banking market. The bank’s biggest shareholder remains the European Bank for Reconstruction and Development (EBRD), which holds more than 25% of its shares. Long-term bonds help to fulfil the bank’s capital requirements, thereby allowing them to grow their loan portfolio.

Over the past few years we have made similar investments in the bonds of Coop Pank and Citadele Banka. By doing so we have created a new asset class in the funds; one that generates over 6% in interest annually.

Stock markets sailed into unknown waters
Andres Viisemann, Head of LHV Pension Funds

While 2019 surpassed expectations in terms of corporate profits on stock markets, this year, profit growth may once again be disappointing. International trade was already at a standstill prior to the spread of the coronavirus, and even the global economy was expected to slow down to some extent.