II pillar

LHV Pensionifond L
Active Management • Progressive Strategy
10%
-10%
10%
10 year net yield
3
1
7
Risk level
32.19%
0%
100%
Invests into Estonia
100519
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.
There is a transaction associated with the fund taking effect on
See pending transactions
In my portfolio
~
Payments deposited here
Number of units
Acquisition price
Unit NAV
Profit/loss %
Profit/loss €
Total value

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

Biggest investments

The data is presented as at 31.12.2019

Biggest investments
EfTEN Kinnisvarafond4.16%
Luminor 1.5% 18/10/213.63%
Riigi Kinnisvara 1.61% 09/06/273.41%
France Government 2.25% 25/10/222.76%
Latvia 2.625% 21/01/212.29%
JP Morgan Chase And Co 27/01/201.90%
East Capital Baltic Property Fund III1.78%
HSBC Holdings Plc 04/12/211.77%
Baltic Horizon Fund 4.25% 08/05/231.76%
China Development Bank 0.375% 16/11/211.62%

Biggest investments in Estonia

Biggest investments in Estonia
EfTEN Kinnisvarafond4.16%
Luminor 1.5% 18/10/213.63%
Riigi Kinnisvara 1.61% 09/06/273.41%

Asset Classes

The data is presented as at 31.12.2019.

Information about the fund

Information about the fund
Volume of the fund (as of 31.12.2019)913,402,020.38 €
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: 0.72%

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): 1.58%

Ongoing charges are based on expenses for the last calendar year, ie 2018. Ongoing charges may vary from year to year.

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.

November 2019 – We made a new private equity investment

Kristo Oidermaa, Fund Manager

Similar to October, November proved to be quite peaceful on global stock markets, with stock indices of countries showing predominantly a positive rate of return.

The global stock index MSCI World rose by 4% during the month, with the rise being led, for the most part, by the United States. The Japanese stock market index earned a more modest result, rising by 1.6% in local currency and 1.5% measured in euros.

The Euro Stoxx 50 index, including the 50 largest public companies of the Eurozone, showed a 2.8% rate of return in November and the best result came from the stock markets in France and Germany, with the respective rates of return being 3.1% and 2.9%. In November, the Baltic stock markets showed a positive rate of return, with the Riga stock index showing the best result (1.9% rise). The rate of return of the Vilnius Stock Exchange was 1.1%, with the Tallinn Stock Exchange rising by 0.9%.

In November, the private equity fund Partners Group was added to Pension Fund L as a new investment, which invests mainly in the largest companies of Europe and North America. Partners Group was founded in Switzerland, in 1996, and today the company has more than EUR 80 billion in investor assets under management. This makes Partners Group one of the world’s largest private equity companies, and we believe that this is a high-quality supplementary investment to the earlier private equity investments of the pension funds.

Coop Pank raised more than EUR 31 million by selling new shares on the Tallinn Stock Exchange. The money that was raised will enable the bank to implement its business plan and also to increase the value of investments made by LHV funds into Coop’s subordinated bonds.

Siauliu bankas announced pre-term redemption of the bonds issued in 2017 to LHV funds.

In Europe, the main bond markets remained in the red for the third consecutive month. We shall continue working with the goal to place money into local projects instead of large markets with a low return.

October 2019 – The Fund’s first direct investment in real estate

Kristo Oidermaa, Fund Manager

October went by relatively calmly on the world’s stock markets, and exchange indexes showed predominantly positive rates of return. The rate of return of Euro Stoxx 50, an index that is made up of 50 of the largest listed companies in the euro area, was +1.1% in October; good results were also shown by the German stock exchange with an increase of 3.5%, and the Swedish stock exchange with a rate of return of 5.2%. At that, the British stock market index fell 2.2% due to Brexit-related tensions. The result of the Japanese stock exchange was a strong 5.4% in local currency; however, the rate of return remained at 3.2% in euros. In the Baltics, the Vilnius stock exchange showed the best rate of return with an increase of 1.6%; the Tallinn stock exchange also rose by 1.5% in October. The Riga stock exchange had to accept a 0.3% decline.

In October, LHV Pension Funds made their first direct investment in real estate: in cooperation with Lumi Capital, they purchased the office building known as the Skype Building, located at the TalTech scientific campus in Tallinn. The building includes 6,850 square metres of rentable office space, and the largest tenant is the Microsoft Estonia Development Centre. This building is in excellent condition, and with a strong tenant, it will ensure a stable cash flow for the pension funds, and offer an attractive rate of return.

In the bond portfolio, we finalised the purchase of securities from the issue of Ekspress Grupp that was mentioned in the previous monthly review. All bonds were issued to LHV funds; their annual interest rate is 6%; they will be redeemed after eight years, and have been issued supplementary security by the company’s chief shareholder. The company will use the funds raised with the issue for expansion.

Among foreign investments, the price increase of Danske’s subordinated long-term bonds is once again worth mentioning in October. Even though the fines and punishments to be imposed on the Danish bank are far from clear, investor confidence is recovering – the two Danske bonds that are in our portfolio have offered a 24%–25% rate of return this year. At the same time, all main European bond markets were on the negative side, falling slightly less than one per cent, on average. We work with local issuers and continue to see investment opportunities here.

Building a more diversified investment portfolio
Andres Viisemann, Head of LHV Pension Funds

The performance of stock markets this year has exceeded expectations and the S&P 500 Index, which tracks the biggest US companies, reached another record level in November. The index is up 25% year to date, thereby supporting the rise of the global stock market by nearly 22%, following the correction in the fourth quarter of last year.