LHV Pensionifond M
Active Management
10%
-10%
10%
10 year net yield
2
1
7
Risk level
33.52%
0%
100%
Invests into Estonia
9290
Fund investors

Suitable if

  • you have 3–10 years left until retirement age,
  • you have moderate risk tolerance,
  • your aim is the long-term stable growth of your pension savings.
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Strategy

When investing in assets, the fund prefers cash-flow assets and, where possible, the local market, including less liquid private equity and real estate investments. The investments are predominantly in local currency and up to 75% of the fund's assets can be invested directly in equities. The fund's long-term preferred asset class is real estate investments.

Performance
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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 31.08.2021

Biggest investments
France Government 2.25% 25/10/224.81%
German Government 2.25% 04/09/214.48%
EfTEN Kinnisvarafond3.54%
Luminor 0.792% 03/12/243.51%
ZKB Gold ETF3.31%
Riigi Kinnisvara 1.61% 09/06/273.04%
JP Morgan 1.375% 16/09/212.26%
SG Capital Partners Fund 11.97%
Eastnine 08/07/241.94%
Coop Pank 6.75% 04/12/20271.85%

Biggest investments in Estonia

Biggest investments in Estonia
EfTEN Kinnisvarafond3.54%
Luminor 0.792% 03/12/243.51%
Riigi Kinnisvara 1.61% 09/06/273.04%

Asset Classes

The data is presented as at 31.08.2021.

Information about the fund

Information about the fund
Volume of the fund (as of 31.08.2021)125,443,380.18 €
Management companyAS LHV Varahaldus
Equity in the fund400 000 units
Rate of the depository’s charge0,0576% (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): 0.86%

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.

September 2021: We acquired a stake in a US financial corporation

Kristo Oidermaa and Romet Enok, Fund Managers

The euro appreciated against the US dollar in September, although world stock markets mostly fell. Many indices declined: MSCI World decreased by 2.4% in euros, the S&P 500 index that tracks the US stock market went down by 2.8%, European Stoxx 50 declined by 3.4% and the MSCI Emerging Markets index by 2.3% in euros.

As opposed to the others, the Japanese Nikkei index went up by 5.6% during the month. The results of the Baltic stock markets were quite mixed. While the Tallinn and Vilnius stock markets fell by 3.4% and 7%, respectively, the Riga stock market remained almost unchanged during the month, rising by 0.1%.

For the first time this year, we saw stronger selling pressure in the stock markets, which pushed the major indices about 5% lower in the second half of the month. The decline was driven by growing inflationary pressures in commodity markets, particularly in the energy sector, where higher energy deficits hit both Europe and the rest of the world. Uncertainty was added by news from China, where one of the largest real estate developers, the Evergrande Group, became insolvent.

As a new investment, we signed documents to acquire a stake in the US financial corporation QSCS. It is not a bank, but its operations are somewhat comparable to that of a bank: in addition to investors’ money, funds are raised with US government-guaranteed bonds at favourable rates. The funds raised this way are lent primarily to companies that banks do not finance, mainly due to their legal requirements. These are service-based (for example, in the medical field) and technology companies – and the transactions made are subordinated or converted into holdings. An important value of QSCS lies in the acquired license, which allows for raising funds at favourable rates with the guarantee of the US government and thus earn interest income for investors.

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.

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: Peetri Keskus bonds were redeemed before maturity

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.

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.

In an uncertain environment, it is wise to divide the stakes
Andres Viisemann, Head of LHV Pension Funds

August marked another successful month on the international stock markets. The MSCI World stock market index rose by about 3% during the month, measured in euros, and is 22% higher than at the beginning of the year. The Stoxx 50 index, which tracks large European companies, and the S&P 500, which tracks the largest US companies, rose 2.6% and 3.4% in euros in August and have returned 18.1% and 24.7% in the first eight months of the year, respectively.