Keva’s Investment Director Ari Huotari announced on Thursday that economic growth prospects have weakened compared to previous forecasts.
In Finland, Keva, the largest investor and pension institution, increased its pension savings by 3.5 billion euros in the previous year. The total market value of Keva’s investment assets at the end of 2023 was nearly 66 billion euros.
Keva’s investment return, which contributed to the increase in pension savings, was 6.8 percent. In comparison, the investment returns for 2022 were flat, with a seven percent decrease.
According to Keva’s CEO Jaakko Kiander, who announced the results on Thursday, “Inflation significantly slowed down over the year. Both equity and fixed income investments performed fairly well.”
In the Spring, investment returns increased, particularly towards the end of the year.
“Towards the end of the year, the market was optimistic due to expected interest rate cuts by central banks, causing a surge in listed investments. However, recent developments have tempered this optimism,” stated Huotari on Thursday morning.
The best performing assets in Keva’s investment portfolio were stock market shares, yielding over ten percent, and fixed income investments yielding nine percent. Absolute return funds, or hedge funds, returned 6.6 percent.
However, real estate investments underperformed, generating a return of -6.1% for Keva.
“Last year was challenging for real estate investors. There were write-downs across the board in real estate investments last year, so the crisis was global,” Huotari added.
According to Huotari, 2024 will be an “interesting” year for investments. He expressed concerns about possible economic downturns in Europe, despite the United States making strong progress.
Looking ahead, the weakening growth trend in the Chinese economy is a concern. The performance of the capital market now largely depends on the actions of central banks.
“The economic growth prospects are weaker than before. A lot depends on how central banks start to act, i.e. at what point they start lowering interest rates and how fast they are,” said Huotari.
