End of 2020 Saw Decrease of Pension Fund Investments in Estonia
In the fourth quarter of 2020, the volume of pension fund assets invested in Estonia decreased by 0.91 percentage points as compared to the third quarter, making up 11.93% of the total volume of funds. This was the third consecutive quarter during which investments in Estonia decrease and last time the total volume of pension funds invested in Estonia was below 12% was in the first quarter of 2018.
The biggest decrease in investments in Estonia was recorded for Swedbank’s pension funds, in the total sum of 12.8 million euros. Swedbank was followed by SEB pension funds with 3.1 million euros. Despite of the general decrease in investments, investments of the LHC pension funds in Estonia increased by 1.1 million euros, including first investments in Estonia from the LHV pension fund Roheline. Luminor’s pension funds increased their investments in Estonia by approximately 360,000 euros. By the end of the fourth quarter of 2020, pension funds had invested 631 million euros in Estonia, which is 14.4 million euros less than in the third quarter. The total volume of pension funds was 5.28 billion euros, which is 260 million euros more than in the third quarter.
LHV continues to lead the ranking as the biggest investor of pension fund assets in Estonia, 22% of its total investments have been made in Estonia (decrease of 0.49 percentage points as compared to the third quarter). LHV is followed by Swedbank with 10.2% (decrease of 1.28 percentage points as compared to the third quarter). SEB has invested in Estonia 6.44% of the assets (decrease of 0,67 percentage points as compared to the third quarter). Investments of Luminor’s pension funds to Estonia make up 3.94% of the total volume of pension funds, which means decrease of 0.2 percentage points as compared to the third quarter.
The Estonian Chamber of Commerce and Industry observes and analyses investments of pension fund assets into Estonian economy since the beginning of the year 2016. Back then, pension funds had invested only 5.48 of their assets (147 million euros) in Estonia. The lowest total volume of investments was recorded in the first quarter of 2017 when it was 5.01%. The highest growth was recorded in the fourth quarter of 2017 when the growth of investments was more than two percentage points. The positive trend started after amendments of the law with which the state alleviated the investment restrictions for pension funds.