Financial information & investments

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Varma had a good first quarter

Varma’s investments in January–March yielded a return of 2.7 per cent, and the market value of the investments rose to EUR 44.4 billion. Equities generated the strongest return; all asset classes yielded positive returns. Solvency capital strengthened to EUR 10.8 billion.

Media Release

Financial Statement transparencies (pdf)

Interim Report (pdf) 

With EUR 44.4 billion in investment assets, Varma is Finland’s largest private investor. Varma's investment mission is to accumulate assets received as pension contributions in order to pay present and future pensions. We invest pension assets profitably and securely.
With EUR 44.4 billion in investment assets, Varma is Finland’s largest private investor. Varma's investment mission is to accumulate assets received as pension contributions in order to pay present and future pensions. We invest pension assets profitably and securely.
25 per cent of Varma's total investments has been invested in different ways in Finnish society. Varma is an important investor in Finnish companies and in this way participates in the long-term development of Finnish industry and commerce.
25 per cent of Varma's total investments has been invested in different ways in Finnish society. Varma is an important investor in Finnish companies and in this way participates in the long-term development of Finnish industry and commerce.
Varma’s private equity investments comprise a widely diversified portfolio of international and Finnish private equity funds. In addition, we make co-investments from time to time in the investee companies of funds.
Varma’s private equity investments comprise a widely diversified portfolio of international and Finnish private equity funds. In addition, we make co-investments from time to time in the investee companies of funds.
Varma is a significant real estate investor in Finland. We let flats and a wide variety of business premises that meet the needs of companies of different sizes. We acquire new real estate both by constructing and buying properties. Varma’s real estate investments include, in addition to direct real estate investments, domestic and international real estate funds. The share of real estate investments in Varma’s investment portfolio was 8 per cent at the end of March 2017.
Varma is a significant real estate investor in Finland. We let flats and a wide variety of business premises that meet the needs of companies of different sizes. We acquire new real estate both by constructing and buying properties. Varma’s real estate investments include, in addition to direct real estate investments, domestic and international real estate funds. The share of real estate investments in Varma’s investment portfolio was 8 per cent at the end of March 2017.

Other investments

Varma's other investments consist of hedge funds, inflation-linked investments and commodities. At the end of March 2017, other investments accounted for 18 per cent of the investment portfolio.

Hedge fund investments made up 15 per cent of the portfolio. The portfolio is diversified across several different funds and investment strategies. The investments are allocated to low-risk and liquid funds and to longer-term opportunistic funds.

Varma's inflation-linked investments include inflation-linked bonds issued by states with good creditworthiness. The proportion of commodities in the portfolio is low. The diversified commodities portfolio includes investments in, for example, energy, raw materials and food products. Commodity investments are made through funds and derivatives.

Varma's investments by asset class

Read more about our investments in our latest financial release and annual report. Read also about decentralisation of investments.

Solvency

Varma’s solvency is at a high level. In the first quarter of the year 2017, Varma’s solvency capital strengthened to EUR 10.8 billion, and the solvency ratio was 132.2 per cent. More information is available in our financial release.

Strong solvency upholds confidence in pension provision. Better investment returns mitigate the pressure to increase pension contributions. Varma’s strong solvency benefits our clients through lower insurance contributions.

In good investment years, investment returns are used to increase the solvency capital, while in lean investment years, the solvency capital shrinks. Good solvency enables Varma to aim for higher returns by making higher-risk investments. As a rule of thumb, one percentage point more in investment returns in the long term means a two-percentage-point drop in pension contributions.

Solvency

Varma has published its climate policy

Varma has determined the carbon footprint of its investments and has published its climate policy, which details how the company will achieve a lower-carbon portfolio.

Read more

Responsible investment

Varma invests in a responsible manner. We incorporate responsibility system-atically in all our investment operations.

We require that our investees comply with international agreements and standards, the most important of which are:

  • The UN Global Compact initiative on corporate responsibility
  • The OECD guidelines for multinational enterprises
  • The ILO labour conventions

The topics covered by Varma's principles for responsible investment include mitigating climate change, which is one of Varma's CSR targets. Because this topic is so important and topical, we have drawn up a separate climate policy. Responsibility in also included in our ownership policy.

Varma has signed the UN Principles for Responsible Investment (PRI) and published a PRI responsible investment report:

Varma has also signed the CDP (formerly Carbon Disclosure Project), and joined the PRI-supported Montréal Pledge initiative.

Varma’s Principles for Responsible Investment (pdf)

Varma’s asset-specific responsible investment policies

Climate policy for Varma's investments

Share ownership policy

Varma’s corporate social responsibility

Key figures and previous financial information

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Share ownership policy

We have published our updated share ownership policy, which describes the expectations Varma has of companies in which it is a major shareholder.

Read more:

Varma's share ownership policy (pdf)

Varma's memberships in shareholders' nomination boards of listed companies (pdf)

News release: Varma brings good governance and responsibility to the core of its ownership steering

Corporate social responsibility

Varma's operations are based on work performed in Finland. Earnings-related pension is the main source of income for most pensioners. We have a strong commitment to social and economic responsibility, and as a significant Finnish real estate investor we also take responsibility for the environment.

Earnings-related pension provision forms an integral part of Finnish social security, combining both economic and social targets. Varma's economic responsibility involves ensuring the company's own profitability, and at the same time the competitiveness of the earnings-related pension scheme, in a sustainable manner. First and foremost, economic responsibility involves managing pension assets – the company must produce strong returns in the long term on the pension assets entrusted to its care.

For Varma, social responsibility means taking care of the sustainability of earnings-related pension provision. It means responsible investments, efficient earnings-related pension provision and flexible services for our customers. We want to be a pioneer in workability management. It is important for us to develop well-being at work and rehabilitation schemes. It is how we carry our responsibility for the well-being of our client companies' personnel and for the quality of Finnish working life.

Read more:

Financial, social and environmental responsibility (pdf)

Responsible investment