Key Takeaways
- • Varma posted a 10.2% return in 2024, growing total assets to €64.4 billion from €59.1 billion, extending its lead as Finland's largest pension fund manager over peer Ilmarinen (€63.3 billion in assets).
- • Hedge funds nearly doubled their contribution to Varma's returns, delivering 10.5% in 2024 versus 6.2% in 2023, with the asset class representing 17% of Varma's portfolio—a higher allocation than Ilmarinen's 9.3% hedge fund weighting.
- • Elo and the State Pension Fund of Finland (VER) returned 8.5% and 9.0% respectively in 2024, with Elo's total assets reaching €32.4 billion and solvency capital increasing by €758 million.
- • Listed equities drove broad-based gains across Finnish pension funds, generating 16.5% returns for Varma, while private equity contributed 12.0%, fixed income 4.7%, and real estate declined 2.8%—reflecting strong U.S. market performance offsetting weakness in property assets.
- • Finland's five largest institutional investors collectively grew hedge fund allocations from €22.7 billion to €25.7 billion during 2024, signaling increased confidence in alternative strategies among sophisticated pension fund managers.
Summary
Three major Finnish pension fund managers reported strong 2024 investment returns driven primarily by equity market gains and outsized contributions from hedge fund strategies. Varma, the sector's largest player, achieved a 10.2% return while expanding total assets to €64.4 billion, according to newly published financial results released on February 14, 2025. The gain reinforced Varma's position ahead of Ilmarinen, which reported €63.3 billion in assets, and Elo, which reached €32.4 billion.
Hedge funds emerged as a standout performer across the Finnish pension ecosystem. Varma nearly doubled its hedge fund returns to 10.5% in 2024 from 6.2% in 2023, with the asset class representing a substantial 17% of the fund's total portfolio. This allocation exceeds that of larger competitor Ilmarinen, which maintains a 9.3% hedge fund weighting. Risto Murto, Varma's president and chief executive officer, attributed the year's performance to "broad diversification and the strong performance of the equity markets," noting that 2024 ranked among the best investment years in the past decade.
Equity markets were the primary driver of gains across all three funds. Listed equities generated a 16.5% return for Varma within a broader equities allocation that returned 14.9%, reflecting strong U.S. stock market performance. Private equity contributed a solid 12.0% return, while fixed income produced 4.7%. Real estate investments proved to be the sole drag, delivering a negative 2.8% return. Elo, the third-largest mutual pensions insurance company, reported that its chief executive Carl Pettersson characterized the fund's performance as "very well," with solvency capital rising €758 million during the period.
The State Pension Fund of Finland (VER) posted a 9.0% return for the year. Across Finland's five largest institutional investors—Elo, Varma, Ilmarinen, Keva, and VER—hedge fund allocations grew from a combined €22.7 billion at the end of 2023 to €25.7 billion by year-end 2024, reflecting increased institutional confidence in the asset class as a core component of diversified pension fund strategies.
Hedge funds emerged as a standout performer across the Finnish pension ecosystem. Varma nearly doubled its hedge fund returns to 10.5% in 2024 from 6.2% in 2023, with the asset class representing a substantial 17% of the fund's total portfolio. This allocation exceeds that of larger competitor Ilmarinen, which maintains a 9.3% hedge fund weighting. Risto Murto, Varma's president and chief executive officer, attributed the year's performance to "broad diversification and the strong performance of the equity markets," noting that 2024 ranked among the best investment years in the past decade.
Equity markets were the primary driver of gains across all three funds. Listed equities generated a 16.5% return for Varma within a broader equities allocation that returned 14.9%, reflecting strong U.S. stock market performance. Private equity contributed a solid 12.0% return, while fixed income produced 4.7%. Real estate investments proved to be the sole drag, delivering a negative 2.8% return. Elo, the third-largest mutual pensions insurance company, reported that its chief executive Carl Pettersson characterized the fund's performance as "very well," with solvency capital rising €758 million during the period.
The State Pension Fund of Finland (VER) posted a 9.0% return for the year. Across Finland's five largest institutional investors—Elo, Varma, Ilmarinen, Keva, and VER—hedge fund allocations grew from a combined €22.7 billion at the end of 2023 to €25.7 billion by year-end 2024, reflecting increased institutional confidence in the asset class as a core component of diversified pension fund strategies.
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