Finland's Varma-Sampo Group to Target $1 Billion at Alternatives

November 15, 2000 (—The Varma-Sampo, Finland's largest pension and insurance group, which oversees in excess of $17 billion in assets, plans to allocate up to 5% of its portfolio to alternatives, including hedge fund and private equity investments, HedgeWorld has learned.

“It’s really the classic model for institutions that you are seeing take shape all across Europe,”said Charles Bathurst of Indocam Asset Management. “They are looking at 3% for private equity and 2% for hedge funds.”

A 5% allocation to alternatives would come it at just under $1 billion. The initial target for hedge funds would weigh in at roughly $350 million and would likely be achieved over time.

The Sampo-Varma Group is made up of individual and group life, industrial and pension- insurance companies. The Group’s publicly traded parent company, Sampo Insurance Company plc is listed on the Helsinki Stock Exchange.

In addition to Finland, the firm maintains regional credit-insurance and industrial-insurance offices in the United Kingdom, Germany, Sweden, the Netherlands, the Baltic States and Russia.

The Finnish giant has grown through a series of recent acquisitions and mergers. The Sampo-Varma Group name comprises a number of businesses that were formerly known as the Sampo Group, Kaleva Mutual Insurance Company, and Varma-Sampo Mutual Pension Insurance Company.

More recently, the group has moved to unify its asset-management and fund-management operations. The firm announced Wednesday that its asset-management and fund-management divisions of Sampo and Leonia will combine their businesses as part of the formation of the new Sampo-Leonia Group.

A merger of Sampo Insurance Co. plc, Finland’s leading insurance group, and Leonia plc was announced in late 1999 and is expected to be finalized Dec. 31.

A report prepared by the company in August showed that subsidiary Sampo-Leonia managed about $3.5 billion in third-party discretionary assets. About 30% of those assets came from pension funds and foundations. Other capital managed by the group stems from mutual funds and corporate pension funds.

By Pete Gallo, Editor


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