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Investments – big investors have too much money News

Monday, September 4th, 2017 | Economy

The markets are already "super expensive", says Reima Rytsola, Chief Investment Officer of Varma Mutual Pension Insurance. But this is not the end. "It is the story of this year that everyone seemed to wait for a correction on the stock market, then a correction of 2 to 4 percent, and then is bought wild," said Rytsola in an interview with Bloomberg in Helsinki. "Investors like us have plenty of parked money that will stream into the more risky markets as soon as there is any sort of correction."
Varma, with an investment volume of EUR 45 billion, from which some of the statutory pensions for employees are paid, has reduced its equity investments by 5 percent to 38 percent in the second quarter and increased its cash position. The bulk of the investment came from a US share investment decline due to concerns about the signals coming from the White House.
Varma holds approximately 40 percent of its investment volume in fixed-income securities and has invested 14 percent in hedge funds, including Blackstone and Bayview Asset Management. Varma is, in absolute terms, the largest Hedgefonds customer under the pension funds in the Nordic region, according to data from Bloomberg. However, not all funds provide this information.
A steady running of the shares since February 2016 has been interrupted only by small dents. And every time the prices go down, losses will soon be balanced again, as buyers who want to get rid of the bare cash will come back to the market, as Rytsola said.
The company's profits have so far underpinned valuations and "the multiples are quite stable this year," he said. "The only asset class that is not super expensive is stocks."
(Bloomberg)

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