Varma - Annual Report 2012

Varma is a responsible and long-term investor

Varma's economic responsibility entails managing pension assets – the company must deliver strong returns in the long term on the pension assets entrusted to its care.

With EUR 34.4 billion in investment assets, Varma is Finland's largest private investor. We invest the assets to secure present and future pensions.

Varma bears long-term responsibility for its pension assets. Our responsibility essentially involves ensuring sufficient pension assets and securing funding for the pension system. We accomplish this by maintaining the profitability of our investment activities, by ensuring good solvency and by maintaining low operating costs.

Varma invests in Finnish and international equities, bonds and other interest-bearing instruments, hedge funds, private equity funds and unlisted shares, real estate as well as commodities.

Careful risk management ensures that if individual risks are realised they will not cause significant financial losses.

We promote work carried out in Finland

Approximately 37 per cent, or EUR 12.8 billion, of Varma's investments have 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 invests in the shares of Finnish companies, provides funding through different loan instruments and owns real estate.

We are familiar with domestic companies. Varma is an active shareholder in the Finnish companies it invests in. We participate in the Annual General Meetings of Finnish companies, and have representatives in the appointment committees and, in certain cases, in the Boards of listed companies. We engage in regular dialogue with company management in investor meetings organised between Annual General Meetings.

Major real estate investor in Finland

Our real estate investments include, in addition to direct real estate investments, domestic and international real estate funds. We also consider it important to offer quality rental flats at a reasonable price, especially in growth regions.

As a real estate investor using its own equity, Varma has made major real estate investments and supported the progress of several real estate projects. Through these actions, we play a key role in supporting Finnish industry and trade and Finnish employment.

Efficient portfolio management

Varma manages its investments internally for the most part. Funds are used, for example, in private equity and hedge investments, and in emerging markets. We make diverse use of our role as a major investor, which makes it possible to achieve low trading costs and the best service.

Our investment operations are efficiently organised: in 2012, investment charges amounted to 0.063 (2011: 0.069) per cent of invested assets. In the long term, cost efficiency is a major competitive factor in our investment operations.