Perspectives on internal/external management

One of the most significant longer-term trends among Nordic pension funds is the gradual increase in internally-managed assets. At many of the region’s largest pension funds, there is now very little, if anything, of the listed exposure left under external management. The question around internal or external management is, of course, not necessarily a matter of either/or.

PensionDanmark, the DKK 365.5 billion (EUR 49 billion) Danish pension fund, has opted for a mix of internal and external management for its listed equity and credit exposures. Erik Bennike, PensionDanmark’s head of equities and credit, says it sometimes makes sense to insource and sometimes is better to use external managers. “It doesn’t have to be one or the other, but it’s fine as long as you just think it through and make your decision based on facts, observable inputs and reasonable hypotheses. But don’t base it on just one thing, such as insourcing in order to cut costs. Obviously, the