Denmark’s largest commercial pension provider, PFA, has been reprimanded by the country’s Financial Supervisory Authority (FSA) for failings in the way it manages its alternative investments, such as private equity, credit and infrastructure.

PFA, which manages some DKK725bn (€97.5bn) of assets, said the Danish FSA had carried out an operational inspection of its alternative investments from 16 to 25 March 2021, and based on that, the firm had received five official orders to correct procedures.

The five areas concerned were PFA’s strategic approach to alternative investments and risk management; risk profile and limitation of risks; credit policy; measurement of risks and monitoring and reporting, PFA said in a statement.

The Copenhagen-based firm said it would prepare a report on how it would comply with the FSA’s orders.

Kasper Ahrndt Lorenzen, PFA’s group chief investment officer, said: “We are convinced that PFA has a good and solid setup for alternative investments, where we have strong in-house competencies and processes in the area.”

The pension provider had built up an alternative investments portfolio which had generated a 51% return over the past five years, he said.

“In connection with operational inspection, we have had a good and constructive dialogue with the Danish Financial Supervisory Authority,” Ahrndt Lorenzen said.

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