Analytics, Estonia, Financial Services, Funds, Investments, Pensioners

International Internet Magazine. Baltic States news & analytics Sunday, 21.07.2019, 18:13

Pension funds could invest EUR 1-2 bln in Estonia in coming years

BC, Tallinn, 05.02.2018.Print version
Pension funds operating in Estonia could invest 1-2 billion euros in Estonia in the next five years, the association of Estonian fund managers said, cites LETA/BNS.

"The tax amendments that entered into force in 2015 have resulted in an advantageous environment and Estonia's economic environment favors investments. By today the volume has grown large enough to make direct investments. We consider it to be realistic that 1-2 billion euros would be invested in Estonia in five years," chairman of the association Mihkel Oja said in a press release.

According to Oja, today pension funds compete with banks in offering financing products because alternatives are expensive -- stock exchanges have risen for a long time and interest rates are low. "An opportunity to support economic growth is an additional bonus. I forecast that in five years the volume of pension funds will grow from 3.8 billion to 7 billion euros," he added.

"In 2017 investments in Estonia increased considerably -- LHV pension funds made decisions worth 170 million euros, Swedbank's pension funds for 66 million euros. The pension funds of LHV and Swedbank invested in Estonia 110% of the payments made into them by the state. The format of investments has also changed -- while previously investments were made through other funds and the stock exchange, at present and in the future mainly direct investments are made. In addition, a second pillar pension funds that invests only in Estonia is being set up," Oja said.

"The more entrepreneurs use mandatory pension fund assets to invest in Estonia the better. It also supports the growth of Estonia's economic development as well as competitive ability," Mait Palts, director of the Chamber of Commerce and Industry, said.

According to Palts, in the fourth quarter of 2017 the investments of pension fund assets increased considerably -- while in the fourth quarter of 2016 a total of 5.56% of pension fund assets were invested in Estonia, in the same period last year the share was 9.59%.

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