Danish pension fund sells off US Treasury holdings
The $25bn AkademikerPension fund is selling off its US Treasury holdings, a decision it insists is rooted in the American government’s “poor” finances rather than geopolitics (Jonathan Nackstrand / AFP via Getty Images)
Shortly after this week’s AOX email was scheduled for delivery, the $25bn Danish pension fund AkademikerPension decided to announce that it was selling off all of its US Treasury holdings.
The news of Donald Trump’s Greenland lust is very difficult to escape, since it has been receiving wall-to-wall coverage, and here at AOX we were very pleased to be able to find an angle that allowed us to jump on the geopolitics bandwagon.
That being said, Anders Schelde, the chief investment officer of AkademikerPension, said the decision to sell up was not prompted by the events of the past few days.
He said: “We do not target Treasuries as such in our investment strategy, but we have used them for liquidity and risk management purposes for many years.
“The decision is rooted in the poor US government finances, which make us think that we need to make an effort to find an alternative way of conducting our liquidity and risk management. Now we have found such a way and we are executing on that.
“Thus, it is not directly related to the ongoing rift between the US and Europe, but of course that didn't make it more difficult to take the decision.”
According to the pension fund’s website, it holds a little over $100mn in US Treasuries, which means its holdings amount to less than 1 per cent of the total portfolio.
When AOX asked what these “alternative ways of conducting liquidity and risk management” were, we were told that AkademikerPension would use assets such as cash and short-dated agency debt.
Selling US Treasuries has been one of the supposed weapons with which Europe can try and dissuade Trump from attempting to take over Greenland - certainly that’s what Deutsche Bank’s chief FX strategist George Saravelos said recently.
“Europe owns Greenland, it also owns a lot of Treasuries,” he said.
Now of course the timing of this announcement is fortuitous (or not) given the ongoing news around Greenland. Had it been announced weeks ago, would we have taken much notice? Who is to say.
Whether other asset owners follow the lead of AkademikerPension remains to be seen.
