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Novo Annual Report 2015
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dkk
11.3 billion, while region or country-specific mandates amounted to dkk 3.5 billion. the index mandates totalled dkk 4.4 billion. our danish bond portfolio
consists mostly of short-dated covered bonds, and is managed in-house. by 31 december 2015, the bond portfolio and fixed-term deposits amounted to dkk 6.7 billion. novo
?s portfolio of credit-related investments consists of six separate mandates. one is managed in-house while five are externally managed. by the end of the year, the total amounted to dkk 5.6 billion; out of this total, the internal mandate was responsible for dkk 1.2 billion. novo?s investment performance is evaluated against a number of benchmarks. we use the msci world index to evaluate listed equities; danish bonds are measured against the effas 1-3 index; and the merrill lynch global high yield index is used as the benchmark for credit. we use the j.p. morgan emerging market bond index to evaluate our performance for emerging market debt. illiquid investments novo has invested a minor percentage of its financial investments in illiquid assets. we have an opportunistic, value-driven approach to our illiquid financial investments. this means that we will mainly be allocating funds to this area if we see an investment opportunity that is not accessible through a liquid security. such an opportunity occurred in 2015, when novo bought a significant stake in the private real estate company, dades a/s for dkk 1.7 billion. besides dades, our illiquid financial investments consist of investments in private equity and real estate funds. within private equity, we have invested dkk 947 million out of a total commitment of dkk 1,070 million. within real estate, we have invested dkk 393 million out of a total commitment of dkk 472 million. returns novo?s portfolio of financial investments outperformed the relevant benchmarks in 2015. this year, the return on the portfolio was 10.5%, against a weighted benchmark return of 6.7%. since 2005, when novo expanded the scope of its financial investments, the annual average return has been 7.8% against an annual benchmark return of 4.9% over the same period. novo?s portfolio has performed better than the benchmark portfolio, mainly because our portfolio managers have performed better than their respective benchmarks ? despite a risk profile that was lower than benchmark. the lower risk is explained by a periodical underweight in listed equities and an overweight in government and mortgage bonds. moreover, the dividends from novo nordisk and novozymes, as well as revenue from the sale of novozymes b shares, have been invested at a gradual pace. this has contributed to an average underweight in shares. novo finance annual review 2015 53
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