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Green bonds too crowded for EUR 46.9 billion fund keen on stocks

Green bonds are becoming so sought after that their returns no longer justify piling into the asset class, according to two largest private-sector pension funds in Finland.

The issuance of green bonds has more than tripled worldwide since 2015 as the securities become more mainstream and environmentally conscious investing takes off, according to data compiled by Bloomberg. | Photo: Colourbox

Risto Murto, runs one of the two largest private-sector pension funds in Finland finds that the green bond space is on the verge of being filled up.

“It’s a crowded place with bond investors, banks and semi- public institutions,” the chief executive officer of Varma Mutual Pension Insurance Co., said on the sidelines of a recent sustainable finance conference in Helsinki. For a broader asset holder, bigger potential lies in equities and real estate, he said. That’s because an equity investor wields more influence on the company’s strategy and has better chances of pushing the company toward sustainable actions, said Murto, who oversees a 46.9 billion-euro ($53 billion) portfolio of Finnish pension assets.

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