Bloomberg News

Novo A/S Invests in Equity as Debt Crisis Makes Shares Cheaper

October 26, 2011

Oct. 26 (Bloomberg) -- Novo A/S, a Danish fund with $23.5 billion under management, has increased investments in equities and may buy more shares in the U.S. and Japan as the European debt crisis pushes prices down globally.

“It’s easier now to find favorable valuations than it was three months ago, which is why we are spending more on equities than in the first half of the year,” Chief Financial Officer Thorkil Kastberg Christensen said in an interview. “We are spending a lot of effort to find good opportunities.”

Novo A/S manages the funds of the Novo Nordisk Foundation, making it the largest shareholder in insulin maker Novo Nordisk A/S and enzyme producer Novozymes A/S. The Hellerup, Denmark- based fund’s profit climbed 53 percent last year, to 6 billion kroner ($1.1 billion), as profits at the two companies rose. Novo A/S’s financial investments returned 16.3 percent, according to its annual report.

“Equities, particularly in Europe and the third world, have come down considerably, 25 to 30 percent, so there are better opportunities,” Christensen said yesterday by phone. “We are spending a lot of effort to find good opportunities.”

Falling prices have thwarted Novo A/S’s mandate to have equities make up 40 percent to 70 percent of financial investments, Christensen said. Equities last year made up 48 percent of financial investments and Danish bonds and cash another 31 percent, according to the annual report.

As a result, Novo’s buying U.S. and Japan shares in particular, as well as looking globally, Christensen said. Still, the market turmoil probably will persist for “some time,” he said, so the company is “saving to have some dry powder if it turns out there will be further downside.”

--Editors: Christian Wienberg, Tasneem Brogger

To contact the reporter on this story: Frances Schwartzkopff in Copenhagen at

To contact the editors responsible for this story: Tasneem Brogger at; Angela Cullen at

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