Six Danish pension funds and two banks are investing DKK8bn (€1.05bn) in a new infrastructure fund managed by Copenhagen Infrastructure Partners and focused on European and US energy assets.
Labour-market funds PFA, PensionDanmark, DIP, JØP, Lægernes Pensionskasse and PBU, along with banking groups Nordea and Nykredit, have committed the money to the Copenhagen Infrastructure II fund, the firm said.
PensionDanmark said it was investing DKK3.5bn in the fund.
The fund will concentrate on investments in energy infrastructure, such as biomass-fired power plants, electricity transmission grid and onshore and offshore wind power in northern and western Europe and North America.
Christian Skakkebæk, partner at Copenhagen Infrastructure Partners, said: “The return on this type of assets is often regulated or based on long-term contracts, which make the return less volatile and relatively independent of general market conditions.”
He added: “We are happy that we have been able to gather such a broad range of institutional investors.”
The new fund is a 20-year buy-and-hold fund, the firm said, meaning it was expected to retain its investments throughout the entire lifetime of the fund.
PensionDanmark, which manages DKK150bn of pension assets, said it was the sole investor in the fund’s predecessor — Copenhagen Infrastructure I — which was set up in 2012, and has been invested in wind farms, biomass power plants and transmission networks in the US, UK and the German part of the North Sea.
Torben Möger Pedersen, chief executive of PensionDanmark, said: “Infrastructure investments provide members with a sound and stable return well above the bond yield and, unlike stock markets, they are not cyclically sensitive.”
Because of this, he said, PensionDanmark had a target of investing approximately 10% of its balance sheet in stable infrastructure.
“Our infrastructure investments have really taken off in recent years, both via our internal investment team and via our very satisfactory cooperation with CIP,” he said.
Copenhagen Infrastructure Partners said it was open for more investment commitments until the end of the first quarter next year, and expected a total commitment of between DKK10bn and DKK12bn.
It said it expects to invest the capital in the fund over the next three years.