Alecta has signed its first direct infrastructure investment deal, paying SEK1.6bn (€156m) for a 20% equity stake in Swedish onshore wind plant operator Stena Renewable.
The SEK1trn Swedish occupational pension fund said it has bought the shares in the renewable energy company partly from another Swedish pension fund, AMF, as well as from Stena Adactum - an investment company that is part of Swedish family-owned company Stena.
Johanna Strömsten, portfolio manager at Alecta, said: “We feel really excited about this investment, for several reasons.
“Stena Renewable AB is a well-reputed firm with a long and successful track record in its field. It is an investment in green energy and thus in the transition to a net-zero economy,” she said.
Also, since Stena Renewable’s wind parks were located in Sweden, the energy produced would also power the homes and businesses of Alecta’s customers, she said.
Following the transaction, AMF and Norwegian municipal pension fund KLP will each own 30% of Stena Renewable, and Alecta and Stena Adactum will each hold a 20% stake, Alecta said.
Prior to the deal, AMF had a 35% stake, KLP had 30%, and Stena Adactum was considered the main shareholder with 35%, according to Stena Renewable’s website.
KLP and AMF first bought into Stena Renewable in 2018, investing roughly SEK2.5bn.
The investment is part of Alecta’s strategy to boost its allocation to alternatives to 20% of its overall portfolio by 2024, including the achievement of a 3% infrastructure allocation.
So far, Alecta said it has invested SEK10bn in infrastructure including commitments, not counting the Stena Renewable deal.
“We are investing and increasing our infrastructure mandate, and to start with, we made fund investments and combined them with co-investments, where we were sharing it with other like-minded investors,” Strömsten told IPE Real Assets.
“Of course it takes a little while to find these opportunities. and we will still always have a focus on funds and co-investments, but I see us in the future hopefully doing more direct investments like this, especially in the domestic market,” she said, adding that the pension fund’s infrastructure team - which now numbers five - is also looking for opportunities internationally.
Hans Sterte, Alecta’s CIO described the Stena Renewable deal as a hallmark investment for the pension fund.
“It carries all the traits we look for – attractive risk-adjusted returns over a long period of time with focus on our commitment to net-zero 2050 as a part of the [Net-Zero] Asset Owner Alliance,” he said.
As a 20% owner of Stena Renewable, Alecta will have one seat on the company’s board.
Strömsten said the pension fund welcomed this hands-on role. “I think it’s a good opportunity for us to have our eyes and ears to the market, both in terms of market knowledge but also relationship building,” she said.
Stena Renewable produces 315MW of power, and has nearly 600MW under construction, Alecta said. Most of its wind parks are located in southern Sweden.
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