GLOBAL - PensionDanmark has committed €800m in investment to a new infrastructure fund it has established that will target assets in Europe and North America.
The fund is managed by Copenhagen Infrastructure Partners - a new team of former employees from Danish state-owned company Dong Energy, and PensionDanmark will be its only investor.
Torben Möger Pedersen, chief executive of the €18bn labour-market pension fund, said: "The fund will complement our direct investments in infrastructure, thereby supporting our objective of investing €1.6bn in infrastructure over the coming years."
This will increase its total infrastructure allocation to around 10% of total assets, the fund said.
Over the next 3-4 years, PensionDanmark will channel half of this planned investment in infrastructure through the newly established fund, it said.
The other half is to be managed directly by its in-house team.
The new fund will add to PensionDanmark's existing infrastructure investments in offshore and onshore wind farms by investing in other energy-related assets within electricity transmission, water supply and biomass-based power generation, according to Christian Skakkebæk, a partner in Copenhagen Infrastructure Partners.
"Geographically, our focus will be on North America and Western Europe," he said.
PensionDanmark said it was increasing its investment in various types of infrastructure because prevailing bond yields were so low and the economic outlook uncertain.
The investments are seen providing a stable and attractive return, it said.
Möger Pedersen said PensionDanmark was usually hesitant to invest in funds because they typically involved very high costs.
"But since PensionDanmark has taken this initiative and is the fund's seed investor, we have succeeded in creating a structure with a significantly lower level of costs than in similar funds," he said.
In addition to Skakkebæk, there are three other partners in Copenhagen Infrastructure Partners - Jakob Baruël Poulsen, Rune Bro Roin and Torsten Lodberg Smed.
Although PensionDanmark will be the sole investor in the first fund, the management company said it expects to raise a second fund in 3-4 years, which will be open to other investors.