DENMARK - The huge Danish PFA corporate pension fund has boosted itsinfrastructure investment and plans to move even further into the assetclass next year, probably including direct investments in the sectorfor the first time.
PFA's CIO Henrik Franck told IPE the DKK213bn (€28.6bn) pension fund has now committed approximately 1.5% ofassets under management to infrastructure funds - well above the fund's0.3% strategic asset allocation to the asset class.
"We willmost likely increase this commitment during 2008, but we wish tomonitor the performance of existing commitments before determining amore precise target for final allocation," said Franck.
PFA'sfirst commitment to infrastructure was put in place in the summer of2006 and, at the moment, is only geared to invest via infrastructurefunds.
"But we foresee we will be able to include directinvestments in infrastructure deals in some years' time if the marketdevelops as anticipated," Franck said.
"If we decide to dodirect investments, we shall most likely prioritise Northern Europeaninfrastructure project in the starting period of this effort," he said.
Franckbelieves the investment community faces a massive supply ofinfrastructure investment opportunities over the next few yearsglobally, and says PFA wants to be able to use this development toinvest a substantial part of its assets.
"We believe that mostinfrastructure investments offer an attractive return profile forliability driven investment companies like PFA," he said. "We havecommitments stretching 50-60 years into the future and very few otherinvestment vehicles than infrastructure investments have this very longduration."
PFA has so far committed to two brown-fieldinfrastructure funds which have global reach as well as two Europeanfocused infrastructure funds; one of the latter contains purelygreen-field investments, he added.
PFA also has indirectexposure to motorways in Italy and Mexico, energy transportation in theUS, parking facilities in the US and to port operators in the US and UKamong other investments, added Franck.
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