PensionDanmark has taken the initiative to establish a new infrastructure fund managed by Copenhagen Infrastructure Partners, a newly established team of former employees from Dong Energy. PensionDanmark will be the only investor in the new fund, and has made a EUR 800 million investment commitment, which over the coming 3 to 4 years will be invested in infrastructure in Europe and North America.
In response to the very low bond yields and uncertain economic outlook, PensionDanmark is increasing its investments in various types of infrastructure providing a stable and attractive return. Consequently, PensionDanmark plans to invest EUR 1.6 billion in infrastructure over the next four to five years, which will increase investments in infrastructure to approximately 10% of total assets.
“In the years to come, we aim to increase our exposure to infrastructure significantly. That is why we have decided to set up this new infrastructure fund together with Copenhagen Infrastructure Partners. The fund will complement our direct investments in infrastructure, thereby supporting our objective of investing EUR 1.6 billion in infrastructure over the coming years,” says Torben Möger Pedersen, CEO of PensionDanmark.
About half of PensionDanmark’s investments in infrastructure over the next years will be channelled into the fund. The other half will be managed by PensionDanmark’s inhouse team, which recently announced a new deal with E.ON, where PensionDanmark acquired a 50% stake in three US onshore wind farms with a total capacity of 433 MW.
PensionDanmark was also one of the first pension funds to invest directly in offshore wind when it acquired a 50% stake in Dong Energy’s 166 MW Nysted wind farm late 2010. This was followed in 2011 by a 30% stake in Dong Energy’s 400 MW Anholt wind farm.
“PensionDanmark has been good at seizing the new opportunities to invest directly in offshore and onshore wind farms. To complement these investments, the fund will invest in other energy-related assets within electricity transmission, water supply and biomass-based power generation. Geographically, our focus will be on North America and Western Europe,” says Christian Skakkebæk, one of the partners in Copenhagen Infrastructure Partners.
Copenhagen Infrastructure Partners is a newly established management company set up by four partners with long-standing experience, e.g. from DONG Energy, within infrastructure investment and purchase and sale of companies.
“The new fund will be in the hands of a very competent team and we look forward to working with this team in the coming years. We are confident that they will contribute to an attractive return for our members,” says Torben Möger Pedersen. “We are usually hesitant to invest in funds as they typically involve 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 significant lower level of costs than in similar funds,” he adds.
PensionDanmark will be the only investor in the first fund. Copenhagen Infrastructure Partners expect to raise a second fund in 3 to 4 years’ time. Fund II will be open to other investors.
PensionDanmark is the largest labour market pension company in Denmark. The company manages labour market pensions, health care products and education funds on behalf of 621,000 members employed in 26,000 businesses within the private and public sectors. Total asset under management amounts to EUR 18 billion, while annual premium income totals almost EUR 1.5 billion. By 2017, AUM is expected to exceed EUR 24 billion.
Copenhagen Infrastructure Partners (www.infrastructurepartners.dk) is a newly established management company whose partners have considerable expertise within infrastructure investment in Northern and Western Europe. The management company is owned and run by four partners: Jakob Baruël Poulsen, Rune Bro Roin, Torsten Lodberg Smed and Christian Skakkebæk, all of whom have long-standing experience, e.g. from DONG Energy, within infrastructure investment and purchase and sale of companies.
About Copenhagen Infrastructure Partners
Copenhagen Infrastructure Partners P/S (CIP) is a fund management company focused on energy infrastructure including offshore wind, onshore wind, solar PV, biomass and energy-from-waste, transmission and distribution, and other energy assets like reserve capacity and storage. CIP has approximately 110 employees and offices in Copenhagen, Taipei, New York, Tokyo, Utrecht, and London.
CIP manages six funds and has more than EUR 8 bn under management. CI I, CI A I and CI A II have PensionDanmark as founding- and sole investor. CI II has 19 Danish and international institutional investors and CI III has 42 institutional investors from the Nordics, Continental Europe, the UK, Israel, Asia, Australia, and multi-lateral organizations e.g. EIB. CI NMF I has 15 investors from the Nordics and Continental Europe.
CIP was founded in 2012 by senior executives from the energy industry in cooperation with Pension Denmark.