ATP makes €300m foray into renewable energy

DENMARK - ATP Pension has invested $400m (€293.5m) in a global renewable energy fund which will target energy sources including solar and wind power.

The DKK355.6bn pension scheme revealed through the fund - Hudson Clean Energy - it will invest directly in physical climate system, as well as new forms of energy such as biofuels and biomass.

Lars Rohde, chief executive of ATP, said the investment is a “new initiative in ATP’s climate-related efforts”, but said the fund believes the asset class has a “lot of potential” and will provide the pension scheme with “direct access to brand-new knowledge about climate-related technologies -unique knowledge that will be useful in our future investments”.

Hudson is a fund comprising investment expertise from Goldman Sachs and Credit Suisse and renewable energy experts including those with ‘hands-on’ experience, and targets solar, wind and hydro energy alongside other emerging energy sources.

Within the fund, ATP will invest in physical climate systems - including $9bn in systems that would support the energy equivalent of 2.5m Danish households - and the “dissemination of known and tested technology” in renewable energy, including existing solar, wind and hydro investments in Spain, Germany, the USA and the UK.

However, ATP confirmed “a large portion” of its investment will be “earmarked for expansion and development of energy solutions within less tested forms of energy, such as biofuels and biomass”.

ATP said the investment decision was “driven by expectations of a good, risk-adjusted return”, and would be classified in its investment allocation as an inflation risk asset - which at the end of 2008 equated to 27.5% of the portfolio second only to equities -  alongside real estate, index-linked bonds and infrastructure investments

The scheme’s asset allocation  is split into five asset or risk classes and it explained renewable energy is placed in the inflation-risk section, which was valued at DKK81.9bn, because “significant portions” of its investments in climate development and climate systems “will target countries in which minimum retail prices are enforced. These prices are inflation-adjusted”.

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email nyree.stewart@ipe.com