Danish pension funds exploring infrastructure PPPs
DENMARK – Five of Denmark's biggest pension funds have linked up to form a working group to look at options for investing in Danish infrastructure projects via large-scale public private partnerships (PPPs).
PensionDanmark, PFA, ATP, Sampension and PKA have set up the group, led by two former managing directors in DONG Energy and Nordea Bank Denmark – Anders Eldrup and Peter Schütze.
Collectively, the five pension funds manage assets of more than DKK1.43bn (€192bn).
The group will investigate Danish and foreign experiences with PPPs and indentify possible legislative barriers, as well as projects suitable for PPPs, particularly within the areas of transport and infrastructure in Denmark.
It will then publish a report on its recommendations in April.
Torben Möger Pedersen, managing director at PensionDanmark, said: "There are many possible ways of expanding the partnership between the public and private sectors."
At the moment, the labour-market pension fund has been involved in partnerships within the field of energy, investing in the switch to more sustainable energy via offshore wind farms in Nysted and Anholt, he said.
In addition to this, the fund was investing via such partnerships within construction, having put money into several properties used by the state, he said, citing the UN City in Copenhagen as an example.
"If PPP projects are put together correctly, they benefit taxpayers, businesses and pension savers," Möger Pedersen said.
Peter Damgaard Jensen, managing director of pensions administrator PKA, said: "We have mainly invested in foreign PPP projects, but we are certainly very interested in Danish projects as well, as our big investment in the Anholt wind farm shows."
PKA currently has DKK6bn invested in infrastructure and expects to increase this total by DKK10bn over the next few years, he said, bringing the infrastructure allocation to just under 10% of assets under administration.
"It makes sense to use PPPs in a range of large traffic projects, which are on hold at the moment, even though they would have big economic benefits," said Möger Pedersen. "A sea tunnel in Copenhagen would be a suitable project."