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Impact Investing

IPE special report May 2018

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Nordic roundup: Skandia, Vattenfall, Unipension, Lærernes, OPF

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  • Gothenburg, Sweden

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Swedish pensions group Skandia is teaming up with Swedish power company Vattenfall to invest nearly SEK2bn (€209m) establishing four wind farms in the Nordic country.

The wind farms are to have a total output of 141MW when completed and will be run by a new jointly owned company.

Bengt-Åke Fagerman, Skandia’s chief executive, said: “Vattenfall is a strong operating partner, and wind power is a sector with good growth.”

Skandia had been investing more and more in infrastructure over the last few years because the asset type gives customers a stable and long-term return, he said.

Skandia and Vattenfall said this was the first time a Swedish pensions company was directly financing the construction of a Swedish wind-power facility.

Magnus Hall, chief executive of Vattenfall, said: “The joint investment with Skandia will allow (wind power) expansion in Sweden to take place at a faster rate.”

Skandia and Vattenfall will be equal owners in the new company.

The four wind power projects are Hjuleberg, in the municipality of Falkenberg; Höge Väg in Kristianstad; Juktan in Sorsele and Högabjär-Kärsås, also in Falkenberg.

The other wind farms are being built by Vattenfall and will be handed to the new company in the first quarter of 2016.

In other news, Denmark’s Unipension has announced an account dividend for members of its traditional with-profits pensions of 4.25% for 2015, unchanged from this year.

But it warned that the level of payout could fall in years ahead.

Unipension said it was awarding an account dividend of 4.25% after tax in 2015 for members of the three professional pension funds it runs: the Architect’s Pension Fund (AP); MP Pension, which covers academics in Denmark; and the Pension Fund for Agricultural Academics and Veterinary Surgeons (PJD).

However, Steen Ragn, Unipension’s chief actuary, warned: “We must be realistic, too, and say that our expectation is that, in time, the returns will become lower, and that the account dividend must also be expected to fall alongside this in time.”

He said the pension provider had to look at the long-term prospects, and that the level of interest rates looked as if it would stay very low.

Account dividends – the rate of return on pension savings set in advance – are set according to a pension provider’s overall financial strength. 

They can be changed over the course of the year if necessary.

Meanwhile, Danish teachers’ pension fund Lærernes Pension said it was hiking its account dividend to 6.5% in 2015 and predicted it would pay good dividends in the next few years, even if investment returns diminished.

It said: “Lærernes Pension is well cushioned, and members can reap the benefit of this.”

The pension scheme went on to say that its forecasts showed members could look forward to a good account dividend in the coming years as well, even if there were some years where the investment return was poor.

Separately, Norwegian public sector pension fund Oslo Pensjonsforsikring (OPF) said it was creating the new role of head of property, and now looking for a candidate to fill it.

It said its direct property portfolio was worth NOK9bn (€941m) and invested in some 30 properties and property joint ventures.

Advertising the job, OPF said the head of property would work in a team with the fund’s portfolio managers and report to the investment director.

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