Pension funds in Denmark are keen to invest more in infrastructure and real estate via public/private partnerships (PPPs), and their investments in these projects have increased by 50% on home territory between 2013 and 2015, according to a survey.
Results of the Danish pensions and insurance association Forsikring & Pension’s 2015 survey into the country’s pension funds and their attitudes towards investment via PPPs also showed the funds were now putting more of their PPP investment into Denmark than abroad, reversing the situation seen in 2011.
According to the survey, Danish pension funds now have DKK11bn (€1.5bn) invested in Danish PPPs, almost 50% more than in 2013.
Including foreign PPP investments, Danish pension funds now have DKK18bn invested, the figures show, 20% higher than in 2013.
However, seen on its own, the funds’ investment in PPPs abroad has fallen by 8% over the two-year period, according to the survey, which takes in responses from 16 pension companies representing 75% of total Danish pensions assets.
Per Bremer Rasmussen, chief executive at F&P, said: “The industry would like to invest more in Denmark, but our members are calling for better framework conditions and more suitable projects.”
Asked to name the barriers to investment in PPPs, the obstacle most frequently cited by respondents in the survey was the dearth of projects available to invest in, with 98% of pension companies citing this, up from 94% in 2013.
In 2015, Danish pension investors were putting 62% of their total PPP investment into domestic projects and 38% into projects abroad, with the domestic portion having risen from 50% in 2013 and 44% back in 2011, the F&P data showed.
Bremer Rasmussen said the poll showed the Danish market for PPPs had now matured in relation to markets abroad, which previously attracted the lion’s share of investment money.
“Our members are finding it is still difficult to invest in PPP projects at home,” he said.
Apart from improved framework conditions underlying the projects, the pension funds also called for better knowledge and understanding of PPPs at the state, municipality and regional level, as well as better communication with public authorities, he said.
“It could be useful to have a central PPP unit in Denmark to facilitate all of this, where people can share knowledge and experiences and coordinate things between the public and private sides,” Bremer Rasmussen said.
PKA, PensionDanmark and Sampension previously joined forces and launched a “one stop shop” for Danish PPPs, earmarking DKK5bn for projects being proposed by local authorities.
Separately, Nordea Life & Pension Denmark announced yesterday that work was finally beginning on the big PPP office building project on Kalvebod Brygge (quay) in Copenhagen, a deal signed in October 2014.
Nordea Life & Pension Denmark is the lead investor in the partnership in which the Danish pension fund for education practitioners (Pædagogernes Pensionskasse) and the pension fund for doctors (Lægernes Pensionskasse) have also invested.
The new building will provide 60,000sqm of space and house government bodies including Rail Net Denmark (Banedanmark) and the Danish Transport Authority (Trafikstyrelsen).
Anders Schelde, CIO at Nordea Life & Pension, said: “We are pleased to collaborate with the government and other stakeholders, and we hope to expand on this with several similar projects in the future.”
The total construction cost of the project was approximately DKK1bn when the deal was signed.