Pension funds in Denmark have seen the value of their investments in defence companies double in just over a year, partly because many providers have put more money into the sector against the background of European rearmament, and partly as a result of rising share prices.
Citing a new report, industry association Insurance & Pension Denmark (IPD) said today that between January 2023 and April 2024, pension firms’ defence investments increased to almost DKK19bn (€2.5bn) from just over DKK9bn.
IPD said: “The increase reflects both the fact that many pension companies have increased their existing holdings of defence investments, and that companies that previously did not have defence investments in their portfolios have also entered this investment area.
“At the same time, prices have increased, especially for European-listed defence companies,” it said.
Danish pension funds had total assets of DKK3.8trn at the end of 2024, according to IPD statistics.
Kent Damsgaard, IPD’s chief executive officer, said: “The industry has proven to be quick to adapt, and many Danish pension savers have changed their views on defence investments.
“So as the government and the Danish Parliament have increased investment in the defence sector, many pension companies are following suit,” he added.
Damsgaard said there were still big differences between pension funds in terms of their degree of investment in the defence sector, because their memberships had differing views on the sector.
The lobby group noted that the vast majority of pension funds’ Danish defence investments were currently in foreign companies, because the Danish defence industry was still relatively small; Denmark had no listed defence companies, unlike Sweden and Norway, it said.
Damsgaard said that while many pension firms were interested in investing in the sector, there had to be companies and projects in which to invest.
“So our companies are very optimistic about the upcoming defence industrial strategy for Denmark,” he said.
“Both Denmark and the rest of Europe are facing a major task of rebuilding European defence. We can only do this by cooperating across private and public investments, and we are happy to help with that,” the IPD CEO continued.
A week ago, IPD and banking association Finance Denmark announced a new joint partnership to foster more public-private investment and financing cooperation in order to meet the Nordic country’s increased defence needs.
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