Denmark’s pension funds are joining forces with the banking sector to foster more public-private investment and financing cooperation in order to meet the Nordic country’s increased defence needs, lobby groups for the sectors announced today.
Insurance & Pension Denmark (IPD) and banking association Finance Denmark said they are launching a new joint partnership called the Financial Defense and Preparedness Partnership.
Ole Krogh Petersen, chief executive officer of pension provider PFA and current chair of IPD, said: “The new security picture requires new solutions – and closer cooperation between the public and private sectors.”
The two industry groups said the new partnership brought banks, mortgage banks, insurance companies and pension companies together in a coordinated effort to strengthen cooperation with authorities and the government.
The goal was to ensure clear frameworks and better coordination around the defence industry’s financing needs, and to mobilise more private resources to support Denmark’s defence and security through investments and financing, they said.
“At the same time, the partnership will create an overview of how the sector can best contribute in relation to the government’s priorities – including the upcoming defence industrial strategy and the establishment of a defence fund,” the groups said, referring to recent government measures.
Krogh Petersen said: “As an industry, we have a constant focus on how our investments can both ensure returns for pension customers and at the same time strengthen our society – also when it comes to Denmark’s security.
“With the partnership, we want to contribute to the financial sector being able to support investments in everything from critical infrastructure to the defence industry to an even greater extent – for the benefit of both security and the robustness of society,” he noted.
IPD said banks and pension companies already financed and had investments in a number of defence firms, but added that the rapid evolution of the “threat landscape” put new demands on how defence and preparedness should be organised.
The two industry associations said Danish pension companies, banks and asset managers were continuously revisiting their current exclusion lists and investment policies – work that the groups said they supported, including by identifying any lack of clarity in the regulatory framework to make sure they did not unnecessarily hinder investments in the defence industry.
The lobby groups said they did that “on the basis that it will always be the individual company that, together with its members and customers, decides whether and how to invest in defence and security”.
“We will enter into a close dialogue with the authorities to create clarity on any risks associated with investments in the defence industry,” the groups added.
PFA and Danica have recently announced changes to their investment rules to allow for more investment in the defence sector, while a number of Danish pension funds have said they will join a collective bid for a contract to build new army barracks.
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