The pensions arm of Sweden’s SEB financial group has backed a government-backed Danish investment fund targeting commercial investment in developing countries.
SEB Life & Pension is one of three new investors committing capital to the Danish SDG Investment Fund, which supports the UN’s Sustainable Development Goals (SDGs) through its investment.
The other new investors in the final round of fundraising were Secure SDG Fund and Chr. Augustinus Fabrikker, the investment company of the Augustinus Foundation.
In June 2018, the fund was launched via a deal between IFU – Denmark’s state investment programme for developing markets – and pension providers PKA, PensionDanmark, PFA, ATP, JØP/DIP and PenSam.
The IFU agreed to contribute 40% of the capital with the private investors putting in 60%.
Following the latest fundraising, the total commitment hit DKK4.85bn (€650m), compared to DKK4.1bn in June. However, this was slightly below the original target of DKK5bn.
Rebecka Elkert, responsible investment specialist at SEB Life & Pension, said: “We see the investment as an important part of our efforts to let sustainable investments permeate our traditional portfolio management.”
The fund was an innovative example of public and private capital joining forces to make a difference, and at the same time make commercial investments with solid returns, she said.
“IFU has more than 50 years of experience investing in developing countries and lifting people out of poverty,” Elkert said.
Torben Huss, CEO of IFU, said: “We are very pleased to welcome three more investors and complete the fundraising for the Danish SDG Investment Fund very close to the original target of DKK5bn.”
The Danish SDG Investment Fund will make equity investments in companies in Africa, Asia, Latin America and parts of Europe, mainly in cooperation with Danish businesses.
Because the new fund aimed to mobilise capital in developing countries, in total the fund’s investments were expected to be around DKK30bn, IFU said.