Denmark’s Industriens Pension has committed DKK2.2bn (€300m) to a new fund managed by Goldman Sachs, investing directly in the debt of medium-sized European companies.
The DKK255bn Copenhagen-based pension fund said the sum, which is expected to be invested over the next 18 months, was its largest single commitment to unlisted credit — an increasingly important asset class for the pension fund, which covers industrial workers.
Industriens Pension said the new credit fund, West Street Direct Lending European Evergreen Partners, focused primarily on lending to “robust private equity-owned companies with significant growth potential”.
By far the largest amounts will be lent to European companies, it said, while the credit fund would also lend to a smaller extent to Australian companies.
Anders Ellegaard, head of bond and credit investments at Industriens Pension, said: “It is an attractive investment for us, as we primarily expect a solid return with a relatively low risk.
“At the same time, we like the fund’s focus on solid and steadily growing European companies that are looking for capital to develop further,” he said, adding that this type of lending made a welcome contribution to developing European business.
Industriens Pension said that in its first capital-raising round, the new fund has achieved a total volume of €1.7bn through commitments from several different institutional investors, and would open up to new investors and provide additional capital on a large scale to mainly European companies within an expected 12-18 months.
The labour-market pension fund said its investment in unlisted credit via funds had grown strongly over the last few years, rising to DKK18.4bn now from just DKK6.1bn at the beginning of 2020, adding that it expected its investment in the asset class to continue to increase over the next few years as well.
The Danish pension fund said unlisted credit via funds had delivered solid returns for a number of years, while at the same time having built-in inflation protection.
“In addition, the asset class has helped to spread the overall investment risk, as credit investments are distributed across different types of credit assets instead of just listed corporate bonds,” it said.
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