DENMARK - PFA Pension has become the first of Denmark's commercial pension funds to commit funds to Dansk Vækstkapital - the new state-backed venture capital fund agreed earlier this year.
At a board meeting, PFA Pension decided to give a concrete undertaking to invest DKK520m (€69.7m) for the benefit of growth companies through Dansk Vækstkapital.
It added that this meant it was the first commercial player to make a firm pledge to the fund.
Henrik Heideby, chief executive at PFA Pension, said: "We are ready to commit to our part of the challenge to raise capital for growth businesses. By doing this, we can contribute to Danish innovation and growth at small and medium-sized enterprises. It is an important task and one we are jointly responsible for."
First and foremost, PFA's duty is to produce a good return on customers' pension savings, it said.
For that reason, for PFA to support Dansk Vækstkapital, it has been absolutely crucial that the parties succeed in coming up with a model that ensures a good relationship between risk and return, making an attractive investment, it added.
"PFA does not make compromises with customers' interests," Heideby said. "So we supported the establishment of Vækstkapital on condition that it was also a good investment for pension funds. We believe it is. So we are prepared to invest half a billion through the fund."
PFA Pension manages DK235bn in pensions assets. Although it is a commercial pension provider, it is also customer-owned.
Dansk Vækstkapital, the new DKK5bn venture capital fund, became a reality back in January when the government signed an agreement with ATP, LD and industry association Forsikring & Pension (F&P) to set it up.
The government had initiated talks in August 2010 with a view to get much-needed funding for SMEs.
All in all, the money promised by the pension fund sector - plus three loan and guarantee schemes established as part of the 2011 Finance Act - mean as much as DKK10bn in funds for the targeted businesses, the ministry has said.