Some of the largest institutional investors in northern Europe have joined forces, committing €1.05 billion to launch an infrastructure fund.
Eight Danish pensions—DIP, JØP, Lægernes Pensionskasse, PBU, Nordea, Nykredit, PFA, and PensionDanmark—have committed assets to Copenhagen Infrastructure Partners, to launch its second fund in the asset class.
The group said today it had entered a 20-year buy-and-hold fund, meaning that it is expected to retain its investments throughout its entire lifetime.
“Infrastructure investments provide members with a sound and stable return well above the bond yield and, unlike stock markets, they are not cyclically sensitive,” said Torben Möger Pedersen, CEO of PensionDanmark. “Therefore we have a target of investing approximately 10% of our balance sheet in stable infrastructure.”
The fund is to target European and American energy infrastructure, such as biomass-fired power plants, electricity transmission, and wind power plants on land and at sea.
It is the latest venture where Danish institutional investors have clubbed together for large non-traditional investments. In January, PKA and PBU pension funds, along with PensionDanmark, committed to a climate change fund. In October last year, ATP and PFA Pension, Denmark’s largest commercial pensions company, said they had bought shares in local energy giant DONG.
Copenhagen Infrastructure Partners’ second fund will remain open to other investors until the end of March next year.
Related content: Investors are forging ahead in infrastructure—but the innovative ones are going it alone.