4 Danish Pensions Launch $700M Sustainable Developing Market Fund

Danish pension funds PFA, PKA, P+ and PenSam have entered into an agreement with the Investment Fund for Developing Countries (Investeringsfonden for Udviklingslande) to establish the Danish SDG Investment Fund II, the IFU announced Wednesday.

The public-private partnership, which aims to make sustainable investments in developing countries, is targeting 5 billion Danish kroner ($705.8 million) in commitments, with $2.7 billion kroner already committed. The remainder is expected to be realized in 2025.

The investments also aim to meet the United Nations’ 17 sustainable development goals, whose principles call for no poverty, no hunger, quality education, affordable and clean energy, and sustainable cities and communities.

“Through commercial investments, the Fund will contribute to the realization of the UN Sustainable Development Goals, with particular focus on the green transition, as well as just and inclusive development in developing economies in Africa, Asia and Latin America,” a fact sheet about the fund stated.

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The four pension funds will combine to commit 60% of the capital—400 million kroner each—with the IFU contributing 1.066 billion kroner.

Capital from the SDG II fund will be allocated across Africa, Asia and Latin America, but specifically in 13 countries: Colombia, Egypt, Kenya, India, Indonesia, Mexico, Morocco, Nigeria, Peru, Senegal, South Africa and Vietnam.

The fund aims to achieve a net annual return ranging from 12% to 15%, with individual investments in individual companies varying from 150 million kroner to 300 million kroner; the fund expects to make investments in 20 companies overall.

“Private investors are often reluctant to invest in developing countries due to the high risk involved, and this [is] a huge challenge,” said Lars Bo Bertram, CEO of the IFU, in a statement. “This task cannot be carried out with public funds alone, and we therefore need to remove part of the risk to attract private risk capital. With the Danish SDG Investment Fund II, we are showing a path to public-private partnerships that can make a significant difference in places in the world that need it most.”

PFA (640 billion kroner), PKA (440 billion kroner), P+ (170 billion kroner) and PenSam (180 billion kroner) manage a combined $201.8 billion worth of assets. The IFU manages about $2.2 billion and expects that to increase to about $4.9 billion by 2030.

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Tags: Emerging Markets, IFU, investing, P+, PenSam, Pensions, PFA, PKA

Former Canadian Prime Minister Stephen Harper

The government of the Canadian province of Alberta announced Wednesday that former Canadian Prime Minister Stephen Harper will be appointed as chairman of the board of the Alberta Investment Management Co. Harper’s appointment follows the dismissal earlier this month of the management company’s board and the firing of top executives, including CEO Evan Siddall, over what the government called concerns over rising costs at the fund.

The new board will include Navjeet Singh ‘Bob’ Dhillon, Jason Montemurro and Jim Keohane, all of whom had been dismissed on November 7. The shuffle has added government representation to the board, however, in the form of Kate White, Alberta’s deputy minister of finance, with her presence intended to “ensure more consistent communications between AIMCo and Alberta’s government.”

“This newly reconstituted board will oversee AIMCo’s effort to restore confidence and stability in Alberta’s investment management agency,” stated a government press release, which reiterated the United Conservative Party’s intent to “reset” the focus of the C$160.6 billion ($114.86 billion) pension fund.

“I am taking on this role, and doing so on a pro-bono basis, because I believe it is a meaningful act of public service to my adopted home province of the last 46 years,” Harper, who was born in Toronto but earned bachelor’s and master’s degrees in economics at the University of Calgary, said in a statement. “I also feel uniquely positioned to help the organization improve its governance. Over several decades, Canadian pensions have earned a global reputation thanks to professional operations, upstanding ethics and prudent risk management.”

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Harper was elected as the first leader of the Conservative Party of Canada in 2004 and served as prime minister of Canada from 2006 to 2015. He co-authored the 2001 Alberta Agenda, which, among other things, recommended that the province withdraw from the Canada Pension Plan and start an Alberta Pension Plan. The current UCP government, led by Alberta Premier Danielle Smith, has been publicly making that case since last year.

Alberta Minister of Agriculture and Irrigation Nate Horner, who was appointed as the interim chair and sole board member following the dismissal of the former executives and board members, will return to his former duties.

In a prior statement, the Alberta government cited rising costs as a factor in the board’s dismissal. AIMCo’s salaries, wages and benefits had increased by 71.38% from 2019 to 2023, as the fund embarked on a global expansion, opening offices in locations such as Singapore, New York and Luxembourg.

During the same period, the number of employees at AIMCo increased 29%, while the percentage of internally managed funds decreased to 67% from 82%

In September, AIMCo CIO Marlene Puffer announced her resignation. Her duties were divided between two asset class heads, with no direct CIO named.