ATP’s infra returns more than double despite ‘difficult H1’

Danish pension fund ATP has seen its infrastructure return for the first half of 2018 more than double year on year, becoming the second-biggest driver of the scheme’s performance.

Infrastructure generated returns of Dkr1.5 billion ($234.5 million; €201.1 million) in the first six months of the year, the largest of all asset classes after the Dkr1.8 billion generated by the pension’s private equity investments. Infrastructure includes both renewable energy and forestry investments in ATP’s accounts.

ATP said “the return was achieved broadly across the portfolio”. The pension fund declined to provide a more detailed breakdown, although said the returns were boosted by some realisation of investments.. The group’s fund investments include all three Goldman Sachs infrastructure vehicles, both infrastructure funds raised by the Deutsche Asset Management team and Hudson Clean Energy.

The results are a stark contrast to the figures ATP posted in H1 2017, when infrastructure generated returns of Dkr648 million, falling behind private equity, credit, real estate and both international and Danish equities.

However, the pension fund took a significant hit on its listed international equities portfolio in the last six months, recording a negative return of Dkr2.1 billion, with emerging market investments said to be the main driver of the fall. Christian Hyldahl, chief executive of ATP, said the results marked a “difficult H1” in what is a “low and uncertain return environment”.

While private equity was ATP’s most successful asset class in H1 2018, the return of Dkr1.8 billion is well below H1 2017’s figure of Dkr3 billion. Real estate returns increased slightly from Dkr1 billion last year to Dkr1.3 billion this year.

The first half of the year saw significant direct investments by ATP. The fund was one of three Danish pension schemes to join the Macquarie-led bid to buy local telecoms group TDC in what was a Dkr40.3 billion public-to-private transaction.

It also joined forces with 3i Infrastructure in a move that saw the parties each pay €220 million for EQT Infrastructure’s offshore telecoms network operator Tampnet, while increasing its interest in Spanish gas distribution group Redexis from 19.9 percent to 30 percent.