LP view: PensionDanmark on Brexit

The pension has about half of its $2.98bn infrastructure portfolio invested across UK energy. CIO Claus Stampe says Brexit will not influence current projects, but would not talk about future ones.

Danish pension fund PensionDanmark, which has about half of its infrastructure portfolio located in the UK, has told Infrastructure Investor that Brexit will not affect its ongoing projects, but would not comment on how it will affect future investment decisions.

“We joined the EU in 1973 together with the UK and we’re very sad to see the UK leave it,” PensionDanmark chief investment officer Claus Stampe told us in an emailed statement. “We have around DKr20 billion ($2.98 billion; €2.69 billion) invested in infrastructure, primarily wind farms, biomass plants and transmission plants. Around half of the investments are in the UK.” 

“Brexit will not influence the ongoing projects that are already well on their way, since the conditions and the economic parameters of those investments are already fixed. We’ve hedged our GBP investments and we’re relatively cautious when it comes to European stocks at the moment.”

A spokesperson from the pension, though, refused to be drawn on how Brexit might affect future infrastructure investment decisions, citing the current “high uncertainty” following the UK’s decision to leave the EU. In a Bloomberg report, PensionDanmark is quoted as saying that it would lose interest in new deals if the UK voted to leave. The spokesperson had not confirmed or denied that report at press time.

PensionDanmark had just completed its first investment in the UK’s offshore wind sector in late May. The pension committed DKr2.8 billion to the 559MW Beatrice Offshore Wind Farm, off the coast of Wick, through Copenhagen Infrastructure I and II funds, in which it is an anchor investor. The project received a total of £1.47 billion of debt from 13 commercial lenders, the Danish export credit agency Eksport Kredit Fonden (EKF) and the European Investment Bank (EIB).

In a note on Friday, the EIB indicated that its commitment to the UK will remain unchanged at least until it concludes its exit negotiations with the EU.