PensionDanmark tops peers with 12.8% infra return

Infrastructure is outperforming private equity and real estate for PensionDanmark, PKA and Industriens Pension, which have a combined AUM of more than €89bn.

PensionDanmark has revealed its 2017 infrastructure investment returns have reached 12.8 percent, following strong performance from funds managed by Copenhagen Infrastructure Partners.

The figure surpasses the 10.9 percent it recorded in 2016 and exceeds the returns set by compatriots PKA and Industriens Pension – which have DKr275 billion ($46 billion, €37 billion) and DKr165 billion of AUM respectively – as Danish pensions began releasing preliminary figures ahead of forthcoming annual reports.

Industriens Pension hailed “exceptionally stable” markets in 2017, which helped it deliver an 8.8 percent return for its infrastructure investments, while PKA recorded a 9.3 percent return from infrastructure, a figure which rose to 16.2 percent when just considering its investments in offshore wind.

Infrastructure returns for each of PensionDanmark, Industriens Pension and PKA outstripped those for real estate – at 9.5 percent, 8.1 percent and 8.8 percent respectively. PensionDanmark also beat the 10 percent return recorded by its private equity investments.

PensionDanmark said its infrastructure return was driven by – among other investments – its LP presence in funds managed by Copenhagen Infrastructure Partners, the renewables fund manager it helped form in 2012 and has since helped grow to a total capacity under management of more than 3GW.

“At the time we helped establish CIP, it was considered a risky initiative in the sector,” said Torben Möger Pedersen, chief executive of PensionDanmark, last month. “But one has to say that it has changed in the five years.”

Both PensionDanmark and PKA were also seed investors in a new Africa Infrastructure Fund last year managed by AP Moller Capital, with the aim of raising up to $1 billion. Industriens Pension was among a group of investors which in June acquired a 45 percent stake in British motorway service station owner Welcome Break, in addition to toll road investments in Portugal and the US.