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Danish investors back €1bn energy saving infrastructure

09 October 2014

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A new infrastructure fund focussing on European and US energy assets has received DKK8bn (€1.05bn) from six Danish pension funds and two banks.

Labour-market funds PFA, PensionDanmark, DIP, JØP, Lægernes Pensionskasse and PBU, along with banking groups Nordea and Nykredit, have committed the money to the new fund, which is managed by Copenhagen Infrastructure Partners.

The fund will concentrate on investments in energy infrastructure, such as biomass-fired power plants, electricity transmission grid and onshore and offshore wind power in northern and western Europe and North America.

Christian Skakkebæk, partner at Copenhagen Infrastructure Partners, said: "The return on this type of assets is often regulated or based on long-term contracts, which make the return less volatile and relatively independent of general market conditions."

"We are happy that we have been able to gather such a broad range of institutional investors."

The new fund is a 20-year buy-and-hold fund, the firm said, meaning it was expected to retain its investments throughout the entire lifetime of the fund.

PensionDanmark, which manages DKK150bn of pension assets, said it was the sole investor in the fund's predecessor ? Copenhagen Infrastructure I ? which was set up in 2012, and has been invested in wind farms, biomass power plants and transmission networks in the US, UK and the German part of the North Sea.

Torben Möger Pedersen, chief executive of PensionDanmark, said: "Infrastructure investments provide members with a sound and stable return well above the bond yield and, unlike stock markets, they are not cyclically sensitive."

Meanwhile, the chief executive of French pension fund ERAFP has urged activists lobbying US university endowments to divest from fossil fuel to reconsider.

Philippe Desfossés, head of the €16bn supplementary scheme for civil servants in France said divestment does little to address a polluting company's carbon output.

Speaking at the RobecoSAM conference near Zurich, he said: "If you want to lower the carbon intensity of your portfolio by selling your stocks, what does it mean for the guy who has to buy your stocks?"

"You won't reduce on a global basis the carbon intensity if you are selling those stocks to someone else."

The chief executive said it was more important to wait for a time when a company was raising capital to bring about change.

First published - 09.10.2014

Lindsay.sharman@wilmington.co.uk