The Danish labour market pension scheme, ATP, said on Thursday it has made its first foray into clean energy with a $400 million investment in a renewable energy private equity fund.
The scheme, known for looking beyond the traditional asset classes preferred by European pension funds, has invested in the Hudson Clean Energy fund, and plans to increase its investments in the sector, said its CEO Lars Rohde.
The scheme has about 400 billion Danish crowns ($72.40 billion) in assets under management, said Rohde, adding that investment in clean energy could grow to 2 to 3 percent of the portfolio — or more than $2 billion — from below 1 percent after the Hudson investment.
The Hudson fund itself plans to invest up to $9 billion to finance solar, wind and hydro energy, as well as newer forms of energy, such as biofuels and biomass.
A large portion of ATP's investment will be earmarked for expansion and development of these less-tested forms of renewable energy.
Denmark is at the forefront of clean energy research and technical development. Its wind turbine technology is highly rated and used all over the world.
"We expect to invest even more in this area. I think we will see a drive to invest in this area from other institutional investors too" Rohde told Reuters.
"It all depends on what is available. There are not that many funds out there, at least not suitable for institutional investors. The message from me is: if these opportunities arise, we will certainly be there."
In its statement, ATP said the investment was driven by expectations of "a good, risk-adjusted return." Rohde said returns could range in the low double-digit region and highlighted the diversification benefits.
Hudson was founded by former Goldman Sachs [GSGSC.UL] partner Neil Auerbach.
