Danish pension fund PKA ($45.7 billion) has split its alternative investment arm into two separate companies so it may isolate the arm’s responsibilities while also inviting additional institutional investors along for the ride.
The social work and healthcare sector fund’s Alternative Investment Facility, which formerly invested in both private equity/infrastructure funds and direct infrastructure such as energy production, storage, and distribution; water; transport; and telecommunications assets; is now divided into PKA AIP Private Funds and AIP Infrastructure.
The idea is for each company to focus on separate investment assets rather than monitor multiple investment classes at once.
As for the logic behind the maneuver, PKA’s investment director Michael Nellemann Pedersen described the two investment areas being different “both in terms of market dynamics and diverse requirements for employee profiles and competencies.”
“That is why PKA AIP is divided into two independent companies,” he said in a statement.
The multi-fund action will see PKA increase its investment framework through 2021. The Danish pension scheme expects to increase investments by up to DKK30 billion in the two units, DKK18-20 billion through the AIP Private Funds and at least DKK10 billion for AIP Infrastructure.
In addition to the creation of the two new companies, PKA said it is open to other institutional investors looking to create a long-term investment portfolio with an attractive risk/return profile joining the partnerships.
Anette Eberhard, CEO of EKF Denmark’s export credit unit, will be the managing partner for PKA’s new private arm, while the fund’s head of direct infrastructure investment Kasper Hansen will be the managing partner of AIP Infrastructure. Eberhard will start her new position on October 1.
Since its 2012 launch, the fund has invested nearly DKK40 billion in PKA AIP with an annual return of up to 18%.