Norway, Denmark Swoop for More UK Real Assets

(December 3, 2013) – Norway’s sovereign wealth fund (SWF) has taken a further chunk of London’s premier shopping area, while PensionDanmark has announced the purchase of wind farms in the UK.

Norges Bank Investment Management, which oversees the assets of the world’s largest SWF, today said it had bought a 25% stake in a building named Quadrant 3 from the Crown Estate, the organisation that looks after property owned by the UK sovereign.

The deal marks a further acquisition in the London’s Regent Street area for the SWF, which made its first purchase in 2011, and more generally a deeper move into prime commercial real estate. The fund has a stake in Sheffield shopping centre Meadowhall and took a substantial holding in central Paris earlier this year.

It has earmarked 5% of its assets, which were revealed yesterday to have risen to $818 billion, to the asset class. This means some $41 billion is to be put to work. Today’s announcement accounts for just $97 million.

Elsewhere in the region, PensionDanmark announced another infrastructure deal in the energy sector. It has paid £153 million for a 49% stake in six wind farms based in Scotland and Wales.

“Our investments in different types of infrastructure ensure our members an attractive and inflation linked return for many years,” said Torben Möger Pedersen, CEO at PensionDanmark.

Last month, the fund agreed an historic deal with an Abu Dhabi-based energy company to acquire 40% of a Dutch gas pipeline system for $240 million and in August, it invested £128 million in a new biomass power plant in the UK.

This followed Danish national fund ATP and PFA Pension, Denmark’s largest commercial pensions company, announcing they had bought new shares worth DKK2.2 billion ($400 million) and DKK800 million ($144 million) respectively in local energy giant DONG in October.

These funds are some of the largest in European infrastructure, according to data from Preqin.