(October 3, 2013) — Two large Danish pension funds have partnered with investment bank Goldman Sachs to boost share capital in local energy giant DONG, the company has announced.
National fund ATP and PFA Pension, Denmark’s largest commercial pensions company, have bought new shares worth DKK2.2 billion (€294 million) and DKK800 million (€107 million) respectively. Goldman Sachs has agreed to take DKK8 billion in newly issued stock.
Goldman Sachs and ATP will be represented on the Board of Directors, the company said. It had announced in February that it would be seeking additional equity of at least DKK6 billion.
“This is a great deal for ATP members,” said Carsten Stendevad, CEO of ATP. “We see a significant upside potential in DONG Energy and have great confidence in the ability of the executive team to deliver on the business case.”
Henrik Heideby, PFA’s president and group CEO, said: “The company is undergoing a positive development under a highly competent management team and with its strong position in its markets we see attractive growth opportunities. We believe this is a great opportunity to generate an attractive long-term return for the benefit of PFA’s customers. The contribution to Denmark’s green energy transformation is an added bonus.”
The deal is the latest in a run by investors to take stakes in energy companies.
Data from the Sovereign Wealth Fund Institute found that $76.3 billion was directly invested in energy companies and assets by these government-backed agencies since 2008, with Western Europe receiving most of the money.
In August, Danish pension provider PensionDanmark announced a joint venture with Burmeister & Wain Scandinavian Contractor A/S (BWSC) to build, own, and operate biomass power plants internationally.
The move follows an investment by the Merseyside Pension Fund, one of the largest in the UK public sector, in an anaerobic digester in North Wales.
A month earlier, the Pension Association, the Japanese federation of employees’ pension funds, announced it was making its first direct infrastructure investment, and had entered an agreement to buy a stake in a gas-powered power plant in Michigan. The deal was made alongside infrastructure stalwarts, Borealis—an affiliate of the Ontario Municipal Employees’ Retirement System (OMERS).
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