PensionDanmark A/S will invest 800 million euros ($1.03 billion) in a new fund for infrastructure assets such as water supply and electricity transmission as it seeks to counter low bond yields.
The fund will also target biomass power plants with investments in North America and western Europe in the next three to four years, Copenhagen-based PensionDanmark said today in an e-mailed statement.
Pension funds and insurers are seeking alternative investments after a decline in interest rates hurt bond returns and equity-market volatility increased. Energy assets offer long-term, steady gains while renewable power generators are entitled to premium payments. PensionDanmark said Oct. 8 it bought shares in three U.S. wind farms from EON AG.
The fund will support PensionDanmark’s goal of investing 1.6 billion euros in infrastructure in the next four to five years, according to the statement. The venture will be managed by Copenhagen Infrastructure Partners, which plans to raise a second fund in three to four years, the statement shows.