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ATP chief outlines appetite for future climate change investments
Giant Danish fund expects to commit more after initial clean tech/renewables and sustainable forestry investments.
Lars Rohde, CEO, ATP
In less than a week, ATP, the Dkr355bn (€48bn) Danish public pensions giant, has rolled out one of the biggest institutional investment programmes in the climate change space, with plans to do more as and when it sees market opportunity. It started last week with an €292m ($400m) investment in a global clean tech renewable energy fund run by New Jersey-based Hudson Clean Energy Partners, which will also be heavily focused on biomass (biological matter used as fuel) and second-generation biofuels. Then the fund, the fourth largest pension plan in Europe, announced a commitment of €400m in sustainable forestry with an initial €24m purchase of 38,000 hectares (roughly 95,000 acres) of timberland at Upper Hudson Woodland in New York State. While there is no connection between the two ‘Hudson’ investments, you could be forgiven for thinking that ATP, which runs supplementary labour market pension contributions for 4.5 million Danes, had caught something of the Obama zeal on climate change. Lars Rohde, chief executive of ATP, told Responsible Investor that the fund plans to extend its climate change-related investments, but will bide its
time: “We think these are key investments for the markets of the future and we will make more allocations. The question is how we do it and what is available in terms of product in the market and if it is attractive.” Rohde says the starting point for the current investments was a general recognition that climate change solutions will be key drivers for future institutional returns. The clean tech/renewables private equity mandate with Hudson CEP will see the fund investing in solar, wind and hydro investments in Spain, Germany, the USA and the UK. A large portion of the investment is also earmarked for the expansion and development of energy solutions within less tested forms of energy, such as second-generation biofuels and biomass. Rohde believes the biofuels sector has learnt from the major food versus fuel critiques levelled at first generation biofuels such as biodiesel and ethanol and he sees good return prospects allied with the potential solving of future energy problems. Rohde says: “Another major point is that we consider the clean tech/renewables investments as risk diversification that fit into an inflation protection bucket for our total investments along with index-linked
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