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Danish pension funds nets 100% plus returns in 6 years as Japanese renewables infra booms

Asian portfolio producing stellar returns for Industries

Industriens Pension, the DKK163bn (€21.9bn) Danish labour market pension fund – one of the country’s largest – says it has made returns of more than 100% in just six years on investments in solar and wind energy assets driven largely by the shift from nuclear to renewables in Japan, and has more asset disposals in the pipeline with similar performance levels.
It said asset sales of renewables projects in Japan, India, Thailand and the Philippines countries had netted DKK1.2 bn (€162m), a return of more than 100% since the investments were made in the period 2012-2015. The allocations were primarily made through co-investments with specialized infrastructure funds across a range of green energy projects in Asia. Industriens, which has some DKK17bn in infrastructure investments, said the high return was helped by a large portfolio of solar parks in Japan made in the wake of the Fukushima disaster in 2011. Since Fukushima, Japan has focused heavily on increasing the share of renewable energy at the expense of nuclear power. Jan Østergaard, Head of Unlisted Investments at Industriens, said: “The entire Japanese energy supply is undergoing rapid change, and our Japanese energy investments have yielded a great return. Solar cells have played a significant role in Japan’s desire to invest more in renewable energy sources following the Fukushima accident.”He added that Industriens expects to realize further investments in renewable energy in developing countries worth at least DKK 500m in the coming months – also with a return of over 100%.
Østergaard said he was also seeing great expansion in renewables in India where Industriens has invested heavily in energy supply. The pension fund is collaborating with private equity infra fund managers, Actis and Equis, to establish two portfolios of wind and solar power plants covering more than 1.3 million Indian households.
London-based Actis invests exclusively in emerging markets, has $6.5bn in AUM and is a signatory to the United Nations-backed Principles for Responsible Investment (UNPRI). Singapore-based Equis is an Asian infra specialist with a focus on renewable energy and a sustainability goal of addressing resource depletion in the region. Additionally, it says it aims to implement CSR programs to increase quality of life, improve access to services and provide economic and educational opportunities in the communities it operates in.
Østergaard added: “The energy investments in the Far East have so far delivered, and of course we are also pleased to be able to contribute to the development of renewable energy in the region. Investments help accelerate the green change, and it is very uplifting that it can be done while we can achieve such high returns for our members.”