€53bn Danish pensions provider PFA steps ups engagement to boost returns/governance

Heightened presence at company AGMs

PFA, Denmark’s largest commercial pensions provider with DKK400bn (€53.5bn) in assets, plans to step up its engagement with Danish companies in its portfolio in a bid to boost returns while promoting good governance.

In a statement, PFA Asset Management Head Jesper Langmack said: “Until now, the PFA has primarily been a passive investor. But we will increasingly seek to influence the pension money we invest directly in companies.” The scheme is an investor in 25 listed Danish firms.

According to Langmack, the purpose of the increased engagement was to “ensure a good return” from the companies for its beneficiaries. The return should not, however, come at the expense of good governance.

As an example of what form the engagement would take, Langmack said he and PFA portfolio managers would have a much larger presence at company annual general meetings (AGM)

“We want more than ever to share both praise and criticism from the (AGM) podium,” Langmack said, adding that “from time to time” PFA would work with other shareholders.However, Langmack also said PFA had no interest in becoming part of what he called the “activist investor” community. “We are in no way trying to use the media to put pressure on the companies we invest in,” he added. “What we seek to do is to have a direct and constructive dialogue with the companies.”

Langmack did not indicate at which upcoming AGMs PFA plans to speak. A spokesman for the scheme was also not immediately available for further comment.

PFA was among a group of leading Danish funds who quit the Principles for Responsible Investment (PRI) last year citing poor governance over a “sustained period” at the London-based body.

When Langmack last spoke to Responsible Investor, he said that while most companies were open to discussing environmental, social and governance (ESG) issues, some balked. “There are some who do not respond when we try to identify if there has been an incident that conflicts with our policies and guidelines,” he said.