Four pensions back new Danish agri fund

PensionDanmark, PKA, ATP and Industriens Pension will contribute a total of DKK500 million to the newly-established and state-sponsored Danish Agriculture Capital fund.

Four of Denmark’s largest pension funds have agreed to invest DKK125 million ($17.7 million; €16.8 million) each in a state-backed fund that will provide loans to the country’s farming businesses.

ATP, PKA, Industriens Pension and PensionDanmark will contribute DKK500 million total to the newly-established, DKK1 billion Danish Growth Fund, while the Danish government will invest the remaining DKK500 million.

The fund will provide subordinated loans to farms that are run efficiently but which are unable to make new investments due to high levels of debt, according to a statement from the Danish Ministry for Industry, Business and Financial Affairs.

“We look forward to putting this money to work in agriculture, which needs new investments in order to increase efficiency and enhance profitability,” industry minister Brian Mikkelsen said.

The loans will typically range from DKK5 million to DK10 million and will have a maturity of up to eight years, the ministry for industry, business and financial affairs said in a statement. Interest rates will be set on an individual basis.

Peter Køhler Lindegaard, head of listed assets at Industriens Pension, noted that the new fund “will have a strong set up that will ensure an attractive risk-adjusted return to our members.”

“The stage is set for a strong partnership model with the Danish Growth Fund — a state investment fund — and other investors, and we believe that it is a strong model that will benefit both the members of the pension funds and Danish agriculture,” he said. “We are delighted to be able to help financing strong investments projects for Danish farmers. This will hopefully contribute to increased investments in Danish agriculture.”

Last year, PensionDanmark and PKA committed DKK200 million to the Danish Agribusiness Fund, a state-sponsored vehicle aimed at increasing food production and food quality in developing countries in Asia, Africa, Latin America and parts of Europe.