Direct Equity Investments
PensionDanmark initiated its direct equity strategy in 2009 and has invested in excess of EUR 1bn.
The main objective for PensionDanmark’s direct equity investments is to provide stable returns with a robust downside. This requires us to follow a disciplined evaluation process based on a number of well-defined investment criteria.
PensionDanmark has a targeted allocation of 10 to 15 pct. of assets under management in direct equity investments. The direct equity strategy covers an overlapping continuum:
- Real Assets: Investments in real assets aimed at providing a non-cyclical exposure with a robust downside protection (indicative IRR range of 6-11 pct.)
- Stable Equity: Investments in strong companies in mature sectors aimed at providing a solid return with a robust downside protection (indicative IRR range of 9-14 pct.)
We have a large inflow of capital and an ongoing need to invest. The objective is to build a diversified portfolio of directly owned assets over time within different sectors, geographies and with different risk profiles.
Following an opportunistic approach within the direct equity space, we have less focus on the specific asset type and more focus on the underlying risk characteristics. We prefer early stage involvement in the investment process, as it allows us to leverage our broad experience in deal structuring and risk allocation mechanisms.
We have an efficient decision process and significant resources to adhere to complex and compressed transaction processes.
By exercising active ownership through board representation, we focus on providing management with operational flexibility, whilst maintaining appropriate governance rights.