​Danish pension fund trio invests $160m in US nature restoration fund

Three Danish pension funds – Sampension, AP Pension and Lærnernes Pension – are investing more than $160m (€148m) in US fund Ecosystem Investment Partners V, a fund directing money into environmental restoration and conservation of nature and biodiversity.

The three Copenhagen-based pension institutions are have pledged $52m, $60m and $50m, respectively, which, according to Sampension, in total amounts to nearly a quarter of the fund’s expected size of about $650m.

Ecosystem Investment Partners (EIP) invests in environmental restoration in the US, the pension fund said, with a focus on wetlands, streams and endangered species.

EIP’s business model is based on US environmental legislation, it said, which has required, since the 1970s, that the environmental impact of construction of new infrastructure, industry or properties be mitigated.

Majken Hauge Johansen, head of alternative investments at Sampension, said: “We have considerable, and good, experience in investing in nature restoration together with EIP.”

She said Sampension had now invested a total of DKK1.3bn in EIP funds since 2012, adding that these investments formed a central part of the portfolio.

“The investments provide reasonable returns for our customers, and at the same time benefit the environment and biodiversity, which is important to us, of course, as a responsible investor,” she said.

Sampension had pinpointed biodiversity as a primary focus area in the future development of its responsible investment work, she said, adding that the pension fund would also like this type of investment in Europe.

“Structured in the right way, the regulation can help to activate capital that otherwise can’t be invested in this type of project – where there is no natural economic return – so giving pension companies a better opportunity to support a very important societal concern,” said Hauge Johansen.

In the US, a market for environmental credits or mitigation banking, has emerged as a result of legislation, and the country is now the world’s largest market for these credits, the Danish pension fund said.

In 2019, the US environmental restoration industry had a turnover of more than $3.5bn, and accounted for some 53,000 jobs when including derivative effects and the supporting industry, according to Sampension.

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