Denmark’s Industriens Pension is investing more than DKK500m (€67m) in a new unlisted credit fund run by Nordea Asset Management, to provide capital for medium-sized Nordic companies.
The DKK172bn pension fund and Nordea AM announced this morning that the newly-established loan fund, Nordea Nordic Senior Loans Fund, would provide loans primarily to Nordic companies owned by private equity funds.
The asset manager said it would set up the new credit fund under a partnership with Nordea Bank, and added that all loans to companies that the loan fund invested in were on the bank’s balance sheet.
Lene Boserup, senior portfolio manager at Industriens Pension, said: “We are really pleased with the investment which we expect to yield a solid and attractive return at a relatively low risk.”
Boserup said the Copenhagen-based pension fund liked the profile of the fund with its focus on steadily-growing Nordic companies in need of capital to develop further.
“This means that the investment also contributes positively to the corporate sector in Denmark and our neighbouring countries,” she said.
Without revealing exactly how much Industriens Pension is investing in the new fund, the two parties said Industriens was “a so-called first investor” and would invest “a major three-digit million amount in the fund”.
“In addition, several other investors are expected, with the fund expected initially to provide loans for a total of approximately DKK3.5bn,” Nordea AM said.
That figure was planned to increase in later investment rounds, the firm added.
Boserup noted the investment fits well with Industriens Pension’s investment strategy, which was strongly focused on risk diversification and, among other things, different types of credit assets alongside listed bonds.
Industriens Pension said it currently has more than DKK15bn in unlisted credit assets, including its investment in the new fund.
Nordea AM said the new fund would focus on credit for stable, medium-sized companies, adding that this was a segment “with an almost non-existent loss history for Nordea over many years”.
Lea Vaisalo, head of private markets at Nordea AM, described the Nordic credit market as structurally attractive but difficult to access.
“Through a strong partnership with Nordea Bank, we have provided the basis for a new source of financing for the benefit of both companies and investor,” she said.
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