Denmark’s LD Pensions (LD Fonde) announced it has awarded the DKK2bn (€268m) listed alternatives mandate it tendered last summer to BankInvest, citing the Danish asset manager’s quantitative, factor-based approach.
Kristoffer Fabricius Birch, co-chief investment officer and head of portfolio management at the Frederiksberg-based pension fund manager, said today: “We were pleasantly surprised by how many offers we received of extremely high quality.”
“BankInvest proved to offer the best solution in terms of quality and price. We are very much looking forward to developing the new investment model together with their highly-qualified team,” he said.
As previously divulged, LD Pensions said it had received 12 bids from both Danish and international managers.
Explaining the rationale for adding alternatives to the asset mix, LD Pensions said there had been a desire for its members to share in the long-term return potential of alternative investments, and achieve a better spread of risk for LD’s equity investments.
The DKK47bn institution – which manages the Holiday Allowance Fund (Lønmodtagernes Feriemidler) and the Cost-of-Living Allowance Fund (Lønmodtagernes Dyrtidsmidler) – said listed alternatives were a focus area for BankInvest’s management.
“In addition, BankInvest has an investment process based on a quantitative and factor-based approach that is in line with LD Pensions’ equity strategy,” the Danish pensions firm said.
“BankInvest has built an investment process and portfolio construction that provides a well-diversified portfolio and daily estimates of the price of the underlying unlisted investments. It is important for the selection of the right investments,” said Fabricius Birch.
As an investor, LD Pensions said it would also get access to “attractive digital tools”, where exposure and return divided by individual investments and asset classes could be followed on a daily basis.
Andrea Panzieri, CIO of BankInvest Asset Management, said: “LD Pensions has chosen a modern approach to gain exposure to alternatives,” adding that the institution was getting a liquid portfolio with flexible portfolio management, a high degree of diversification and the opportunity to take advantage of distortions in the market.
Of the two pension funds that LD Pensions manages, the new model for alternative investments that BankInvest is to run will be implemented for the holiday fund alone.
“This is due, among other things, to the fact that it has a longer investment horizon than the Cost-of-Living Allowance Fund,” LD Pensions said.
BankInvest will start building the new portfolio in the first half of 2024, and is initially expected to manage around DKK1bn in private equity.
“Later, other alternative investments such as property and infrastructure may also come into question,” said LD Pensions.
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