Danish pensions, bullish on PPPs, form new JV

PensionDanmark, PKA and Sampension – three of Denmark’s largest pensions – have teamed up with real estate firm DEAS and developer MT Hojgaard to invest up to €670m in Danish PPPs.

Three of Denmark’s biggest pension funds – PensionDanmark, PKA and Sampension – have formed a pioneering joint venture with real estate firm DEAS and developer MT Hojgaard to invest in Danish public-private partnerships (PPPs).

The partnership will invest up to DKK5 billion (€670 million; $867 million) in Danish PPPs over the next few years. It will target projects worth at least DKK50 million and says it will be able to fund between 50 and 100 projects, PensionDanmark said in a statement.

The partners aim to offer Danish public authorities a “one-stop-shop” for designing, building and financing PPPs:

“This new collaboration paves the way for the PPP breakthrough that has been talked about for years. Now it is up to the state, regions and municipalities to make use of this new offer of a ‘one-stop-shop’ where all the skills are in one place: design and construction, facility management and finance. We are ready,” commented Torben Moger Pedersen, PensionDanmark’s chief executive.

Pederson hints the joint venture was established in anticipation of a Danish PPP boom, after a report from the country’s Competition and Consumer Authority gave good marks to the country’s first 13 PPPs. 

“0Municipalities and regions have become aware of the many benefits of PPPs, where the quality of [the projects is high],” explained Torben Biilmann, MT Hojgaard’s new chief executive, who joined this month.

Pederson agrees and points out that traditional procurement tends to go over budget and skim on maintenance: “You avoid these problems by using the PPP model. The parties have an incentive to finish on time and at the agreed cost and also to think in terms of long-term, lasting solutions,” he argued.

Joint venture partners MT Hojgaard and DEAS have been at the forefront of the Danish PPP movement, winning five of the 13 projects procured so far. The five projects include three schools, a courthouse, and a hospital car park.

PensionDanmark, PKA and Sampension manage combined assets in excess of DKK500 billion.