Denmark’s ATP plans reduction in commitments size

Denmark’s largest pension fund is to planning to mitigate future risk by committing its equity in smaller portions to more smaller funds as well as participating in “club style” investments. These themes were also voiced at this week’s PERE Forum: Europe in London.

ATP Real Estate, the Copenhagen based pension fund manager is to favour club style investments and making smaller capital commitments to more small funds in a move away from investments in large commingled funds.

The pension fund currently has €300m of equity available to invest in non-listed real estate markets but according to a report by IPE Real Estate, it is aiming to spread its risk by investing in an increased number of smaller funds rather than make commitments to a small number of large vehicles.

In the report, ATP partner and managing director, Michael Nielsen said: “I would definitely prefer to have five or six funds instead of two funds with a €150 million commitment.”

He said that club style investments would enable the pension fund to understand its investment partners better than it could in a larger fund with multiple investors.

His words reiterate those of certain LPs at the PERE Forum: Europe in London earlier this week, where a number of private equity real estate professionals emphasised the need for investors to have aligned interests in the investments they make.

At the conference in London, Patrick Kanters managing director for global real estate at Dutch pension fund manager APG Investments and Peter Pereira-Gray, managing director in the investment division of UK charity The Wellcome Trust, told delegates that they foresaw increased “strategic partnerships” happening in the future where the investors are from a similar background.