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The Danish government is putting pressure on the country\u2019s DKr5.5tn (\u20ac737bn) pensions industry to invest more in the domestic economy, as some retirement funds reassess their exposure to the US on concerns about its fiscal position and tensions over the future of Greenland.<\/p>\n
Morten B\u00f8dskov, Denmark\u2019s minister for industry, business and financial affairs, told the FT that rising geopolitical tensions mean pension schemes must be more active in supporting the domestic labour market and the development of new technologies, both in Denmark<\/a> and the continent more broadly.<\/p>\n Pension funds \u201cneed to invest more in Europe, more in Denmark and especially in new technologies\u201d, he said.<\/p>\n \u201cWe have a lot of capital in Europe but the problem is that it\u2019s too passive in comparison to what you see in the US, including unfortunately our pension funds,\u201d he added.<\/p>\n His comments come after US President Donald Trump\u2019s threats of tariffs on European countries in his attempt to acquire Greenland<\/a> triggered a political crisis<\/a> and financial market turmoil last month. That added to some European pension funds\u2019 existing concerns about being overly exposed to US assets, with a tumbling dollar and rising Treasury yields already making some investors nervous.<\/p>\n Denmark has the EU\u2019s second-largest pension system after the Netherlands, with assets of more than 200 per cent of GDP, according to the OECD.<\/p>\n B\u00f8dskov said pension funds are discussing \u201cthe consequences of the world we\u2019re living in and the uncertainties that come on a daily basis now\u201d.<\/p>\n He added: \u201cI think it\u2019s important that they remember they also have to invest in the future jobs of their members created in Europe and Denmark\u2009.\u2009.\u2009.\u2009That\u2019s why they have to invest more here.\u201d <\/p>\n A number of Danish pension funds have started to lower or remove their allocation to the US Treasury market, citing concerns over the fiscal position of the world\u2019s largest economy.<\/p>\n PFA \u2014 Denmark\u2019s largest commercial pension fund \u2014 sold its Treasury holdings last year in anticipation of a weaker dollar. AkademikerPension said it would sell its $100mn US Treasury portfolio by the end of last month, with the decision \u201crooted in poor US government finances\u201d, although the rift between Europe and the US \u201cdidn\u2019t make it more difficult to take\u201d.<\/p>\n \u201cSeveral pension funds have lowered their portfolio exposure to US Treasuries now compared with one year or two years ago,\u201d said Kent Damsgaard, chief executive of Insurance & Pension Denmark, a trade group representing most of the industry. <\/p>\n He said the situation in Greenland added \u201ca huge portion of political uncertainty\u201d pushing up the risk of holding US Treasuries \u201cand other assets across the US, although the Danish pension funds are still committed to US-listed companies\u201d.<\/p>\n Denmark\u2019s pension funds had about DKr659mn invested in domestic equities at the end of November compared with DKr1.15bn in US shares, according to data from Danmarks Nationalbank, the country\u2019s central bank.<\/p>\n While their allocations to US equities increased last year, the growth rate has slowed, according to data from I&PD. US equity holdings grew 6.7 per cent across the Danish pension and insurance sector in local currency terms last year, down from a 22 per cent rise in 2024 and 18 per cent growth in 2023. Their allocation to Europe rose 2.9 per cent last year, up from 2.6 per cent the previous year. <\/p>\n Peter Stensgaard M\u00f8rch, chief executive at PensionDanmark, a public and private sector retirement fund managing DKr369bn, said the fund shifted 10 per cent of its listed equity portfolio from North America to Europe at the beginning of March last year but has not made any major geographical reallocations since then. <\/p>\n The fund has between DKr2.5bn and DKr3bn invested in venture capital globally, but \u201cover the past 18 months we have had a dedicated focus on companies in sectors where Denmark has a competitive strength\u201d, such as quantum computing. <\/p>\n To direct more money into Danish start-ups, the government has \u2014 alongside the Novo Nordisk Foundation \u2014 seeded a state-backed venture fund, providing DKr1bn for early-stage companies.<\/p>\n As part of the government\u2019s push to boost domestic investment, B\u00f8dskov convened a meeting of the heads of Denmark\u2019s largest pension funds on Friday to encourage them to invest in 55 North, a fund focused on investments linked to quantum computing in Denmark and Europe and backed by the state investment vehicle, with the aim of doubling the size of the fund.<\/p>\n \u201cIt is clearly an opportunity for them to invest more in this partnership\u2009.\u2009.\u2009.\u2009they have to be more active here,\u201d B\u00f8dskov said.<\/p>\n While many pension fund managers say they are keen to seek out opportunities in Denmark and that returns look attractive, one senior executive who declined to be named described the approach as \u201codd\u201d, with the government in effect fundraising for a single portfolio.<\/p>\n Damsgaard of I&PD added it was \u201cright\u201d that the minister focuses on incentives to invest in the venture market but added that he thought it was \u201cnot the right perspective to single out one kind of investment\u201d, adding the focus should be \u201cmore ambitious\u201d on how to build more funds. <\/p>\n","protected":false},"excerpt":{"rendered":"Stay informed with free updates Simply sign up to the Pensions industry myFT Digest — delivered directly to…\n","protected":false},"author":2,"featured_media":269470,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[114,268,85,46,266,267],"class_list":{"0":"post-269469","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-finance","10":"tag-il","11":"tag-israel","12":"tag-personal-finance","13":"tag-personalfinance"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/269469","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=269469"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/269469\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/269470"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=269469"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=269469"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=269469"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}