Danish pensions seed $740m sustainable development fund

The Danish SDG Investment Fund will invest in companies focused on renewables, water, financial services and agribusiness.

Danish development finance institution Investment Fund for Developing Countries (IFU) has held a final close on a fund dedicated to investments that back the United Nations’ Sustainable Development Goals.

The vehicle amassed DKK 4.85 billion ($740 million; €650 million), including commitments worth DKK 400 million each from PKA, PensionDanmark, PFA, ATP, JØP/DIP and PenSam – all Danish pensions.

IFU itself committed DKK 1.65 billion while Nordic financial services group SEB Life & Pension, Secure SDG Fund and Chr. Augustinus Fabrikker Akt contributed the remaining DKK 750 million, according to a statement.

The Danish SDG Investment Fund will support commercial developments in Africa, Asia, Latin America and parts of Europe via co-investments with Danish technology companies. IFU will invest between DKK 25 million and DKK 250 million in each project over a hold period of four years with a possible extension of another two years.

About 80 percent of the capital will be deployed in Africa and Asia, and the remaining 20 percent in LatAm, Europe and MENA, a spokesman for IFU told PEI.

Capital raised for the SDG fund will be deployed in renewable energy, water and sanitation, microfinance and agribusiness.

Impact investing is no longer an emerging area, as more big-name players have established their own dedicated funds to the strategy. Last February, KKR launched its Global Impact Fund, while Partners Group has its cross-asset fund PG Life, which is seeking $1 billion.

Hamilton Lane debuted its impact fund in October and TPG is raising its second impact fund, TPG Rise Fund II, with an up to $3.5 billion target, according to PEI data.