The Danish pensions industry doubled its holding in defence companies from 2023 to 2024, figures from Insurance and Pension Denmark (I&P Denmark) have revealed.

The research showed that the defence industry is now taking up more of Danish pension savers' portfolios, as defence investments increased from just over DKK 9bn to almost DKK 19bn from January 2023 to April 2024. 

This was driven by the fact that many pension companies have increased their existing holdings of defence investments, as well as the news companies that previously did not have defence investments in their portfolio have since decided to enter this investment area.

Prices have also increased at the same time, especially for European-listed defence companies. 
 
"The industry has proven to be quick to adapt, and many Danish pension savers have changed their view on defence investments," I&P CEO, Kent Damsgaard, explained. 

"So as the government and the Danish Parliament have increased investments in defence, many pension companies are following suit."

Damsgaard stressed that there are still large differences between companies though, because customers and members also have different views on the area.

"In general, the trend is towards more defence investments. But the companies invest on behalf of their customers and members, and there can still be major differences in whether – and if so how – they want to invest in, for example, defence," he stated.

In addition to this, I&P found that the vast majority of Danish defence investments are still in foreign companies, because the Danish defence industry is still relatively small and does not yet have any listed defence companies, unlike its Swedish and Norwegian neighbors. 

Given this, Damsgaard stressed the need for more investable opportunities in Denmark.

"Many pension companies are interested in the defence sector as an important and good place to invest, but of course, there must also be companies and projects to invest in, so our companies are also very optimistic about the upcoming defence industrial strategy for Denmark," he stated.

And the opportunities to invest in Danish defence that are emerging have seen strong backing from pension funds, with growing support for the investor group looking to build the Danish Armed Forces' new barracks, which includes a number of pension fund investors.

"Both Denmark and the rest of Europe are facing a major task of rebuilding European defence," Damsgaard added. "We can only do this by cooperating across private and public investments, and we are happy to help with that."

Work to strengthen cooperation across these sectors is underway though, as I&P also recently announced that it had launched a new Financial Defence and Emergency Partnership, in partnership with Finance Denmark, to improve coordination between the financial sector and Danish authorities.

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