PKA makes €82m profit with sale of UK wind farm

Danish pension fund, PKA, has made a profit of €82m with the sale of its 25 per cent stake in a UK-based offshore wind farm.

The pension fund originally purchased its stake in the wind farm, known as the Burbo Bank Extension, in 2016 for around €388m through AIP Management. The 25 per cent stake has been sold to UK renewable fund manager, Greencoat for approximately €470m.

Burbo Bank Extension is a 258 MW offshore wind farm located 7km off the coast of Liverpool in the UK. Ørsted developed the wind farm and is currently operating it, while holding a 50 per cent equity stake in the asset. The wind farm was completed in 2017 currently supplies renewable electricity to approximately 230,000 UK households. Until the divestment PKA held a 25 per cent equity stake – via AIP – alongside LEGO investment arm KIRKBI (25 per cent) and Ørsted (50 per cent).

Commenting on the sale, PKA CEO, Jon Johnsen, said: “When investing in infrastructure, we do so with a long-term horizon of between 25 and 30 years. Therefore, it is unusual to sell after only six years. In this case, we received an offer that provides an attractive return for our members, which we have chosen to accept.”

In AIP’s latest fund, AIP Infrastructure II, PKA committed approximately half of the total €4bn fund. The proceeds from the sale of Burbo will be recycled into new energy transition projects via AIP.

Over 10 per cent of PKA's pension assets, corresponding to approx. €4.7bn, has been invested in climate-related projects. Johnsen said the fund will “maintain” its strategy of investing in projects that increase the amount of renewable energy being generated.

“We do this because it provides a reasonable return and is in line with our members' desire to make a positive difference to the climate. The proceeds from the sale of Burbo will be reinvested in new and more efficient climate-related projects,” Johnsen added.

    Share Story:

Recent Stories

Podcast: The benefits of private equity in pension fund portfolios
The outbreak of the Covid-19 pandemic, in which stock markets have seen increased volatility, combined with global low interest rates has led to alternative asset classes rising in popularity. Private equity is one of the top runners in this category, and for good reason.

In this podcast, Munich Private Equity Partners Managing Director, Christopher Bär, chats to European Pensions Editor, Natalie Tuck, about the benefits private equity investments can bring to pension fund portfolios and the best approach to take.

Podcast - The power of three: Using Common Contractual Funds to improve tax outcomes for investors
Large asset owners are still investing in equities in a way where they are taxed on their income. The implication is that they get a poorer return. They need to, and can, improve this, but how?

In this podcast, AMX Head of Client and Manager Development, Aaron Overy, and AMX Product Tax Specialist, Kevin Duggan, discuss with European Pensions Editor, Natalie Tuck, about three options to help ensure good withholding tax outcomes for institutional investors.
Mitigating risk
BNP Paribas Asset Management’s head of pension solutions, Julien Halfon, discusses equity hedging with Laura Blows

Europe’s pensions challenges
Francesca Fabrizi meets Matti Leppälä, Secretary General and CEO of PensionsEurope, to discuss the key aims and objectives of the association today.