Bloomberg News

Denmark’s ATP Fund Open to Investing in Europe’s Rescue Vehicle

October 27, 2011

(For more on the European debt crisis, see EXT4.)

Oct. 28 (Bloomberg) -- ATP, Denmark’s biggest pension fund, is open to investing in a special purpose vehicle that Europe plans to create to help save the region’s most indebted members.

“We’ll look into it, whenever the details arrive, with substantial vigilance,” Lars Rohde, chief executive officer of the $140 billion fund, said in a phone interview yesterday.

Euro area leaders this week agreed to inflate the European Financial Stability Facility to 1 trillion euros ($1.4 trillion) by insuring new debt and creating a special purpose vehicle to attract external funding from sovereign-wealth funds and private investors. Details on how the investment vehicle will be structured are due to be spelled out in November.

“A major issue is whether there’s enough money in the EFSF,” Rohde said. “Just how much leverage and how it’ll be carried will be essential questions to sort out before committing to such a structure.”

ATP, which holds $88 billion in debt securities, earlier this year said it won’t invest in EFSF bonds because it only targets the “safest” securities. The notes’ AAA credit grade wasn’t enough to entice the fund, Henrik Gade Jepsen, the Hilleroed, Denmark-based fund’s chief investment officer, said in a Feb. 2 interview.

Europe’s Oct. 26 crisis talks opened a path to fixing the region’s debt woes, Rohde said. German government bonds continue to be a solid investment, he said.

Germany’s Strength

“If this plan comes through all of Europe will benefit from Germany’s economic strength and creditworthiness,” Rohde said. “I don’t think this will become a significant negative factor for German government bonds.”

ATP lost a net 2.86 billion kroner ($542 million) in the three months through September, mainly due to losses in Danish equities. Its global bond portfolio, excluding inflation-linked securities, returned 7.5 percent in the first nine months of the year.

In neighboring Norway, the $550 billion oil fund “will, of course, consider any concrete proposal we may get on this type of investment,” spokeswoman Bunny Nooryani said in an Oct. 24 interview. Prime Minister Jens Stoltenberg this week ruled out giving government aid to the euro area.

--Editors: Tasneem Brogger, Christian Wienberg.

To contact the reporter on this story: Peter Levring at plevring1@bloomberg.net

To contact the editors responsible for this story: Tasneem Brogger at tbrogger@bloomberg.net; Andrew Rummer at arummer@bloomberg.net


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