DENMARK - Danish pension funds PKA and PBU are investing $76m in private equities in Tanzania and Vietnam in a joint initiative with the Danish Ministry of Foreign Affairs to secure sustainable and socially responsible investments in developing countries.
The PKA Group, which consists of eight occupational pension funds, together with PBU, the Danish pension fund for early childhood teachers, will invest the $76m in the newly established capital fund Private Equity Developing Countries, to be managed by BankInvest.
Peter Damgaard Jensen (pictured), Managing Director of PKA, said the prospects for high returns look good:
We are convinced that the investments in these markets have the potential to give high returns. PKA see no conflict between high returns and social responsibility. The investments are also in line with our members' wish to see a more offensive strategy in ethical investments.
The Danish Ministry of Foreign Affairs will contribute an additional sum of about $7m to cover the extra costs of the investments, such as strengthening the ethical, social and environmental conditions in the enterprises where the money is invested.
Jensen added: We would never get involved in this type of investments without the support from The Ministry of Foreign Affairs. The costs would have been far too high.
In addition to Tanzania and Vietnam, the Danish pension funds are also looking into the possibility of investing in other developing countries such as Ghana, Bangladesh and Kenya.
Danish Minister of International Development, Ulla Tonnes, said:
The partnership with the pension funds will secure sustainable and socially responsible investments in several developing countries. The collaboration shows how we can secure more money for development by active collaboration with private sector.
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