A part of Watch Media

AMWatchSunday29 January 2023

  • Search
  • Log in
  • Fund Management
  • Pension
  • Responsible Investing
  • People
  • Search
  • Log in
  • Latest
  • Search
  • Log in
  • Fund Management
  • Pension
  • Responsible Investing
  • People
20/02/2017at 14:04

Sampension waiting for chance to enter offshore wind

Danish pension fund Sampension has yet to directly invest in offshore wind farms, and is awaiting attractive opportunities. FWAM talks to Chief Investment Officer Henrik Olejasz Larsen about his take on the investment opportunities in offshore wind projects.
Henrik Olejasz Larsen, Investment director at Sampension. | Photo: PR
by MICHAEL TRIER DUELUND

When the right opportunities arise, Danish pension fund Sampension will be ready to jump on the offshore wind train.

Sampension, just like many other pension funds, has experienced that expected returns on new offshore wind projects have become somewhat unattractive.

But in spite of this, the pension fund does not rule out that it may enter future offshore wind projects, explains Henrik Olejasz Larsen, Chief Investment Officer at Sampension, when FWAM asks if Sampension might invest directly in offshore wind turbines within a foreseeable future.

"We have not yet seen projects that we find sufficiently attractive. But I hope that it is posible. I wouldn't call it an expectation, but it's definitely my hope," he tells FWAM.

More projects could make offshore wind more attractive

Sampension has yet to make direct investments in offshore wind farms, but the fund has invested "a good billion Danish kroner" (EUR 135 million) in onshore wind turbine projects.

Olejasz Larsen explains that Sampension has not invested directly in offshore wind, as the company found that the risks in the projects are not adequately compensated for by expected returns.

"I think one of the reasons why the returns on offshore wind haven't been so high is that they are fairly big projects, and this suits large German pension funds, for example, which can invest in something both interesting and big. This means that with a manageable amount of work, they could invest a sizeable amount."

"At our company, we decided that we would rather invest in generally smaller amounts overall as to regulate risk, and we were willing to have a somewhat broader portfolio, which could also be of a more complex configuration," says Olejasz Larsen.

What makes it interesting anyway?

"Well, it's a hope and maybe also a hope that the flow of bigger projects being tendered might help to make reasonable risk premiums achieveable. This is not the same as the returns not going lower than what they were for the first offshore wind farms, but the market conditions were generally different back then. Other types of returns have declined in the meantime as well. It's a question of a relative evaluation of what kind of returns we can get. And a big supply is usually a healthy sign when you want to invest," he says.

Too much optimism about electricity prices

The market for offshore wind turbines has been thoroughly shaken by new players accepting lower returns than the traditional industry developers, such as Dong Energy, have previously conceded to. One example is the consortium consisting of Shell, Van Oord, Eneco, and Mitsubishi/DGE, which won a tender last year for the Dutch offshore wind farms Borssele 3 and 4 by only demanding a price of EUR 54.5/mWh. This is EUR 18 lower than what Dong Energy had won the tender with for the Borssele 1 and 2 farms.

Some developers accept lower returns. Could that put pressure on you if you enter this type of investment?

"No, I don't really think so, because I think that the effect will primarily be that there will be a bigger supply. The developers take a very large share as they finish the project and get it ready for the investor. That is probably where we will see pressure on profits to be made," says Sampension's CIO.

Have the declining electricity prices affected your appetite for offshore wind farms?

"Not really directly. Because this is reflected in what comes to the market. But it has affected us somewhat indirectly."

"One of the reasons why we haven't invested yet is probably that we found the expectations a little too optimistic when it comes to the future development of electricity prices. There is a whole new attention to the fact that electricity prices don't just go up and up," says Olejasz Larsen.

English Edit: Gretchen Deverell Pedersen

Sign up for our newsletter

Stay ahead of development by receiving our newsletter on the latest sector knowledge.

!
Newsletter terms

Front page now

Pension firms can play a significant role in steering companies into a more sustainable direction, says SPP and Storebrand Head of Sustainability, Johanna Lundgren Gestlöf. | Foto: Jonas Eng
AMNews

Two additional pension firms join the green club in Swedish sustainability rankings

Swedish unit-link insurance companies have undergone their annual sustainability assessment by insurance brokers, Söderberg & Partners. Several have moved up and down the rankings.
  • Alecta goes from amber to red in sustainability report
  • New sustainability report: Higher quality in fund offerings from Swedish unit-link insurance companies

For subscribers

Maunu Lehtimäki, CEO of Evli. | Foto: PR Evli.
AMWatch

Alternative sales grow and net flows start to stabilize at Finland's Evli

For subscribers

Speed is of the essence when launching new investment products, CFO Masih Yazdi says. | Foto: PR / SEB
Fund Management

SEB aims for speedy product launches to make up for huge AUM drop in 2022

For subscribers

Foto: Thomas Borberg/Ritzau Scanpix
Responsible Investing

Danes' equity holdings shrank by 9% in 2022

For subscribers

Foto: Shannon Stapleton/Reuters/Ritzau Scanpix
AMNews

Investors are missing earnings data after 2022 IPO collapse

For subscribers

Karl C. W. Mathisen fills position as head of equities at Folketrygdfondet on Feb. 1. | Photo: Folketrygdfondet
People

Folketrygdfondet finds new head of equities in own ranks

For subscribers

Further reading

Marlene Nørgaard Carolus has joined Formue as associated partner. | Foto: PR Formue.
AMNews

Norwegian wealth advisor to open Danish office

Formue, wealth consultant based in Norway, plans to open an office in Copenhagen, thereby gaining presence throughout Scandinavia.

For subscribers

Timo Löyttyniemi, CEO of the State Pension Fund of Finland (VER). | Foto: PR VER.
AMWatch

Finnish state pension fund looks at boosting private assets exposure

”Taking into account how large changes have been taking place in the world during the past three years, we have made surprisingly few adjustments within our portfolio,” says Timo Löyttyniemi, CEO of Finland’s EUR 21.3bn State Pension Fund. 

For subscribers

Jacob Schlawitz (left) is the CEO of Max Matthiessen. Mikael Tjäder (right) is the CEO of Fondab, which will soon become fully integrated with Max Matthiessen. | Foto: Max Matthiessen / PR - Fondab / PR
Fund Management

The core of Max Matthiessen's business "will always be insurance brokerage"

Max Matthiessen’s recent acquisition of Fondab will not be its last. The Swedish insurance and finance company aims to own more of the value chain, CEO Jacob Schlawitz tells AMWatch. 

For subscribers

Latest news

  • Two additional pension firms join the green club in Swedish sustainability rankings – 27 Jan
  • Investors are missing earnings data after 2022 IPO collapse – 27 Jan
  • Danes' equity holdings shrank by 9% in 2022 – 27 Jan
  • SEB aims for speedy product launches to make up for huge AUM drop in 2022 – 27 Jan
  • Alternative sales grow and net flows start to stabilize at Finland's Evli – 27 Jan
  • Folketrygdfondet finds new head of equities in own ranks – 27 Jan
  • Global clean-energy investments match fossil fuel for the first time – 27 Jan
  • Here is how Norwegian fund managers performed in 2022 – 26 Jan
  • Morgan Stanley fines its bankers over messaging breaches – 26 Jan
  • Slight recovery in SEB’s AUM in fourth quarter – but outflow continues – 26 Jan
See all

Jobs

  • Porteføljemanager til danske ejendomme i PenSam

  • PenSam søger en jurist med interesse for den finansielle sektor

Watch Jobs

  • Tilbudschef - NCC Renovering Vest

  • Senior Porteføljemanager

  • Scrum Master with a practical approach

  • Salesforce-udvikler eller -arkitekt

  • Business Intelligence Specialist

See all jobs

Jobs

  • Porteføljemanager til danske ejendomme i PenSam

  • PenSam søger en jurist med interesse for den finansielle sektor

See all jobs

Colophon

AMWatch
Search

Sections

  • Fund Management
  • Pension
  • Responsible Investing
  • People
  • Sitemap
  • RSS feeds

Editor

Anne Louise Houmann

alh@amwatch.dk

Tel.: +45 2830 5142

Editor-in-chief

Anders Heering

Publisher

JP/Politiken Media Group Ltd

Advertising

annoncering@infowatch.dk

Tel.: +45 7077 7491

Advertising

Job Advertising

job@infowatch.dk

Tel.: +45 7077 7491

Jobs

Subscription

Try AMWatch or get an offer for a subscription meeting the exact needs of you or your company.

amwatch@infowatch.dk

Tel.: +45 7077 7491

Learn more about subscriptions here

Address

AMWatch

Rådhuspladsen 37

1785 Copenhagen K, Denmark

Tel.: +45 3330 8382

Guidelines

  • Privacy Policy

Copyright © AMWatch — All rights reserved

Microsoft is in the process of discontinuing Internet Explorer – and so are we.
For a better experience, we recommend using one of the following browsers.

Kind regards,
AMWatch

Google ChromeMozilla FirefoxMicrosoft Edge