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Danica targets junior debt of unlisted companies as part of alternatives focus

Jesper Langmack, Danica Pension's investment director for risk assets, believes junior debt — which falls lower in the bankruptcy pecking order than senior debt — can provide the Danske Bank pensions subsidiary with returns that are attractive, despite the extra risk.

Jesper Langmack of Danica. | Photo: PR

As part of Danica Pension’s investment strategy to add more alternative investments to its overall asset mix, the Danske Bank pensions subsidiary has turned its sights on riskier forms of corporate debt — in particular the junior debt of unlisted companies and preference shares.

Jesper Langmack, investment director in charge of risk assets at Danica, says: “Junior debt is loans to companies, and for us, it is a good opportunity to get an attractive return in relation to the risk, which we believe is involved in granting the loans.”

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