Investment Fund for Developing Countries backs Danish SDG Investment Fund II with DKK 2.7bn
Funding | Nov 20, 2024 | Investment Fund for Developing
The Investment Fund for Developing Countries (IFU), in partnership with four Danish pension funds—PFA, PKA, P+, and PenSam—has established the Danish SDG Investment Fund II, with an initial capital of DKK 2.7 billion. The fund aims to contribute towards the 17 Sustainable Development Goals by investing in the private sector across developing regions such as Africa, Asia, and Latin America. The fund is designed to attract private capital by providing protective measures to reduce risks, such as a newly signed EU guarantee. This collaborative effort seeks to achieve financial returns while promoting sustainable development, thereby continuing the legacy of the first Danish SDG Investment Fund initiated in 2018.
Sectors
- Private Equity
- Sustainable Development
- Pension Funds
Geography
- Denmark – The initiative is led by Danish institutions including IFU and major Danish pension funds.
- Developing Countries – The fund targets investments in developing regions such as Africa, Asia, and Latin America.
Industry
- Private Equity – The Danish SDG Investment Fund II is a private equity initiative, as it involves pooling capital for investments in private companies in developing countries.
- Sustainable Development – The fund is aimed at supporting the 17 Sustainable Development Goals, focusing on green transition and improving living conditions in developing countries.
- Pension Funds – The fund is partly composed of capital from Danish pension funds, highlighting the involvement of pension-related investment strategies.
Financials
- DKK 2.7bn – Initial capital commitment for the Danish SDG Investment Fund II.
- DKK 5bn – Target capital commitment for the Danish SDG Investment Fund II after second closing in 2025.
- DKK 535m – EU guarantee providing downside risk protection.
- 12-15% – Expected annual net return for the Danish SDG Investment Fund II.
- 6% – Preferred return for private investors in the fund.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| Investment Fund for Developing Countries (IFU) | Initiator and Organizer of the Fund | Company | IFU is a Danish investment fund focused on private sector investments in developing countries, aligning with sustainable development goals. |
| PFA | Investor | Company | PFA is a Danish pension fund participating in the Danish SDG Investment Fund II. |
| PKA | Investor | Company | PKA is a Danish pension fund contributing to the Danish SDG Investment Fund II. |
| P+ | Investor | Company | P+ is a Danish pension fund involved in the Danish SDG Investment Fund II. |
| PenSam | Investor | Company | PenSam is a Danish pension fund partaking in the Danish SDG Investment Fund II. |
| Ministry of Foreign Affairs | Government | Government | The Danish Ministry is associated with the fund as it is part of Denmark's contribution to Sustainable Development Goals. |
| European Union | Risk Guarantee Provider | Government | The EU provides downside risk protection for the investors in the fund. |