News

ATP looks for partners in private equity with the launch of its new fund

Torben Vangstrup, managing partner at ATP PEP, says the Danish pension giant ATP’s private equity arm is looking to add several hundred millions to its new fund from external investors.

The Danish pension fund ATP’s private equity arm is in the process of searching for eligble partners to invest in its new private equity fund ATP PEP VII. The move is unique for the Danish player which so far has been going about it alone in the private equity space with some EUR 10 billion of investments, making it one of Europe’s largest institutional private equity investors. Torben Vangstrup, managing partner at ATP PEP, tells FBNW that costs were one of the main reasons the pension fund decided to look for a partners this time around. “There's a lot of focus on costs at the moment and we saw this as a good way to maximise the cost benefits for us as well our potential partners,” he says.

ATP has seeded the fund with EUR 800 million and the private equity arm is now searching for partners to allocate a similar amount into the portfolio. “We're looking at teaming up with ideally two, or a handful of other institutional investors, preferably Nordic,” Torben Vangstrup reveals. However, he says that ideally the team is looking to add between EUR 300 million and EUR 400 million from external investors. “The EUR 799 million is a hard cap. We've decided to aim for EUR 300-400 million due to the strategy we have - and have been successful with - in the past as well,” he explains. 

The strategy follows those of ATP PEP’s previous six funds that have a special focus on private equity funds in Europe and North America along with co-investments with these funds. The other investors looking to join the venture will also be benefitting from ATP PEP’s arrangement with ATP, which dictates that the private equity arm can't profit from the fees. “We're not generating any profit from the management fee but the exceed, in case there is some, will be put towards next years' management fees,” Torben Vangstrup explains. He says that the pension fund is looking to charge seven basis points initially, which can then be adjusted to five basis points around five years into the programme. 

As part of the investment strategy, ATP PEP already in 2018 committed on implementing ATP’s stringent ESG and tax policy that, among other things, excludes investments with managers or investment structures that are not able to demonstrate acceptable transparency and non-agrressive fund structures in regards to tax.

Despite the ongoing search for external partners, ATP PEP VII will start investing with immediate effect once the appropriate permits and approvals have come through from the authorities. Torben Vangstrup says it is important for the fund to find like-minded investors who share the pension players strong ideals on ESG and tax, as well as the understanding of the overall strategy. “If this is something you see yourself committing to, then you’re the type of investor we're looking for,” he says.