Stockholm (HedgeNordic) – Two of Danske Bank Asset Management’s alternative investments-focused funds were reopened for new investments from institutional investors last year after being closed for new capital since their original launch in 2016. Both funds achieved their best year ever in 2021 after years of muted performance.
Danske Invest Alternatives – Defensive, a fund with €171 million under management that mainly invests in private credit and infrastructure, returned 7.8 percent last year after administration fees. Danske Invest Alternatives – Offensive, which takes on more risk in its quest to achieve a higher return by mainly investing in assets in the areas of private equity and infrastructure, booked a full-year return of 38.4 percent in 2021 after administration fees. The Offensive fund oversees about €330 million in assets under management as of the end of last year.
“We have intensified our focus on alternatives and are pleased to see it has paid off.”
“Alternative investments are an important area for us, as they both encompass attractive investment opportunities and can also help diversify risk in a portfolio of investments,” comments Thomas Otbo (pictured), CIO at Danske Bank Asset Management. “That is why we have intensified our focus on alternatives and are pleased to see it has paid off,” he emphasizes. “However, investors cannot, of course, expect an annual return in the order of 38.4 percent going forward – that is far above the norm.”
“Given the fund’s defensive risk profile, the 2021 return of 7.8 percent is at the upper end of what we expect going forward,” chief portfolio manager Michael Bech comments on Danske Invest Alternatives – Defensive’s 2021 performance. According to Bech, “last year our focus was on improving return via intensified investment activity, among other things, with investments mainly concentrated in private credit supplemented with an infrastructure investment to optimise the return profile and reduce risk by increasing diversification.”
“The return was driven by private equity investments in particular. We also, for the first time, undertook direct investments in individual companies through co-investments…”
Danske Invest Alternatives – Offensive’s return in 2021 “was driven by private equity investments in particular,” says the fund’s chief portfolio manager Jens Denkov. “Over the year, our focus has been on optimising the opportunities for return and having a high level of investment activity, especially in the private equity sphere, though we have also made selected investments in infrastructure and private credit,” he continues. “We also, for the first time, undertook direct investments in individual companies through co-investments, where we invest alongside capital funds, which tends to involve lower costs compared to investing via private equity funds.”