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Initiative against private equity firms may affect pension funds' returns on real estate

The Danish Minister of Housing Kaare Dybvad Bek (The Social Democratic Party) plans to weaken the scope of private equity firms in the Danish market for rental properties but his initiative may severely affect pension funds' investments in the asset class.

The Danish Minister of Housing Kaare Dybvad Bek (The Social Democratic Party) plans to weaken the scope of private equity firms in the Danish market for rental properties | Photo: Niels Christian Vilmann//

Should the Danish government successfully remove the article of the Danish act on housing regulation, which enables investors to renovate a property and subsequently increase rents, hundreds of thousands of Danish savers will pay a price through their pensions, writes Danish daily Berlingske.

Not only American private equity firm Blackstone currently makes use of this option; several pension funds purchase real estate with an objective to renovate and increase rent.

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