Pension duo invests EUR 460m in British electric train

Through their joint investment firm, AIP Management, PKA and Pensam acquire 30 percent of Agility Trains East, which leases trains to the UK's important eastern railway line. The investment secures stable revenue for the pension firms for 25 years.

Photo: PR/PKA

Danish pension companies, PKA and Pensam join forces to invest DKK 3.4bn (EUR 460m) in new trains for Britain's East Coast Main Line, which connects London with Edinburgh and Glasgow, Scotland.

The capital is being channeled through their jointly held investment company, AIP Management, and mainly pertain to electric trains as replacements for older diesel models that have thus far operated on the line.

This marks one of the UK's largest private-public partnerships, PKA and Pensam write in a press statement.

"We're proud to be able to invest in such a distinguished infrastructure project that not only makes public transportation more effective, but which also replaces old and inefficient diesel trains with new and primarily electric models on one of the UK's most important railway lines," writes PKA Chief Investment Officer Michael Nellemann Pedersen in the media release.

PKA is backing 75 percent of the investment, while Pensam is laying the remainder.

Acquires 30 percent of train leaser

The railway is one of Britain's busiest national train lines. Each year, more than 22 million passengers travel on the route, which functions as the main transit connection between larger cities such as Leeds, Newcastle and Glasgow.

"The investment is very well suited for what we at PKA and Pensam aim to achieve, because it both secures a stable, long-term return for our members while also making a positive impact on the environment," Pedersen adds.

30 percent of Agility Trains East, the train fleet's owner and leaser, is now held by the two Danish institutional investors.

Steady revenue secured until 2046

PKA and Pensam also join a consortium along with Japan's Hitachi, which supplies and services the fleet of trains.

"I'm very pleased with the strong partnership between Pensam and PKA that secures a solid investment in substantial infrastructure. This contributes to fine pensions for the welfare state's front-line foot soldiers – for instance, social and health workers and nurses – and also extends a helping hand to the solely needed electrification of a central line in the UK's rail network. It's sensible," Pensam CIO Claus Jørgensen says in the statement.

The trains will be leased out the London North Eastern Railway, and the British Ministry of Transportation ensurers the owners a stable lease income on the train fleet until 2046.

(This article was provided by our sister media, FinansWatch)

English Edit: Daniel Frank Christensen

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