Danish pension funds ATP, PKA, and PFA face scrutiny over substantial losses incurred from their investment in telecommunications company TDC. The sale of their 16.6% ownership stake to Australian capital fund Macquarie, coupled with additional investments made in TDC, has resulted in significant financial setbacks. While the exact loss figures remain undisclosed by the pension funds, estimates suggest the losses are substantial, raising concerns about their investment strategies.

The TDC investment highlights broader issues with the pension funds’ approach to alternative investments. Unlike investments in listed companies like Copenhagen Airports, the TDC venture, along with other unlisted investments in companies like Northvolt and Better Energy, exposes the funds to greater risks and opacity. The lack of transparency surrounding these alternative investments contrasts sharply with the readily available financial data for publicly traded companies.

The focus on financial losses overshadows a more critical issue: the questionable effectiveness of the pension funds’ active ownership. Despite claims of possessing deep insight into the companies they invest in, the performance of TDC and other ventures raises doubts about their ability to add value as active owners. The funds’ initial justification for investing in TDC, citing social responsibility and the desire to maintain Danish ownership, has seemingly waned in the face of poor financial results. Moreover, the Financial Supervisory Authority has raised concerns about the adequacy of pension funds’ policies for active ownership, including monitoring investments, engaging in dialogue, voting, and handling conflicts of interest.