The Danish government's plan to invest DKK 50bn into its defence fund could provide a "strong starting point" for pension funds to find opportunities to contribute with private investments, Insurance and Pension Denmark (I&P Denmark) has said.

The Danish government recently announced plans to increase its military budget by a combined DKK 50bn over the next two years, as well as a reorganisation of the Danish Ministry of Defence, which is expected to help speed up investments.

I&P Denmark CEO, Kent Damsgaard, said that it is "quite obvious" that Denmark and Europe are facing a changed geopolitical reality, which also necessitates a significant strengthening of the defence.

"The new proposal for a defence fund of DKK 50bn over the next two years clearly emphasizes that the government is ready to start investing in a completely different order of magnitude than we have seen before. It is a clear signal."

Damsgaard also pointed out that several pension companies have seen good opportunities for investments in strengthening Danish and European defence, with a number of Danish pension companies already invested in defence companies worldwide.

Whilst he acknowledged that it is the individual pension company that, together with its customers and members, decides whether and how they want to invest in defence, he pointed out that several companies have expressed a positive attitude towards investing further in both the defence's properties, and specifically defence technology and equipment.

"The pension companies, of course, have the clear starting point that their investments must ensure the best possible return for pension savers," Damsgaard stated.

"However, several pension companies see good opportunities for investments in strengthening Danish and European defence, and the government's proposal today is a strong starting point for us to find some frameworks and opportunities for those pension companies that wish to do so to contribute with private investments in the defence area."

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