Denmark’s largest pension fund, ATP, is staring down a hefty financial blow as Swedish battery company Northvolt’s bankruptcy casts a dark shadow. With a €308 million investment teetering on the edge, ATP’s bet on the green energy giant now appears to be a costly gamble.
Martin Præstegaard, ATP’s CEO, didn’t mince words when he confirmed that the pension giant’s significant stake in Northvolt had dwindled to “close to zero.” Speaking to Danish public broadcaster DR on December 16, he acknowledged for the first time that a substantial portion of Danish pension savings had essentially vanished.
ATP holds a 5% stake in Northvolt, translating to an investment of 2.3 billion Danish krone (€308 million). However, the collapse of Northvolt—marked by its bankruptcy protection filing on November 21—has rendered the value of that stake negligible. “By far most of the investment is gone,” Præstegaard admitted, though he refrained from disclosing an exact figure for the impending write-down.
ATP’s cautious approach to investment transparency took center stage. “It’s really stupid to tell those you negotiate with what you think it’s worth from the start,” Præstegaard explained. Still, he added, “It probably doesn’t take much imagination to figure out we don’t consider it worth much today.”
Reflecting on the Northvolt debacle, Præstegaard admitted it had been a tough but valuable lesson for ATP. “You have to be extra careful about throwing large amounts of money at new companies requiring heavy investments to get off the ground,” he said.
Mikkel Svenstrup, ATP’s investment director, echoed the sentiment, acknowledging that the Northvolt situation didn’t leave much room for optimism about the investment’s worth.
ATP, which supplements Denmark’s state pension system, was established in 1964. Funded by contributions from workers and employers, it typically invests most of its funds in low-risk securities, reserving a smaller portion for higher-risk ventures like Northvolt.
Other Danish pension funds, including PFA and Danica, also have significant exposure to Northvolt through loans worth over 800 million krone (€107 million) each, though both declined to comment.
Meanwhile, Goldman Sachs, Northvolt’s second-largest shareholder, has already signaled plans to write down its $896 million (€853 million) stake to zero by the close of 2024, according to the Financial Times.
As Northvolt’s collapse sends ripples through the financial world, ATP’s experience serves as a stark reminder of the risks tied to ambitious investments in emerging industries.
