ATP, Denmark’s biggest pension fund with about $100 billion in assets, is doubling down on its investment in Danish obesity companies, increasing the country’s reliance on weight-loss stocks after a recent run-up.
All Danes are required to contribute to the state-run fund, which has benefited from its holdings in Ozempic maker Novo Nordisk. ATP added Zealand Pharma to its holdings for the first time, purchasing 317,000 shares over the past six months, according to the fund’s earnings statement released on Aug. 28.
Zealand Pharma shares have surged nearly 130% in 2024, and roughly ninefold since Adam Steensberg took over as chief executive officer in March 2022 with a sharpened focus on the company’s obesity pipeline. ATP’s head of equities, Claus Wiinblad, said he still sees potential in Zealand stock and the wider obesity market.
“We have to admit that we have been a bit late to investing in Zealand,” Wiinblad told Bloomberg. Still, he said, “obesity is a huge problem in most countries and now we are starting to see efficient treatments that appear to be in very high demand.”
ATP now owns 0.45% of Zealand’s outstanding shares, valued at 280 million kroner ($42 million), as of June 30. The pension fund also owns sizable stakes in Novo, which also makes Wegovy, and smaller contender Gubra, with total investments in Danish weight loss stocks now reaching 2.79 billion kroner.
That’s up 66% from the end of 2023, reflecting the asset manager’s growing confidence in the obesity market as well as a recent rally in the sector’s shares, Wiinblad said.
Gubra shares are up almost 350% year-to-date, while Novo Nordisk has jumped about 30%, boosting its market value to roughly $600 billion. By comparison, Denmark’s benchmark OMX Copenhagen 25 Index has risen 8.1%.
The outsized gains at Novo and Gubra have allowed ATP to take profits, trimming its stakes in both companies to rebalance the portfolio, Wiinblad said.
Danish pension funds are already flush from record returns on Novo shares, but Denmark’s growing exposure to the obesity market is not without risks.
Last year, Novo helped account for about half of Denmark’s economic growth, while the company’s market cap — now bigger than the entire Danish economy — has stoked concerns the Nordic country might become too entangled in the weight-loss story. Wiinblad said he believes ATP has a “good balance” in its Danish stock portfolio, but declined to comment on weight-loss drugs’ impact on the broader economy.
Claus Berner Moller, vice president at ATP, previously told Bloomberg that Novo’s massive success may ultimately enable Denmark to wean itself off the drug maker by cementing the country’s position as a leader in European pharma.
“This could make it easier in the future to attract capital and professional expertise from outside, which will help the entire industry and thus limit Denmark’s dependence on Novo Nordisk in the long term,” Moller said.
