NETHERLANDS - BPF Bouw, the pension fund for Dutch construction workers, will offer other pension funds access to its €4bn domestic real estate portfolio so it can increase its weighting to global property markets.
BPF Bouw will maintain its 25% allocation to property - a far higher proportion than the industry average - but within it dilute its share in the portfolio and reinvest capital in non-listed real estate funds in Europe, the US and Asia.
The pension fund decided this would be a more efficient way of adjusting its real estate portfolio without having to dispose of directly held assets in the Netherlands.
Dutch assets make up roughly 80% of BPF Bouw's total real estate exposure, a level it plans to reduce to 60% over the next four to five years.
The direct portfolio will be transferred into three separate funds, containing office, retail and residential assets, respectively, which third-party pension funds will be able to invest in.
All three funds will contain core real estate and have a maximum level of leverage of 10%.
Bouwinvest (formerly BPF Bouwinvest), the wholly owned real estate investment arm of BPF Bouw, will manage the three funds.
Bouwinvest will also manage BPF Bouw's indirect international real estate portfolio, although it will not extend this service to other pension funds.
Dick van Hal, chief executive at Bouwinvest, said he was seeing interest from other
Dutch pension funds in the new proposition, particularly at a time when they were seeking stable investments amid volatile stock markets and low-yielding bond markets.
In terms of BPF Bouw's five-year timeframe to effectively double its exposure to global property markets, Van Hal said the pension fund would not be forced to invest in markets that were not deemed stable.
He cited Spain and southern European countries as markets where BPF Bouw would wait to see more stability before investing.
"If it is too dangerous to enter some markets, we will not do that," he said.
When investing internationally, the pension fund will continue to seek core investments
with low leverage, in line with its domestic investments, Van Hal added.
BPF Bouw already has €300m of capital to invest in international real estate in 2010.
Earlier this month, Bouwinvest appointed Jeroen de Grunt as portfolio manager for BPF Bouw's European and Asian investments.
He joined from KPMG Corporate Finance, where he was an associate director.