The €1.2trn Dutch pension market is consolidating and diversifying. Rachel Fixsen and Leen Preesman profile five of the biggest funds 


Total AUM: €205.8bn (31/12/06)
Real estate allocation: €24.3bn
Infrastructure allocation: €7.5bn
Head of private investments: Frank Roeters van Lennep

The €206bn PGGM, the asset manager of the €186bn healthcare scheme PFZW, has focused on investments in telecommunications towers, distribution centres, offices and solar energy during the past 12 months.

In October, it formed a joint venture with American Towers Corporation (AMT) to build telecom towers in Europe and lease out telecom capacity. AMT, which already had operations in Germany, will transfer these to the joint venture – dubbed ATC Europe – in which PGGM will own a 49% stake.

ATC Europe has since bought FPS Towers, the owner and operator of 2,400 French telecom towers. PGGM indicated it expected stable long-term returns, but declined to provide details about scale of the joint venture or expected returns.

In March, PGGM invested €150m in the construction of two sustainable distribution centres in Osaka and Tokyo. This was through a co-investment with e-Shang Redwood (ESR). It came in the wake of a €200m investment in similar Japanese objects.

frank roeters van lennep

According to the firm, the investment was in anticipation of a “very dynamic” market for both logistics and e-commerce in metropolitan areas with a shortage of earthquake-proof facilities. It said that both projects would generate “attractive returns”. So far, PGGM has committed €736m to its strategic partnership with ESR.

In December 2016, PGGM entered a €250m French office joint venture with Foncière Atland. The partnership will target office markets in Paris and the Ile-de-France region, and focus on properties offering potential through re-letting, lease re-gearing, refurbishment and redevelopment.

PGGM said the objective was to create properties that become core assets, with strong long-term income return characteristics and low carbon footprints. Its first asset – 38 Rue de la Republique – was bought for an undisclosed sum.

In May, the asset manager purchased a €200m stake in a portfolio of solar panels run by Tesla-owned energy provider SolarCity, the largest player in the US. With the investment, PGGM became co-owner of solar energy systems at 38,000 households across 21 US states, with a combined capacity of 275 megawatts.

dutch pension funds managers

Returns will come from rental income, maintenance contracts and financing, and are set to match infrastructure yields, according to PGGM. It said returns from the direct investment would be “proper, stable and for the long term”.

The asset manager indicated that it was its first investment in the aggressive and expanding market of decentralised energy generation. It pointed out that the investment fitted into its growing portfolio of private investments focused on sustainability.

At the end of 2016, PGGM’s listed and private property comprised 5.5% and 6.3% of its assets, while infrastructure represented 3.6%. PFZW’s listed and private property comprised 5.9% and 6.4% of its assets, respectively, returning a net yield of 4.5% and 10.6%, respectively.

Infrastructure (3.8%) generated 7.3% in 2016. Year-to-date, property and infrastructure delivered -1.4% and 1% respectively.


Total assets: €450bn (01/07/17)
Real estate allocation: €45bn
Infrastructure allocation: €11.25bn
Global head of real estate and infrastructure: Patrick Kanters

patrick kanters

APG, the manager of the €389bn Dutch civil service pension scheme ABP, has allocated 13% of its reserves to real assets. The bulk is in property, for which APG has had a 10% allocation since the global financial crisis. This is followed by infrastructure, which stands at 2.5%, the remainder is its natural resources fund.

APG is to award mandates in all three areas in the next 12 months.

The real assets is a high-yielding diversifier for the portfolio. APG looks to use its long-term investment horizon to profit from trends such as urbanisation and e-commerce, as well as contributing to responsible investment and sustainable development targets.

The real assets are split between Europe, Asia-Pacific and the Americas, with weightings of 45%, 21% and 35%.

It uses a range of ownership structures, which it believes provides control and the ability to scale up investments. Patrick Kanters, global head of real estate and infrastructure, says: “Very often we execute develop-to-own strategies through investments in both corporate structures and joint ventures.”

APG is looking to access best-in-class managers via either listed or non-listed routes. “The key in our strategy is to have control over the decision-making either related to new acquisitions or, for example, termination options,” says Kanters.

APG has developed a diversified global infrastructure portfolio through mandates, joint ventures and direct investments. It plans to increase the portfolio to 3% of total assets, as demand from pension fund clients increases.

“We prefer to manage sizable direct stakes,” Kanters says. “However, we are not abandoning discretionary funds while pursuing niche strategies.

“The infrastructure strategy is not bound to sectors, but we are focusing on limited exposure to economic cycles, energy transition and growth in markets at a greenfield stage.”

APG’s natural resources fund has focused on fund investments. It plans to expand its exposure to natural resources gradually to bring it in line pension funds’ appetite — potentially through a buy-hold approach and partnering with likeminded investors.


Total assets: €67.4bn (30/06/17)
Real estate allocation: €6.1bn
Infrastructure allocation: €500m
Chief investment officer: Inge van den Doel

inge van den doel

The €67.4bn PMT fund has committed €400m to affordable rental property investments over the next four years. The investment will raise the scheme’s holdings of residential property from 4,500 to 6,500 units, is aimed at its memebership and is meant to benefit the metal and mechanical engineering sector.

The pension fund says it targets the group that does not qualify for social housing, but cannot afford non-regulated rental property or to buy a home. According to MN, PMT’s manager, returns are expected to be similar to non-regulated rental housing, because of the risk profile, low vacancy level and low costs.

PMT has a €750m portfolio of residential property. Almost 45% is in the affordable housing, with monthly rents of €630 to €900. It said it would continue improving the sustainability of its property holdings.

PMT’s newest project is B’Mine, a apartment building in Amsterdam, with one-third of the 147 apartments having a monthly rent between €630 and €940. The scheme has completed similar projects in The Hague, Diemen, Delft and Zaltbommel. It wants to increase its stake in such projects, in co-operation with local councils and housing corporations.

Together with Koopvaardij – the €3.9bn pension fund for the merchant navy, also co-owner of MN –  PMT has established a website showing locations in the Netherlands where both schemes invest in affordable housing. PMT’s allocation to residential property amount to approximately 50% of its Dutch real estate holdings.

Last year, PMT committed €50m to a fund investing in onshore wind farms and solar farms in western Europe as an impact investment. It said the fund – run by SUSI Partners – was aimed at obtaining majority equity stakes in renewable long-term energy infrastructure projects.

The pension fund’s infrastructure allocation totals €500m, divided across European and US funds. Holdings include toll roads, railways and power distribution.

PMT has allocated 9% to real estate, including non-listed European property through funds and global listed real estate. During the first six months of 2017, property returned 1%. Last year, it generated 6%.


Total AUM: €53.8bn (20/07/17)
Real estate allocation: €8.5bn
Infrastructure allocation: €215m
Chief executive of Bouwinvest: Dick van Hal

dick van hal

BpfBouw, the €53.8bn pension fund for the building sector, said it would increase its allocation to healthcare more than tenfold during the coming years. In its 2016 ESG report, it stated it would raise its €47m portfolio at year-end to €500m. At the time, it had €56m of projects under construction or redevelopment. Its Healthcare Fund returned 4.9% last year.

BpfBouw has allocated 20% of its assets to real estate.

Bouwinvest, the pension fund’s €8.5bn property investor, reported an overall return of 12.1% over the past year, the highest since 1952. It attributed this to its residential property portfolio, focusing on high-quality and sustainable new real estate in the non-regulated sector in Dutch cities. Its €3.9bn Dutch Residential Fund generated 20.5%.

Bouwinvest’s assets under management rose by 13% last year. It expects assets to continue to grow during the next three years, generating long-term annual returns of 5% to 7%. The investor’s €778m Institutional Retail Fund saw its returns double to 8.4%, while its Hotel Fund yielded 14.2%.

The €503m Dutch Office Fund generated 5.5%, an underperformance of 270bps. Currently, Bouwinvest is restructuring its office portfolio and expects returns to pick up once completed.

Last July, Bouwinvest committed €100m to the Hines Pan-European Core Fund, extending its allocation to core European retail and office markets. It said it wanted to benefit from resurgent growth in European economies, adding that its commitment tallied with its strategy to increase its international investments from 35% to 40%. It said it was aiming for greater risk diversification across geographies and cycles while optimising returns.

In January, Bouwinvest invested an additional €28m into upmarket student housing in Australia, taking its stake to €80m. With this new commitment, the investor has taken the second-largest stake in Scape Australia, which has Chinese ICBCI as a co-investor. It expects returns of at least 10%, similar to the yields of its earlier investments in Australia’s retail and office sectors since 2012.


Total AUM: €46.5bn (31/12/16)
Real estate allocation: €3.5bn
Infrastructure allocation: €418m
Executive director, asset management: Marcel Andringa

marcel andringa

PME, the €46.5bn pension fund for the Dutch metal and electronic engineering sectors, prefers to  directly invest in real estate, but has created a portfolio approach to allow different investment routes.

In its domestic property investment, it invests mainly directly. In the rest of Europe, it deploys capital through club deals, and both closed-end and open-ended funds.

The fund’s strategic allocation to real estate is 7.5%, and is targeting a net return for real assets of between 6% and 8%. Two-thirds of PME’s real estate allocation is for domestic assets and the rest Europe.

Real assets is considered the low-risk part of a return portfolio and meant to deliver returns with preferably zero leverage (it is limited to 40%) in Europe. The fund is shifting towards core real estate and away from opportunistic investments.

Plans for the next year include expanding the Dutch and international real estate portfolios, with a focus on steady returns, low costs and sustainability.

PME aims to bring 10% of its portfolio in line with the sustainable development goals of the United Nations. All of its Dutch investments and new international real estate investments are now committed to the Global Real Estate Sustainability Benchmark.

It wants to deploy €200m in direct Dutch real estate over the next year, but is fully invested in international strategies until April 2019. After then, it has another €400m to allocate to managers.

The focus is on the Netherlands and western Europe; the sectors it is considering are residential and retail in the Netherlands, and offices, retail, logistics and housing across Europe. PME wants to invest both directly and in funds. “It’s only through this combination that you can actually achieve the quality. The Dutch market becomes more international and more structured and has to be played also by means of non-listed structures,” says Andringa.

PME’s approach to real estate differs from other funds. “We have a bias for real estate in the Netherlands, our ticket size is larger than average and our cost base is as low as you can get,” he says.