NETHERLANDS - The €2.2bn pension fund of giant Dutch food retailer Ahold has extended its private equity investments with a €140m fund of funds mandate to be managed by Credit Suisse.
The new mandate is part of the fund's drive to grow its private equity holdings and diversify them geographically by starting to invest outside Europe, namely in Asia and the US.
In its annual report for 2007, the fund said it would extend its alternative investment portfolio, which particularly focuses on private equity, from 2.6% at the end of last year to 5% in 2009.
The mandate will enable Ahold pension fund to create its own tailor-made private equity programme with the help of Credit Suisse's customised fund investment group managing the mandate, according to fund officials.
Erik Huizing, director of investments at the fund, told IPE today the mandate is a segregated account, and Credit Suisse will conduct all selection and monitoring.
"We particularly liked the collaborative nature of Credit Suisse's offering, with their private equity specialists working in partnership with Ahold pension fund to help develop our in-house expertise and ensure joint alignment of interests,"commented Huizing.
At the end of last year, the fund's alternative investments consisted of eight private equity funds, two mezzanine funds and one infrastructure fund, returning 11.5% in 2007. (See earlier IPE story: ‘Ahold scheme returns compensated by rising rates')
Credit Suisse said it has already been awarded a similar mandate from A&O Services on behalf of the painters, finishers and glaziers industry pension fund in the Netherlands.
Elsewhere, the ICI pension fund has awarded a £35m global high yield bond mandate to Muzinich & Company. The company says it already manages another mandate for the fund.
ICI said it has been a strategic investor in high yield bonds for over five years and now has around 2.5% of the fund invested in the asset class.
A spokesman for the fund added: "82% of ICI Pension's assets are invested in lower risk bonds to match pensions outgoings. The increase in high yield bonds moves the percentage of total assets in this class from 1% to 1.5% and the money came from equities."
It is designed to improve diversification and ICI Pensions felt comfortable with pricing of high yield bonds vs equities, he concluded.
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