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ABP looks to property and hedge funds

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NETHERLANDS – Dutch superfund, the NLG331bn (e150bn) Heerlen based ABP pension plan for Dutch civil servants and teachers, says it is considering increasing its allocation to real estate investment and will also shortly announce appointments to a number of hedge fund mandates as part of an e2bn hedge programme.

The announcements follow the fund’s presentation of its investment results for 2000 to the Dutch market yesterday (May 9).

Jean Frijns, CIO at ABP says the fund is not asking whether it is desirable to increase its real estate exposure, but whether it is possible to do so.
“ We are such large real estate investors that in the public market we have reached our limits. In order to increase our exposure either the public market has to expand or we have to look at unlisted real estate funds. This discussion has not been completed.”

Commenting on the new hedge fund exposure, Frijns says it fits ABP’s twofold approach to seeking higher returns.
“ We want to increase returns in two ways - firstly by changing the asset mix to 60% in equity and real estate and 40% in fixed income.
“ The second important element is the active alternative investment portion, which includes exposure to private equity and more credits.
“ We plan to have our first hedge fund mandate this year and we are well aware that setting up a portfolio of hedge fund mandates is a long route.
“ They are all small mandates and to have a large portfolio of small mandates it takes a long time to reach that.
Frijns says ABP could be looking at around e2bn in hedge fund exposure overall and that they are currently talking to managers in the arena.

The fund already invests between 1.5% and 2% of its portfolio in venture capital through NIB Capital Private Equity, the fund’s joint venture with fellow Dutch giant pension fund PGGM.

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