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ABP’s Munsters hails €300m hedge fund profit

NETHERLANDS - Roderick Munsters, chief investment officer of the €200bn Dutch civil service pension fund ABP, has hailed the fund's profits from its hedge fund investments in a TV programme.

The comments came as a survey found that Dutch pension funds have invested around €15bn in hedge funds and private equity.

Munsters told Dutch television programme Rondom Tien last week that ABP already has a profit ("winst") of more than €300m from its hedge fund investments.

"[By investing in hedge funds] we receive higher returns and throughout the years we also get more stable returns, and that is very attractive," Munsters said.

Dutch pension funds had already invested about €11bn in hedge funds at the end of 2005, according to a study conducted by Dutch newspaper NRC, published on Saturday.

In the study ABP appeared as the largest investor, with just above €6bn of its by now €200bn portfolio invested in hedge funds at the end of 2005. Number two is Bedrijfstakpensioenfonds Metaal en Techniek with €1.12bn, and third is the Dutch Shell pension fund with about €1bn invested in hedge funds.

The news comes amid worries about what are termed in Dutch ‘dare capitalists': large, often foreign investors which buy into Dutch firms, in order to reorganise them and sell them to make a quick profit.

Trade unions are particularly worried about the investments by these pension funds, and Dutch trade union FNV Bondgenoten last week called for restrictions under which pension funds can invest in hedge funds.

The union thinks that pension funds such as ABP and PGGM should take a more serious look at the negative effects that some of these dare capitalists have on Dutch businesses.

FNV chairman Henk van der Kolk is very critical about the role that hedge funds play in the Netherlands.

In an interview with the Financieel Dagblad on Saturday he argued that they cause unrest, saying: "Their goal seems only to earn in the shortest possible period by buying, splitting and selling (parts) of companies."

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