Dutch housing fund earns 31% on real estate

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NETHERLANDS - High returns on property were a main contributor to the 8.9% overall performance of the industry-wide pension fund for housing corporations, SPW.

However, due to increased interest rates, partial interest-hedging kept overall returns down by 1.9%, the fund said in its annual report.

Property yielded 31.2%, while equity and fixed income contributed 17.1% and 1.3% to the results respectively. Private equity and hedge funds returned 3.6% and 18.9% respectively.

Mainly because of the drop in oil prices, commodities yielded a disappointing -12.4%, SPW added.

However, rising interest rates also helped to raise SPW's coverage ratio from 126% to 146%, the scheme indicated.

Earlier, the funding ratio allowed the scheme to grant its 32,100 active participants a total indexation of 5.94% on future benefits, while its 17,200 deferred members and 11,000 pensioners were granted an indexation of 3.35%. At the same time, SPW decreased contributions by 1% as of 1 January.

SPW, the Stichting Pensioenfonds voor de Woningcorporaties, is an independent scheme. It has contracted out administration to €25bn pensions provider and asset manager, Cordares.

Jan Kloet, former head of SPW's administrative arm, who managed the transfer to Cordares and joined the company as corporate development director, left last month to set up an independent pensions advisory business.

Chessfield, based in Almere, will offer all-round consultancy although it specialises in asset-liability matching.

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