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Impact Investing

IPE special report May 2018

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Dutch insurers prove local investment a 'responsible policy', minister says

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Henk Kamp, minister for the Dutch Ministry of Economic Affairs, has said the new National Investment Institution (NII) will offer pension funds greater options for investing locally in the Netherlands.

During the presentation of a concrete plan for the NII, Kamp, a former minister for Social Affairs, said the example of Dutch insurers showed that local investment could be a “responsible policy”.

Currently, Dutch insurers invest 43% of their assets in the Netherlands, whereas pension funds invest just 14%.

Investors from North America know this as well, Kamp said, adding that the US ambassador told the minister US investments in the Netherlands were larger than its combined stake in the BRIC countries – Brazil, Russia, India and China.

Kamp stressed the importance for schemes’ participants that pension funds and insurers invest locally, saying this boosted Dutch society and helped workers.

Diederik Samson, leader of the labour party PvdA, also called for additional pension fund investments in The Netherlands, arguing that an additional investment of 1% would benefit the local economy by €10bn.

When asked by IPE sister publication FD-IPNederland, Kamp said an additional percentage point of investment was not his final target and he declined to be more specific.

Encouraging pension funds to increase their local investments is a sensitive issue, as it involves private institutions.

According to Eloy Lindeijer, head of asset management at the €159bn provider PGGM, “forced investment” is one of the risks of the NII.

However, in the opinion of Jan van Rutte, the architect of the NII plan, the risks associated with the Institution would be no different than if it did not exist, although he conceded the risks could increase due to “publicity pressure” for local investment.

Another risk is that the NII, despite the support of institutional investors, cannot offer “sound investments”.

Lindeijer said he expected that it would take approximately three months before the NII could take off.

The Institution aims to offer its first investment in 2015.

The NII is considering issuing subordinated loans to small and medium-sized companies, as an addition to the NL Ondernemingsfonds, an initiative of the pensions providers MN and Syntrus Achmea in cooperation with banks and asset manager Robeco.

Readers' comments (2)

  • But, we also read: "Swedish government calls on AP funds to justify domestic investment bias".

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  • The minister should ask to be advised on the difference between insurance companies and pension funds. He will find that it is large and reflected in regulation, which in turn affects portfolios. Not understanding this vital difference is the reason for a number of examples of government mismanagement of the pension sector, notably by EIOPA and its predecessor, CEIOPS.

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