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IPE special report May 2018

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Dutch pension funds invest 14% of assets locally – DNB survey

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NETHERLANDS – Dutch pension funds have invested 14% of their combined assets of €960bn within the Netherlands, according to supervisor De Nederlandsche Bank (DNB).

The DNB, which surveyed 30 schemes representing more than 80% of the country's pension fund assets, said €12.7bn – out of the €140bn invested locally – was allocated to Dutch mortgages, while €1bn was invested in small and medium-sized enterprises.

According to the regulator, the schemes' combined Dutch fixed income holdings amounted to €87bn, with €43.5bn invested in government bonds.

Credit and short-term loans counted for €14bn and nearly €17bn, respectively, whereas their combined portfolio of local property totalled €21.7bn.

The DNB said it conducted the survey in the wake of a public debate over whether pension funds should deploy their assets to revitalise the local housing market and help finance SMEs as banks tighten credit conditions.

But the regulator stressed that its focus remained on those investments that were in the interest of pension fund participants, as well as risk management.

Dutch pension funds have invested in residential mortgages and commercial mortgages, either directly or through mortgage-backed securities.

According to the DNB, pension funds invested €9.1bn directly into local residential mortgages, while approximately €1.4bn was invested in residential mortgage-backed securities.

Worldwide, Dutch pension funds have invested more than €297bn in equities.

Global holdings in private equity and hedge funds totalled more than €51bn and €32bn, respectively.

Global investments in fixed income came to €430bn, with €249bn and more than €122bn allocated to government bonds and credit, respectively.

The DNB said Dutch schemes' combined global stake in property and mortgages was €91.3bn and €30.6bn respectively.

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