Guido Verhoef has a rich history in institutional real estate and has been head of private real estate and Dutch pensions investment manager, PGGM, since 2008. This means he is responsible for a huge €12bn global portfolio consisting of approximately 150 non-listed funds, club investments and joint ventures that are managed by a dedicated team of investment managers.
But he has done much more than merely manage PGGM’s private real estate. He has turned it into an award-winning industry leading portfolio that continues to innovate and thrive.
Its current structure was established in 2010 for an indefinite period of time as a tax-transparent fund for joint accounts. It operates as a fund-of-funds and invests globally in both both semi-open and closed-ended funds, as well as in real estate companies, joint ventures and club deals.
PGGM’s private real estate strategy under Verhoef is run by an experienced team of private real estate specialists, which is subdivided into regional sub-teams with an European, Asian-Pacific or American focus in order to enhance insight in local real estate markets, identify local managers and select best-in-class fund managers and real estate operators.
In order to achieve superior returns the team attempts to add value by:
- constructing regional portfolios composed of high quality assets
- reducing risk through diversification based on geography, sector and/or investment strategy
- monitoring its investments proactively
- getting the best terms and conditions based on PGGM’s economies of scale
- optimising the portfolio through innovation
- integrating ESG in the investment process.
The investment process itself consists of three main components. Firstly there is the actual portfolio construction. Under Verhoef’s leadership, the private real estate team’s detailed strategy is updated annually and monitored quarterly, combining top-down allocation and bottom-up strategies and execution, based on in-house strategy and views.
Next is manager selection. Most of PGGM’s private real estate fund investments result from its direct network. However, given its size and reputation, PGGM also actively approaches prospective fund managers and joint venture partners to gain exposure to various segments. One overriding condition is that ESG factors have a material impact on the financial performance of the real estate investments and that it is the responsibility of the managers to capture the value and mitigate the risks related to ESG factors.
Finally is the investment monitoring and reporting. Based on its size, reputation and role, PGGM remains heavily involved in the governance and as a consequence plays an active role in the strategy and major decisions in its investments. As a result of this disciplined investment process and the way regional teams are set up, PGGM’s private real estate has been able to substantially outperform its composite benchmark since inception.
Verhoef studied economic geography at the University of Utrecht and real estate at the University of Amsterdam. He began his career as a real estate consultant in 1990. In 1995 he joined ING’s real estate development team as a senior developer. In 2000 he moved internally to ING’s real estate investment management as managing director of institutional clients. In 2005 he joined RABO Bouwfonds REIM as a fund manager before landing his current role at PGGM in 2008. In addition, he is a member of INREV’s Investor Platform Management Committee and sits on the board of the Association of Institutional Property Investors in the Netherlands.
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