PGGM, the €167bn Dutch asset manager, has acquired a 20% stake in Nordian Capital Partners, Rabobank’s former private equity company, now owned by its management.
PGGM bought the stake on behalf of its main client, the €152bn healthcare scheme PFZW, to increase its investments in the local economy, according to Eric-Jan Vink, head of PGGM’s private equity team.
The portfolio of Nordian Capital Partners – formerly known as Rabo Capital – includes 15 medium-sized companies.
Vink declined to provide details about its value, but industry sources have estimated it at €100m-200m.
The remaining equity in the company is equally shared by Rabobank (40%) and CommonWealth, the investment vehicle of the Dreesmann family (40%).
Separately, Vink confirmed PGGM has also invested in a new €300m Nordian investment fund targeting management buyouts at small and medium-sized companies with an annual profit of approximately €3m.
PGGM’s head of private equity said he expected the investment to return at least 11-12% over the next 10 years.
The asset manager’s average private equity return over the previous decade is 13.25%.
Vink said the investment in the Nordian fund would be a “proper contribution” to PFZW’s indexation target.
Currently, PFZW’s private equity holdings amount to approximately €8bn, while the scheme’s strategic allocation is 5%.
Vink said the transaction was entirely separate from PGGM’s investments through AlpInvest, the €61bn private equity investor jointly owned by PFZW and the €325bn civil service scheme until 2011, when they sold their stake to Carlyle and AlpInvest’s management.
At the time of the divestment, PFZW and ABP jointly committed themselves to €10bn of new worldwide private equity investments through AlpInvest.
Since the sale of AlpInvest, PGGM’s own private equity team has been focusing on local investments and managing PGGM’s relationship with AlpInvest, according to Vink.
In an earlier transaction aimed at supporting the local economy, PFZW agreed to share the risks on Rabobank’s €3.2bn corporate loans portfolio.
At the time, it said the deal allowed it access to a credit portfolio, diversifying the scheme’s investment mix for attractive and stable long-term returns.