The €16.1bn Rabobank Pension Fund in the Netherlands is investing €50m in the Bouwinvest Dutch Institutional (BDI) Residential Fund, with the aim of stable and sustainable returns.
The corporate pension fund said it opted for the Bouwinvest fund, which had assets under management of €2.6bn at the end of 2013, because the two funds shared an aim.
Jos Dirks, Rabobank Pension Fund’s managing director, said: “We have the same objective, namely achieving a stable, sustainable return for pension fund participants.”
Bouwinvest manages property investments for the Dutch construction industry’s pension fund (bpfBOUW) and opened its three largest real-estate funds to other institutional investors four years ago.
Rabobank Pension Fund said it invested in real estate because the asset class was expected to produce stable returns and had “good diversification potential in relation to other investments”.
Property was also interesting as an inflation hedge, the fund said.
Bouwinvest said its residential fund held around 15,000 high-quality rental homes, mainly in the liberalised sector, and that it aims to generate a sustainable annual return of 6%.
Tenancy agreements in the Dutch private sector have been liberalised, allowing landlords more freedom in setting rents.
Bouwinvest said the fund’s long-term strategy and active asset management had produced a well-spread, well-maintained portfolio with a high occupancy level.
Bouwinvest’s chief executive Dick van Hal said: “The demand for medium-priced, liberalised rental housing in the Netherlands is considerably higher than the supply.”
The liberalised rental sector is a particularly interesting investment for pension funds because it provides stable quarterly income, he said.
The fund has no leverage and aims for a low-to-average risk profile.