ABP, PGGM invest Dutch telecommunications networks
NETHERLANDS - The €220bn Dutch civil service scheme ABP and PGGM, the asset manager for the €91bn healthcare scheme PFZW, have committed to large investments in telecommunications infrastructure in the Netherlands.
Both organisations have been attracted as investors in the Communication Infrastructure Fund (CIF) that was set up by the €7bn pension fund for private road transport (Vervoer) and Bouwfonds REIM, a subsidiary of Rabobank, two years ago.
The CIF will lay out optic-fibre networks in conjunction with telecom providers, being the targeted users of the infrastructure.
Due to the new commissions, CIF will be able to invest as much as €750m in the Dutch telecoms infrastructure for the long term, according to Joost Goderie, the fund's managing director.
"Moreover," he added, "we have increased our potential through agreements for even larger investments, in part separated from CIF."
Martine Menko of the transport scheme Vervoer, which participated in CIF's initial investment in the network of regional telecoms firm CAIW, said: "We are expecting yearly returns of 11%, which don't correlate with other asset classes, for the next 10 years.
"During the first two years, our investment yielded approximately 14%, and we are very pleased with that result."
According to Menko, Vervoer intends to commit €75m to the CIF, which is expected to contain €350m within 18 months, compared with €130m at present.
The prospect of stable and long-term returns, in combination with a regular dividend, has been the main consideration for ABP to participate, according to spokesman Harmen Geers, who said the asset manager had committed itself to contributing approximately 30% of the fund's own assets.
"The CIF also has the right size to fit in our investment strategy, as we don't want to own a majority stake," he added.
He said the fact the CIF targeted the Dutch market was a bonus because "we know the fund, the telecoms networks and the potential users".
Geers said ABP had more than doubled its allocation to worldwide infrastructure to more than €1bn and still had funds available to invest in power plants, ports, toll roads and bridges.