Dutch ‘move to alternatives, emerging markets’

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NETHERLANDS – Dutch pension funds have moved more into alternative assets and emerging markets in a quest for market outperformance and diversification, says performance measurement firm WM.

“In their quest for alpha generation and risk diversification, it appears that Dutch pension funds have moved to ‘alternatives’ and emerging markets,” said Robert Rijlaarsdam, WM Performance Services Manager in the Netherlands.

The comments came as State Street subsidiary WM reported that the average scheme in its 122-strong ‘universe’ of Dutch schemes, made a real return of 8.6% in 2004.

The universe, which excludes the giant ABP and PGGM schemes, has a combined worth of around €180bn.

WM said schemes’ asset allocation “showed a slight increase in alternative investments relative to the previous year”.

It said: “The search for diversification has led to growth in the popularity of private equity, commodities and hedge funds.” It said the funds had a “growing appetite” for China and India.

Rijlaarsdam added: “The positive results of the last two years need to be viewed in context – the changing regulatory environment and the losses suffered at the beginning of the decade both continue to greatly impact the fortunes of many pension schemes.”

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