Several Dutch pension schemes, including ABP and PFZW, have suffered losses on their private equity and infrastructure investments over the past six months, as a result of the coronavirus crisis.
The picture is less dramatic with real estate and the type of properties in which money is invested in plays a major role. Mortgages have managed to keep afloat, but the question is for how long, Pensioen Pro reported.
Towards the end of the second quarter of 2020, industry experts said private equity investments in retail chains and the tourism sector were struggling, while for infrastructure, everything to do with transport, such as airports and toll roads was also in dire straits due to global lockdown measures.
The picture is confirmed in the figures of major Dutch funds, published at the end of July. In the first half of 2020, ABP lost 8.1% on private equity, while its infrastructure portfolio returned -5%.
PFZW posted -10.8% and -3.1% for private equity and infrastructure, respectively. In comparison, the return on shares at ABP and PFZW was -5.9% and -7.3%, respectively.
PMT and PME do not publish separate figures for private equity and infrastructure in their quarterly reports.
In private equity, sectors such as healthcare, online services, telecom, gaming and some pharmaceutical companies benefited from the coronavirus woes.
In private real estate, the returns on residential and healthcare real estate were mostly positive.
These compensated for the blow for shops and other retail areas, where payment arrangements with tenants saw low income flows.
Private real estate at PFZW returned -1.2% in the first half year, while PME posted a 1.4% return. Residential investments returned positively (3.4%), while shops ended up in the red (-2.4%) for PME.
At ABP (-12.9%) and PMT (-8.2%), the returns on private and listed real estate were lumped together. PMT reported that the return on private real estate was slightly positive, mainly due to the returns on residential investments.
Mortgages still achieved a positive return in H1 2020. PFZW’s return came in at 0.5%; however, the second quarter was -1.2%.
This picture also applies to the 30 pension funds that invest in Aegon Asset Management’s Dutch Mortgage Fund 2: 0.67% in Q1 to -1.3% in Q2.
For future returns on real estate, private equity and mortgages, the question is also how long the current crisis will last and whether new lockdown measures will be introduced if a second wave presents itself.