Investments in private equity yielded below-average returns for Dutch pension funds in 2025 although pension schemes nevertheless remain positive about the investment category.
ABP and PFZW, the two largest pension schemes in the Netherlands with over €700bn in assets between them, invest approximately 8% of the portfolio in private equity. They achieved a negative return of 4.2% and 4.9% respectively in 2025.
Bpf Bouw, the country’s fourth-largest scheme, also made a negative return on the asset class, which it declined to specify.
The pension fund of ING, a bank, reported the lowest return on the asset class among the 10 biggest funds, at -11.6% (although this figure also includes other non-listed categories such as private debt and infrastructure).
Several funds point out that private equity has been suffering from reduced appetite for acquisitions and mergers and a drought of IPOs.
“The valuation levels at the time of purchase have been high. Because the environment for selling has been disappointing, the return is low. That is the main cause,” said a spokesperson for Bpf Bouw.
ABP sees it that way, too. “Private equity still faces headwinds from the companies that were bought at a relatively high price at the end of the long low interest-rate period in the years 2019 to 2021. It takes longer before these companies can be sold at a profit,” a spokesperson commented.
Dollar decline
In the case of ABP, the fall of the US dollar against the euro also played a major role. “A large part of the private equity portfolio is quoted in dollars. In local currency, the return was around 5%. That is not yet what ABP expects from it in the long term, but it does offer a different picture.” ABP reduced its dollar hedge from 50% to 25% last year, making it more vulnerable to a declining dollar.
Because PMT and PME, the metals and technology industry schemes, have a higher currency hedge, at 75%, and invest relatively more in Europe, their returns have been better. After hedging PMT reported a 4.2% return and PME’s private equity portfolio returned 6.8%. Without currency hedging, PMT’s return would have been negative at -0.9%.
Venture capital
The pension scheme of TNO, the Dutch national technology institute, posted the best private equity returns in 2025 for Dutch pension funds. The return of +10.5% was the result of some positive revaluations following new funding rounds, according to CIO Hans de Ruiter. Another factor is that TNO invests about half of its private equity investments through venture capital and growth capital in very young, often fast-growing companies.
“In venture and growth, you occasionally make big hits,” said De Ruiter.
TNO had two such successes in the fourth quarter, which resulted in a major windfall. “The market for mergers and acquisitions is not doing well, which is why we are very happy that it turned out this way in 2025. We finally had another year when private equity outperformed listed stocks,” he said.
Outlook
Despite weak results, several funds remain positive about the outlook for private equity. The BpfBouw spokesperson emphasised that the fund does not make predictions, but that it is positive about the quality of its investments. “We believe that the companies are of good quality in terms of turnover, growth and profitability.”
ABP points out that stock markets have risen sharply. “That offers opportunities for private equity to catch up a bit.”
This article was first published on Pensioen Pro, IPE’s Dutch sister publication. It was translated and adapted for IPE by Tjibbe Hoekstra.
