The €3bn pension fund for the technical research institute TNO in the Netherlands is planning to increase its allocation to private equity, its best performing asset class over the last decade.
Commenting on the scheme’s year-to-date return of 13.6%, CIO Hans de Ruiter said the pension fund was now reaping the rewards of investments made in recent years.
De Ruiter said private equity valuations had risen, as a consequence of repeated rounds of financing.
“In the wake of predominantly flourishing equity markets, investments also had good exits through listings,” he said.
De Ruiter said there was still much appetite for private equity investments and that the pension fund wanted to increase its current allocation from 6.5% to at least 7.5%.
He said the selection of managers would be crucial, “as only the best managers will deliver good results”.
He added, however, that he expected returns on new private equity investments would be relatively lower, “as current valuations are higher than they were a couple of years ago”.
In other news, the €25bn Pensioenfonds ING reported a year-to-date return of 15.8% on its combined allocation to private equity and hedge funds.
SPW, the €10.5bn pension fund for housing corporations, said its private equity holdings returned 12.5% over the first nine months of the year.
Last week, the €20bn pension fund PGB and the €5bn PNO Media reported year-to-date returns for private equity of 15.2% and 21.9%, respectively.