THE NETHERLANDS - PGGM, the second largest pension fund in the Netherlands, saw its assets increase by 4.1% to nearly €81bn in the last quarter of 2006, reporting a total investment return 11%.
Else Bos, chief investment officer at the Dutch health care and social work pension scheme, said: "Our fine 2006 result was due principally to equities and real estate, which together make up 58% of the investment mix."
Due to falling oil prices, commodities was the only asset class which ended the year with a negative return.
Nonetheless, Bos, who has recently been appointed as board member of Dutch corporate governance platform Eumedion, added: "Overall, this strong investments year has improved PGGM's cover ratio significantly."
At the end of 2006 PGGM was 133% funded, in comparison to 118% cover ratio earlier that year, as a consequence the fund's board decided to apply full indexation for 2006.
The fund commented that the ratio has been over 130% for more than eight consecutive months, adding: "This means that the minimum requirements met with the Dutch central bank (DNB) in the recovery plan have been reached. PGGM therefore recently asked DNB to waive the recovery plan."
With a performance of 9.1%, PGGM's investment in private equity (amounting to 5.4% of its entire portfolio) generated the highest returns, though equities, with a return of 7.4%, and real estate, with 5.3%, performed less well than in the third quarter.