NETHERLANDS - Roderick Munsters, chief investment officer at the giant Dutch pension fund ABP, says there are opportunities to be had in declining private equity markets.
"The way the private equity market is developing at the moment is somewhat worrying, as there is so much money moving towards private equity, also from short-term players with new money," he said.
Calling them ‘hockey stick returns', Munsters suggested "it is certain that yields of this new money will be negative, the value will barely grow, but you still make costs".
Speaking about the fund's return expectations, Munsters predicts, however, his own fund's private equity investments to yield the most as he says "we expect to make around 10% per year on private equity".
Even in a declining market, ABP would benefit from private equity, says Munsters.
"The last time the market went down, around 2000, we saw that a number of players had to sell, which was sour for them, but for us it was a nice opportunity," said Munsters.
He added: "If the market did decline we would lose money but, on the other hand , wonderful buying opportunities are created, and we can buy the portfolios that others are forced to sell."