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Impact Investing

IPE special report May 2018

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Profits surge at ABP/PGGM-owned NIB Capital

NETHERLANDS – NIB Capital, ABP and PGGM’s merchant banking venture, has recorded a net profit of 74 million euros, up 640% from 10 million euros in 2002.

“This increase in net profit is the result of the execution of our focused merchant banking business strategy, our investments in human capital and our cost effectiveness,” NIB Capital said in its 2003 annual report. Operating income rose 18% to 358 million euros.

The 2003 net profit includes non-recurring income of seven million euros, relating to discontinued activities. The 2002 figure included non-recurring losses of 26 million euros.

The group posted a 75% increase in commissions to 35 million euros, driven by the investment management activities of its majority-owned Zurich-based Harcourt Investment Consulting unit and higher corporate finance fees.

NIB Capital is 50-50 owned by civil service fund Stichting Pensioenfonds ABP and health care fund PGGM. The commercial activities of Dutch pension funds are currently under scrutiny following the report of the Staatsen Committee. The funds say curbs to their activities could hit returns and mean higher premiums.

“A year ago we unveiled our ambition to evolve into a leading merchant bank in northwest Europe,” said managing board chairman Michael Enthoven. “In this annual report you can read that we have taken our first successful steps towards attaining this goal.”

NIB Capital added that it sees more opportunities for its newly acquired FundPartners arm. “Business opportunities are on the rise as regulators are tightening pension investment regulations with a focus on liabilities,” NIB Capital said.

“FundPartners’ approach is different in two ways. Firstly, they are end-user oriented in providing product partnership solutions to institutional clients. Secondly, they apply an open-architecture approach by using services of specialty providers as building blocks for the products we deliver.”

NIB Capital bought 50.1% of FundPartners last September for an undisclosed sum. The rest stayed with PGGM and company management.

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