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APG invests in different ways. From private investments to major listed companies. Needless to say, there is an idea behind that: our policy. What do and don’t we invest in? What requirements do companies have to meet? And does that always work out well? For these stories and backgrounds, click here.

Theme
Long-term investment
Collection Contents
3 Publications

Why does Dutch pension money pay off so well?

Published on: 27 November 2020

What catches the eye first in the OECD report “Pension Markets in Focus 2020” published earlier this month, is the investment returns obtained on pension assets in the Netherlands (in the second and third pillars, i.e. pension funds or insurers). With a return of 13.7 percent, the Netherlands was surpassed only by Ireland (18.5 percent). A superior performance? Ronald Wuijster tempers the enthusiasm: "The return from one year doesn’t mean anything to me. Our clients' obligations are long-term in nature, so APG also invests for the long term. The returns over five, ten and fifteen years are relevant to us".

 

Strong logic

In terms of average annual yield over a fifteen-year period, Colombia (6.2 percent), the Dominican Republic (6.8 percent) and Uruguay (5.2 percent) performed best. But the Netherlands and Canada were also among the global leaders with a figure of around 5 percent. This is not only due to skill.

Wuijster: "Certainly, we have a well-structured investment policy, we've given it a lot of thought via ALM (Asset and Liability Management, matching your investments to your short- and long-term payment obligations, ed.). We have a long-term orientation, well-targeted investment solutions, and we respond to sustainability. This quality as an investor certainly contributes to the strong Dutch performance over the past fifteen years. But that performance also has to do with the fact that Dutch pension funds are the only ones to have an interest rate hedge (a way of limiting exposure to the investment risk of falling or rising interest rates, ed.). This hedge is not mandatory in itself, but there is a very strong logic to applying the FTK".

 

Seriously contributed

The FTK (Financial Assessment Framework, part of the Dutch Pensions Act) stipulates the statutory financial requirements for pension funds. The guidelines of the Financial Assessment Framework (FTK) require a pension fund to assess its investments (and therefore also their risks) in relation to its obligations. For example, for a payment obligation that lies far in the future, you can take more investment risk now than for a payment you will be making next month. 

Wuijster: "As a result of the FTK, it is customary for a pension fund to hedge about 50 percent of the interest rate sensitivity. And that has been an unexpected factor that has seriously contributed to the investment returns of Dutch pension funds over the past 10-15 years".

 

In “Pension Markets In Focus 2020”, the OECD provides a global overview of the accumulated pension capital of the 37 member states and describes the most important developments. The most important financial indicators are listed, such as the total accrued pension assets, what these assets are invested in, and the returns achieved.

Volgende publicatie:
APG starts investing in Chinese shares

APG starts investing in Chinese shares

Published on: 19 December 2017

APG starts investing in Chinese equities for pension fund clients and their participants. The first 250 million investment will be realized in the very near future.

 

E Fund

The investments are being made in collaboration with E Fund, one of the largest investors in China. APG and E Fund exchange knowledge relating to asset management, ICT, and pension administration. The partnership with E Fund fits in with the strategy of APG and its pension fund clients to invest explicitly in sustainability and growth markets. APG expects to realize higher returns on long-term investments for its participants.

When selecting companies, APG and E Fund review both the risk–return profile and the sustainability criteria. APG makes direct investment without intervention of external parties, which keeps the cost of investing in Chinese equities relatively low.

 

Attractive investment opportunities

Gerard van Olphen, CEO of APG Group: “Smart and sustainable investment is a basis for a good pension for the participants of the pension funds. The Chinese economy is growing at a very fast rate, offering very attractive investment opportunities. The partnership with E Fund brings benefits to both parties. As a sustainable pension investor, APG brings in extensive ESG (environmental, social, governance) knowledge and experience. As a major Chinese investor, E Fund contributes extensive knowledge of the local market. APG aims to share its knowledge with other institutional investors in the future.”

Volgende publicatie:
APG and E Fund start Chinese equity fund

APG and E Fund start Chinese equity fund

Published on: 20 September 2017

APG and the major Chinese asset manager E Fund are launching an ESG fund that invests in Chinese equities. According to the promoters, this is the first of its kind.

 

"The collaboration with E Fund as a strong local partner makes it possible to invest in Chinese A shares and to apply ESG criteria," said Harmen Geers, spokesperson for APG. "The fund provides access to stock markets in mainland China. It invests in a limited number of companies. "

 

Currently APG does not invest in these shares. APG invests in Chinese companies through the Hong Kong stock exchange where many large Chinese companies are listed. APG customers initially pledged € 250 million. These pension funds view it as emerging market equities. APG expects the fund to grow even further in the coming years. A team consisting of investors from APG and E Fund is in charge of the new fund. When selecting companies, this team examines both the risk-return profile and the ESG criteria.

 

In a statement, Ronald Wuijster, cio ad interim of APG, states that the asset manager likes to act as a responsible long-term investor for his clients. "Our responsible investment approach combined with local knowledge offers unique investment opportunities in China." Wuijster expects the trend to invest more in China to continue and wants to share the knowledge gained with other institutional investors.