Private investments

Private investments

APG invests part of the pension capital in private investments. Why invest in non-listed companies? What returns do they offer? What is their backstory? We will go into it here.

Long-term investment
Collection Contents
8 Publications

‘Equity goes from great to good’

Published on: 7 October 2021

APG investors on the latest financial market developments

Now that the worst of the pandemic seems to be over, the Western economies are picking up again. Higher interest rates are likely. Does this mean that the peak in earnings growth in the equity markets is behind us? And are western governments following China in their crackdown on platform companies? Like every quarter, economists and investors of APG examine financial market trends and developments in the. They share their vision in the Asset Management View.


Read the last edition of AM View

Volgende publicatie:
APG co-launches initiative to enhance ESG performance assessment in private equity

APG co-launches initiative to enhance ESG performance assessment in private equity

Published on: 30 September 2021

Private equity firms and investors launch 'ESG Data Convergence Project'


Some of the world’s largest private equity firms and investors have agreed on a first set of ESG metrics for private equity funds and underlying companies to report on. With the initiative, the launching partners, including APG, aim to increase the quality, availability and comparability of ESG data. Ultimately, this should promote sustainability in the private equity industry.


The 'ESG Data Convergence Project' is the first-ever collaboration between private equity funds and investors in these funds to standardize ESG metrics (ESG: environment, social & governance). Various major organizations are joining the initiative, which is led by CalPERS, the largest pension fund in the United States, and global private equity firm Carlyle. The founders, with total assets under management of over $ 4 trillion, call on other funds and investors to join. The more organizations report in a comparable way, the better the private equity industry can collect meaningful data and further sustainability.


A myriad of ESG standards

Until now, there was no generally accepted standard for the way in which private equity funds report on ESG. This makes it difficult for investors in private equity, such as APG, to assess and compare the various funds’ ESG performance. The aim of the ESG Data Convergence Project is to agree on a number of standard ESG metrics and to provide guidelines for technical measurement issues, such as how to determine investments’ carbon footprint. This gives investors such as APG a better insight into the investment risks and opportunities in their private equity investments.


Starting point

The initiative starts with six metrics: greenhouse gas emissions (scopes 1 and 2), renewable energy, board diversity, work-related injuries, net new hires and employee engagement. More metrics will be added later. A third party will aggregate the data into an anonymized benchmark. Investors can use this to compare the ESG performance of private equity funds with the industry average.



“On behalf of clients, APG has long been driving ESG transparency in private equity as a way to secure accountability for responsible investment performance in the asset class,” says Peter Branner, APG’s Chief Investment Officer. ”Through this collaboration, we expect to push towards comparable ESG performance measurement and wider adoption of ESG as an integrated objective of private equity investments. APG will use the metrics in its engagement with managers. While APG's ambition goes beyond the six metrics identified by the ESG Data Convergence Project, we are excited by the momentum generated, with data collection by private equity managers already underway.“

Volgende publicatie:
APG takes 20% stake in Sweden's largest district heating and cooling supplier

APG takes 20% stake in Sweden's largest district heating and cooling supplier

Published on: 1 July 2021

A consortium led by APG has acquired a 50% interest in Stockholm Exergi Holding AB. With close to 10 TWh in yearly energy sales and an annual turnover of almost €700 million, Stockholm Exergi (700 employees) is the largest supplier of district heating in Sweden. The company is an industry leader in sustainability and has the ambition to become climate positive by 2025.

The consortium also comprises of PGGM, Alecta, Keva and AXA Investment Managers. APG has acquired the 20% stake on behalf of pension fund client ABP, which wants to further shape its climate- and responsible investing ambitions. The consortium has bought the 50% stake from the Finnish energy group Fortum. Stockholm Exergi's 800,000 customers are concentrated in the Stockholm municipality. The remaining 50% stake is owned by the City of Stockholm.


Carlo Maddalena, Senior Portfolio Manager at APG: “The Stockholm Exergi investment is an excellent fit with APG’s infrastructure strategy and with its strong sustainability focus, it is at the core of the energy transition.”

According to Maddalena, Stockholm Exergi's fundamentals are very strong. “High temperature-driven heating requirements in Sweden, an AAA-rated country, cause district heating consumption per capita to be amongst the highest in the European Union. This makes district heating a nationally important core infrastructure for Sweden. In addition, Stockholm Exergi also supplies electricity to the local grid, which resolves many of its current capacity issues. The transaction was a unique opportunity to acquire a leading sizeable utility business in Scandinavia. Investments of this quality are scarce in the region."

International role model

The company's sustainability goals are very ambitious. "Stockholm Exergi has transformed itself to a fossil-free energy supplier and wants to become climate positive by 2025. To this end, it has already developed a number of projects, which are still at an early stage. This strategy is aligned to the commitment of the City of Stockholm towards becoming an international sustainability role model. As such, Stockholm Exergi plays an important role in these local – and national – climate ambitions."

The APG deal team that worked on the transaction was composed of Carlo Maddalena, Bart Saenen, Jan Jacob van Wulfften Palthe, Marjolaine Lopes and Silvan Koortens.


Read the Press Release.

Volgende publicatie:
“Transition to wood construction won’t happen overnight”

“Transition to wood construction won’t happen overnight”

Published on: 16 June 2021

APG is investing in over eighty thousand hectares of FSC-certified Chilean production forest. How do you arrive at such an investment? What does the market look like? And how does logging relate to sustainability? Six questions for Vittor Cancian, Senior Portfolio Manager Natural Resources at APG.

Why is APG investing in timberland?

“For an investor with sustainability ambitions, timberland is attractive because responsibly managed forests make a demonstrable contribution to achieving the Sustainable Development Goals. After all, trees absorb CO2 and FSC-certified timberland contributes to biodiversity.” 

From a return and risk perspective, timberland is a good investment for a pension fund because the return grows with the general price level. It therefore offers a natural hedge against inflation. Pension funds aim to have pensions grow in line with inflation as much as possible. So, it helps if the return on your investments also rises with the general price level.

Another advantage of timberland is that it adds diversification to your overall investment portfolio. The prices do not move much with developments in financial markets, as is the case with shares or bonds. So, if stock markets give slightly lower returns for a while, this need not apply to timberland investments. These two advantages – a hedge against inflation and diversification - also apply to farmland investments, for that matter.

The beauty of timberland is also that, depending on the market price of wood, you can delay or speed up the decision to cut trees. If in a certain year the price of wood is too low, you can wait for a better time to sell. The advantage is that the trees will continue to grow in the meantime, increasing their economic value. Or you can sell sooner if the price is right.


Would it not be even more sustainable to leave those trees growing in the forest?

“We only invest in production forests. That implies that at some point you also decide to cut the trees down. All our investments in timberland are managed in accordance with the FSC or a comparable quality mark. You only get this certification if you manage forests in a sustainable way. This includes the obligation to plant a new tree for every one that you cut down.

An older tree represents a higher economic value than a young tree. In addition, the CO2 absorption of older trees is flattened because they no longer grow as much. So, from a financial point of view, but also looking at the reduced CO2 absorption, it makes sense to cut down these trees and sell the wood.  Young trees, on the other hand, grow fast and need CO2 to do so. Selective felling and replanting therefore keeps the lungs of the earth vital. FSC certification also requires that you take care of biodiversity and pay attention to the social and economic impact on the area in which you operate.”

Wood construction is on the rise. Doesn't that also make a sustainability contribution?

If you start using wood construction as an alternative to concrete and cement, it definitely provides a sustainability advantage. The CO2 absorbed by trees is stored for a long time. The production of concrete and cement, on the other hand, produces a relatively large amount of CO2 emissions. If you really included that in the price, there would be a more financially favorable business case for wood construction.

We are seeing a development to build more with wood. In 2019, the world’s tallest wooden building opened in Norway (the Mjøstårnet in Brumunddal has 18 floors and is 85.4 meters high, ed.). In Amsterdam Oost, Hotel Jakarta is a good example. By 2025, one in five new houses in Amsterdam must be made of wood. But the construction industry is quite conservative.  The transition to more wood and less concrete will not happen overnight.

Exactly what kind of wood are we talking about and where is APG investing?

“In our timberland investments, we are dealing primarily with two wood types: softwood – such as, for example, Radiata Pine in Chile, Australia and New Zealand, and Douglas Fir in the US – and hardwood. The latter is primarily Eucalyptus but also other types, like Black Cherry and American oak for the furniture industry. Softwood is used primarily in construction. Eucalyptus wood is also used in the pulp & paper industry.

Will there be more investments like the one in Chile?

“That is our expectation. We are now moving towards a strategy in which we want to expand the current 1.8 billion Euros in timberland and agriculture to 3-5 billion Euros. The rest of the Natural Resources portfolio will gradually be phased out in a responsible way.

To find these kinds of investments, we doubled our team. These new people are based in Hong Kong or New York. It is important that they are close to the market. They have to feel the local dynamics and have their own local network. This is not only important for selecting the right investments, but it is also easier to manage such investments if you are close by. COVID-19 makes this a little more difficult at the moment, but we normally always go and have a look on site if we have our eye on an investment such as in Chile. We want to see the organization, the management and all the other aspects you want to assess to see what we are getting into.”

One of APG's co-investors in the Chilean forest said he had been looking for a promising investment of this size for almost a decade. Is there enough timberland to be found that meets your requirements, to be able to invest those extra billions?

“Yes, but opportunities to invest in timberland and access to the market vary from country to country. Australia and New Zealand, for example, have a well-developed timberland sector, with sufficient scope. Those markets are easily accessible for an investor and offer enough opportunities. In other countries it is a bit more difficult because the markets there are not yet so developed. In countries like that you often have to be more proactive and create a certain structure in order to be able to invest in timberland. Our investment in Chile is a good example. Together with two other parties, we set up a joint venture that acquired this production forest from Arauco.

Chile also has a well-developed timberland sector, but it is mainly owned by a few large companies that supply wood products to the construction industry - for example, MDF or OSB (both pressed from residual wood, ed.). To be assured of sufficient wood for their production, they also want to own the forests. So, they are reluctant to sell them. Arauco is one of those companies. But now the situation arises that these companies need capital to further invest in new production facilities. In order to get that, they sell sections of their forests to large institutional investors - often with the obligation to deliver a certain part of the wood to them annually. At the prevailing market price, of course. A great opportunity, in other words. The scope - this joint venture will be Chile’s third-largest timber producer - and the quality of the FSC forests Arauco have brought to the market are special, so the competition for this transaction was fierce. APG started investing in timberland back in 2007 so we are experienced in this sector by now. The same goes for our partners. We were therefore able to form a strong consortium fairly quickly and strike while the iron was hot.”

Volgende publicatie:
APG investments in Australian metropolitan rental apartments launched

APG investments in Australian metropolitan rental apartments launched

Published on: 17 March 2021

The joint venture that APG participates in to invest in Australian metropolitan new-build rental apartments, can start developing its first two projects. APG is founding investor for GAMV I (Greystar Australia Multifamily Venture I) and has already made a commitment of 350 million Australian dollars (214 million euros). Now that Canadian investor Ivanhoé Cambridge and Finland's Ilmarinen have also joined, the venture can invest up to 1.3 billion Australian dollars. This makes it the largest investor in this category of real estate in Australia.


GAMV I focuses specifically on the Australian build-to-rent sector. These are new build apartment blocks in world city centers, that have been designed and developed specifically for renters. The venture will develop it’s first two projects in central Melbourne before extending the portfolio to Sydney as well. Greystar plans to begin both of the first two projects this year, delivering 1,300 or more rental homes. As many as 5,000 dwellings could one day be held by the new venture.


World city centers
Graeme Torre, managing director of APG Asset Management Asia, explains why this market is so attractive: "This type of housing is already very well established in the centers of global cities outside Asia. In the United States, for example, BTR homes make up 11 percent of the total housing stock. In Australia, it's only 1 per cent. APG has been investing in the BTR sector for some time. In recent years, more and more institutional investors have become active in this market. In the United Kingdom, for example, the sector grew by 28 billion euros in the five years to 2019. APG has benefited from that popularity rise and in Asia we expect a similar development. That is why we finance the sector through partnerships in China, Japan and Australia, and investments in Greystar's operational platform in Asia.


We see it as simply a matter of time before the build-to-rent residential sector gains a foothold in all the key Asia-Pacific markets. So, it is no surprise to us that major investors such as Ivanhoe Cambridge and Ilmarinen have committed to the sector alongside APG in a sophisticated market such as Australia.”


Beyond economics

The strong conviction that APG has to this sector goes beyond just the economic attractiveness. Torre: “If we are all to have a chance of meeting climate goals, continued urbanization and more housing options are key requirements. ‘Build to rent’ is an essential asset class in meeting these requirements. This is one of the reasons why we have been actively targeting for increased exposure to the BTR-sector.”

Volgende publicatie:
“Enterprising investment is the name of the game”

“Enterprising investment is the name of the game”

Published on: 22 October 2020

As a long-term investor, how do you deal with the short-term developments in a rapidly changing world, resulting from Covid-19? How do you not get distracted by the issues of the day? Enterprising investment in real assets is the name of the game, says APG’s Ronald Wuijster, executive board member, responsible for Asset Management. This means direct investments, without intervention from financial markets. Wuijster spoke about this during the World Pension Summit, which is happening from October 19 to 23.  


An institutional investor like APG invests for the long term. That makes sense, because the financial obligations of a pension fund last well into the future. The advantage of this is that you have time to allow an investment to fully mature, if necessary. The returns do not have to be withdrawn from one day to the next. However, that does not mean that you can just ignore all short-term developments, especially if these are extreme developments, such as we are currently experiencing with Covid-19.


Big dent

Whether it concerns government bonds, shares, real estate or private equity, today’s expected returns have all fallen by about 2-3%, as compared to 2012. Wuijster: “That may sound like a modest decline, but over a period of several years, it signifies a considerable dent in invested assets. If you look at the causes of that decrease in returns in the past few years, roughly four factors emerge. Low productivity growth in companies and an increase in government, company and household debts. Those are the first two. In addition, during the past five years, the central banks have also pursued a monetary policy by rapidly buying government debt – to stimulate the economy. And the increasingly intensive search for investment that will still generate some returns, has also put further pressure on returns.”

Please note: this was the situation up until March of 2020. The outbreak of the Corona pandemic had a further accelerating effect on all four of these trends. In other words, the expected investment returns further declined, because of it.

Masks and medications

At the same time, Covid-19 is accompanied by several trends that you can take advantage of as an institutional investor, according to Wuijster. “The tendency of authorities to act with decisiveness and intervention is greater than the fear of getting into debt. This creates opportunities to invest with those authorities in projects that are aimed at softening the crisis. In addition, face-to-face meetings have rapidly decreased, which has a significant impact on retail, the office market and travel behavior. And that, in turn, provides interesting opportunities for investing in infrastructure, but also requires a re-orientation within the real estate portfolio: does it fit in optimally with these developments? What we are also seeing is that a development is occurring where particularly crucial production – masks, medications – are being ‘brought home’ again. That development, incidentally, had already started before Covid-19; the long value chains between, for example, China and Europe are seen as too vulnerable. As long as things go according to plan, it seems to work fine, but if just one little thing in the chain goes wrong, the consequences are huge.”


Another trend Ronald draws attention to is the boost that working remotely got from Corona. Because, once people are used to working that way, how small is the step to offshoring? Does that legal analysis really need to be done in Amsterdam, or can it also be done in Delhi? Services are becoming marketable at a furious pace, which may lead to a new globalization wave, Wuijster predicts.

The Corona age therefore brings its own investment opportunities with it, but it is also clear that as an investor, you seriously need to take into consideration the threat of a lurking financial crisis. 


The door remains closed

In a world in which safe assets with sufficient returns are really no longer available, “enterprising investment” is the name of the game for an institutional investor. These are direct investments, without the involvement of financial markets. And that is exactly why there are advantages for a big investor like APG. Wuijster: “Due to the scope of the invested assets and knowledge of local markets, there is access to such real assets, while the door remains closed to parties that don’t have the same large scale. That scope is also required for being able to monitor those direct investments, which is, of course, a much more labor- and knowledge-intensive process than investing in the stock market.”


Finger in the pie

These kinds of investments in real assets offer the opportunity to have a significant finger in the proverbial pie. Those strong governance rights are really essential for the further development of our real assets investment portfolio, as far as we are concerned. In addition, partnerships play an important role as does cost efficiency in the investment process. We must also be able to influence the sustainability and governance factors that are relevant for a specific investment,” Wuijster states.   

Volgende publicatie:
APG expands investment in South Korean logistics real estate

APG expands investment in South Korean logistics real estate

Published on: 23 April 2020

APG, Canada Pension Plan Investment Board (CPP) and ESR have entered into a strategic agreement to establish a new development joint venture with a total equity allocation of US$1 billion. The joint venture will invest in and develop industrial and warehouse logistics portfolio in the Seoul and Busan metropolitan areas, the two markets with the largest populations and highest consumer spending in South Korea.

The investment and development of a logistical warehouse in Bucheon, completed in 2018, is an example of an earlier collaboration. It is now used by tenants like Samsung, Chanel and Sisley.


Graeme Torre, Head of Real Estate, APG Asset Management Asia said: “Following the success of our first joint venture with ESR and CPP Investments in Korean logistics, we are delighted to be able to repeat the partnership. This will allow us to capture the next wave of growth and opportunity in a sector that even in these uncertain times, is demonstrating resilience. Throughout our global portfolio we look for investment opportunities that allow us to meet the long term return and sustainability objectives of our pension fund clients. With like-minded partners such as CPP Investments and the local execution expertise of ESR, this new venture is perfectly placed to do just that."APG, CPP Investments and ESR have agreed to initial investments in the joint venture in the amounts of US$350 million, US$450 million and US$200 million, respectively. The partners have allocation expansion options that could bring the total equity investment capacity to as much as US$2 billion over time.


APG provides Dutch pension funds ABP, SPW and ppf APG exposure to these Korean logistics real estate



Read the press release here.

Volgende publicatie:
APG sells part interest in portfolio of Iberian shopping centers

APG sells part interest in portfolio of Iberian shopping centers

Published on: 2 March 2020

As an investor of pension assets, APG has been investing since 2003 in prime shopping centers in Portugal and Spain. Together with joint venture partner Sonae Sierra, APG had a successful 50/50 partnership for many years. APG, on behalf of its pension fund clients, and Sonae Sierra have now decided to sell a 50% stake in this portfolio to Allianz and Elo. Together the four parties will form a new joint venture - Sierra Prime - to further support the development and growth of the portfolio. Allianz and Elo will pay an amount of EUR 525 million for this 50% stake.


“Over the last 17 years the assets have shown their strength and resilience. We are now pleased to be part of the creation of Sierra Prime, allowing us to retain exposure to these assets going forward, whilst bringing in Allianz and Elo, two respected institutional investors, as new partners to the venture. Together with Sonae Sierra, all four parties look forward to further support the development and growth of these prime assets,” said Robert-Jan Foortse, Head of APG European Property Investments.


The Sierra Prime portfolio includes three assets in Greater Lisbon (Centro Colombo, Centro Vasco da Gama, CascaiShopping), NorteShopping in Greater Porto, Plaza Mayor in Málaga and the recently opened McArthurGlen Designer Outlet Málaga.