Stay informed with free updates
Simply sign up on Industry for pensions MyFT Digest – delivered directly to your inbox.
Dutch pension funds are ready to plow tens of billions of euros in risky funds in Europe, as their relocation to a system without fixed benefits supports the continent’s efforts to attract investment and strengthen its defense sector.
Reforms that are rolled in the Netherlands can lead to its 22 euros Pensions The industry – one of the largest in the world – boosting investment in private capital and credit investment by about 5 percentage points over the next five years, said the head of the largest manager of Dutch assets.
The “most” of the 100 billion euros is expected to be deployed in Europe because of “more attractive values” and the desire to have a “real -world influence”, Ronald Wujester, chief executive of Apg Asset Management, for the Financial Times.
He added that Dutch funds could be able to make “even more” to finance Defense The continent’s initiatives, saying that APG has already invested about 2 billion euros in companies that contribute to the defense industry.
Wiersster’s comments occurred when the EU was under pressure to collect defense investments with former European Central Bank President Mario Draghi last year calling The bloc to increase investment by 800 billion euros annually to keep up with the United States and China. US President Donald Trump has also urged governments to have more burden on Europe’s security.
“Earlier there was a penalty for private investment and the credit risk that is now declining, which increases the budget to take greater risk,” Wijersster said.
He added that reforms would allow investors to look at funds with a “slightly higher risk profile”, predicting an increase in percentage points “five” in risky assets, as well as greater distribution of private assets and credit spreads.
In 2023, Dutch senators adopt a law For the transition of the country’s professional pension system system in a model where pension funds no longer guarantee a fixed retirement income for members. The transition is expected to occur between 2025 and 2028.
The old defined benefit system imposes patterns in liquid, low risk, such as government bonds by demanding pension funds closely responding to long -term pensions.
The funds will now be able to set target yields that may vary with market movements, removing some responsibility restrictions and increasing risk appetite.
This was a significant step because “psychologically, it puts funds closer to regular investment in the life cycle … And to that extent, the Dutch pensions are probably taking too little risk,” Wijerstra said.
ABP, which is responsible for the pensions of Dutch civil servants and is by far the largest fund driven by APG with 544 billion euros, expects to move to the new system by 2027.
At the end of last year, just over a quarter of ABP funds were in private markets. About 40 % of private capital exposure was in Europe, which also had 57 % of its global distribution in private credit.
Wyster said this geographical balance could continue according to the new system and that changing private assets and credit would be a “very gradual process” that would “over the next five years”.
Source link
