IPE Netherlands Briefing: Funds change asset allocation in new pension system

Civil service scheme ABP and the pension fund of the Dutch central bank DNB announced changes to their investment strategies upon moving to a new defined controbution (DC) arrangement.

ABP is to increase its allocation to infrastructure investments to 10% of assets while reducing exposure to listed equities and selling its commodity investments. Separately, ABP also sold its stakes in Alphabet, Tesla and Meta over governance concerns as it is reducing the number of stocks in its portfolio from 2000 to 1,100.

The DNB pension fund will reverse the matching versus return ratio of its investment portfolio, currently standing at 63% versus 37%, in its new DC arrangement that is supposed to come into force in 2026. The fund will sell most of its low-yielding government bond portfolio and up its equity exposure.

BlackRock under fire

The Dutch technology industry scheme PME is considering ditching BlackRock as its asset manager because of the firm’s “retreat from responsible and sustainable investing,” it said in an internal document seen by IPE. PME has appointed BlackRock as the asset manager for a money market fund and several index portfolios, with a total value of approximately €5bn.

In the internal document, PME noted that it has grown increasingly uncomfortable by BlackRock moving “in the opposite direction […] as evidenced by the withdrawal of its main entity from the Climate Action 100+ initiative and its recent exit from the Net Zero Asset Manager initiative (NZAM)”.

PME has sent a letter to BlackRock’s Netherlands branch inviting it to enter “a dialogue to understand BlackRock’s perspective”. Depending on the outcome of this conversation, PME will decide whether to ditch the US asset manager.

Asked to comment on PME’s step, BlackRock said its departure from climate initiatives does not impact the way BlackRock manages portfolios for its clients.

2024 returns

All of the five largest pension funds in the Netherlands achieved positive returns of between 7.5% and 8.7% in 2024, thanks mainly to double-digit gains on listed equities. For bonds, returns were significantly lower: ABP and PFZW even suffered losses on their government bond portfolios, despite falling interest rates.

ABP, PFZW, PMT, Bpf Bouw and PME all made returns of around 20% on their listed equity portfolios. These were somewhat lower than the 25% gain of the MSCI All Country World Index in euro terms, which can be explained mostly by the fact that the funds in question partly hedge their currency risk. The dollar rose by 6.6% versus the euro in 2024.

Items to note:

• The IPE Real Assets Seminar Series 2025 kicks off on 25 March in Amsterdam’s Koninklijke IGC

Tjibbe Hoekstra

IPE Netherlands Correspondent