APG to considerably expand illiquid investments unit

Dutch pensions manager APG will be hiring 50 new employees for its illiquid investments division over the next two years, according to Peter Branner, CIO of APG Asset Management.

The department currently employs around two hundred people in Amsterdam, Hong Kong and New York.

“Our customers such as Dutch civil service scheme ABP and the industry-wide pension fund for construction workers BPF Bouw would like to invest even more in illiquid categories like real estate, infrastructure and private equity,” said Branner in an interview with Dutch pension publication PensioenPro.

“If you want to invest more in the public markets, you can do that with the same number of investors who just buy more shares or bonds,” he added. “The situation is different for illiquid investments; you cannot simply put an extra billion in direct real estate, for example. To be able to do this, you have to find suitable properties and close deals – which requires extra people.”

The CIO, who joined APG in September last year from Sweden’s SEB, does not expect to have any trouble attracting talented young investors to work in Hong Kong, Amsterdam or New York. 

“People want to work here because we have a lot of knowledge and because we are leaders in the field of responsible investing,” he said. “We can grow and attract people. That is different in other parts of the financial industry. Banks regularly announce large redundancy rounds.”

“People want to work here because we have a lot of knowledge and because we are leaders in the field of responsible investing”

Peter Branner, CIO of APG Asset Management 

Branner acknowledged that salaries for this type of investor job are high, but said that although APG was a big player, in the investment industry it was just of many parties and therefore did not “call the shots” on pay.

“It’s a competitive global market in which we operate,” he said.

APG invests more than €514bn on behalf of its clients, of which more than a fifth in illiquid categories. An important driver of plans for more investment in these areas is the low interest rate environment.

“It is necessary to invest more in illiquid categories as the yield on government bonds is virtually nil,” said Branner. “You can’t just make up for that by investing in shares. Moreover, the outlook for equity is not that bright either.”