BpfBouw, the €54bn pension fund for the Netherlands’ building industry, made double-digit returns from commodities, private equity, property, and emerging market debt and equity in 2016.

The fund’s annual report for 2016 showed an overall net yield of 12.2%, in part thanks to a 1.8% return from its derivatives holdings. A 1.5% loss on its currency hedge was more than offset by a 3.3% profit on its interest rate hedge.

It achieved positive results on almost all asset classes, with the best results delivered by commodities (18.6%), private equity (15.2%), emerging market equity (14.9%) and emerging market debt (14.8%). Property gained 12.1%.

BpfBouw said its allocation to predominantly non-listed infrastructure projects generated 10.9%, citing the impact of low interest rates on the cashflows for its investments.

It attributed the 8.3% result of its hedge funds investments largely to distressed debt and relative value credit strategies.

BpfBouw’s opportunities portfolio – which invests in film and pharmaceutical rights as well as energy infrastructure – lost 15%, but was the only loss-making allocation. It said a revaluation of an “energy-related investment” was the primary cause of the loss.

The industry scheme said it left its strategic investment policy as well as its risk attitude unchanged last year, maintaining its strategic asset allocation of 42% fixed income, 27% equity, and 20% property.

It said it also kept the level of its interest risk hedge at 42.5%, in anticipation of possible stagnation in the wake of the UK’s decision to leave the EU. Its regular hedging policy provides for an increase if interest rates rise, and vice versa.

BpfBouw kept a full currency hedge in place for its fixed income investments, but reduced the currency cover for its equity holdings to 80%, as it deemed the currency risk for equity to be lower. It reduced the hedge even lower – 64% – for investments in the ‘safe haven’ of the US dollar.

Last year, the scheme increased its stake in green bonds from €155m to €298m.

It also said it had improved its governance by appointing two external experts for financial risk management, outsourcing policy and IT on its board.

BpfBouw said it had also tightened its requirements for strategic outsourcing partners. The measures were taken in the wake of an investigation by supervisor De Nederlandsche Bank into the pension fund’s investment policy and risk management, it said.

The pension fund posted administration costs per participant of €101. It said it spent 55 basis points on asset management costs and 11 basis points on transactions.

It didn’t grant any indexation and said that the inflation compensation in arrears had increased to approximately 7.5%. At June-end, its coverage ratio stood at 110.1%.

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