Dutch civil service scheme ABP has acquired a €2.7bn Dutch mortgage portfolio from an unnamed institutional investor. As a result, ABP’s investments in residential mortgages increased by more than 50% to €7.3bn.
The civil service fund was “relatively underweight” the asset class, said an ABP spokesperson. ABP had €533bn under management at the end of the third quarter, investing less than 1% of this in mortgages. After the purchase, this will be about 1.4%.
This is still much less than the exposure of most other pension funds. On average, Dutch pension funds invest about 5% of their assets in mortgages, according to data from regulator De Nederlandsche DNB. The company pension funds of PostNL and KPN even allocate more than 20% of their assets to the investment category.
ABP, which partly finances the purchase of its mortgage portfolio by selling part of its investments in corporate bonds, had already announced in its 2023 annual report that it planned to invest more in the Netherlands, including in Dutch mortgages.
“These are long-term investments with which we can make a difference in the lives of our participants,” ABP said at the time.
Commenting on this week’s transaction, ABP president Harmen van Wijnen said: “ABP is keen to invest in the Dutch mortgage market and with an investment of this size we are taking a big step forward in one go.”
He added: “This is good news because it provides attractive returns with low risk, thus contributing to a stable, indexed pension for our participants. Moreover, by investing in mortgages, ABP can contribute to the financing options of Dutch homebuyers.”
The mortgage portfolio purchased by ABP, one of the largest Dutch mortgage transactions in recent years, will remain on the mortgage platform of NIBC, a Dutch bank. This means NIBC will remain responsible for day-to-day contact with customers.
APG, ABP’s asset manager, will be responsible for overseeing and implementing the investment policy for the portfolio.
This article was first published on Pensioen Pro, IPE’s Dutch sister publication.
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