PGGM, the second largest pension fund in the Netherlands, will double its concentrated risk investments in 2007, IPE has learned. Concentrated risks involve taking on part of the exposure of other institutions in return for an enhanced premium.

"The possibility to add part of somebody else's concentrated risk exposure, particularly [that] of financial institutions, to our diversified portfolio will grow in the coming year," said Jelle Beenen, head of the portfolio of strategies team at the €86bn Dutch pension fund.

"It is difficult to say how much in terms of assets, as in fact opportunities occur on a case by case basis, but I think it should be possible [to double assets] by the end of 2007," he added.

"We have done a few deals with banks that have certain concentrated risks because they have sold a lot of a certain [structured] products to perhaps the retail market, for instance structures similar to click [guarantee] funds," explains Beenen.

If the risk becomes too large, PGGM then takes on part of that risk, for which it is paid an "attractive" compensation. These are often risks that are not yet in the fund's portfolio.

Beenen also said catastrophe bonds, in which the fund started investing last year, are one of the strategies that might grow over time.

These investments are part of the fund's portfolio of strategies, currently valued at around 2.9% of the fund's assets, which is dedicated to investments in beta assets with an alternative risk profile.

The portfolio also invests in timber - a "long term investment, where most would say ‘this is not for us'," according to Beenen

PGGM also invested in clean technology this year together with ABP and is the seed investor of Albright Capital Management, an investment firm linked to The Albright Group, a consultancy firm chaired by former US Secretary of State Madeleine Albright.

The aim is to eventually invest a total of 8% of the assets in the portfolio of strategies. "Because it is a question of looking for new opportunities which are interesting enough, there is no set final point. Rather the opportunities need to be good," concluded Beenen.

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