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ABP increases infrastructure allocation

The €200bn pension plans to channel an extra €2bn for infrastructure investments over the next three years. Infrastructure funds are likely to benefit since ABP has no plans to invest directly.

Dutch pension fund ABP will boost its allocation to infrastructure to 2 percent between 2010 and 2012, according to its results for the second half of 2009.

ABP: an extra €2bn for
infrastructure

Depending on available opportunities, that should result in an extra €2 billion being allocated to infrastructure from 2010 to 2012, a spokesman said. In 2009’s investment plan, ABP specified that 1 percent of its capital should be channelled to infrastructure, although the spokesman declined to comment on what amount was actually invested in 2009.

He said the increase in infrastructure investments is a result of “our clients wanting more inflation-linked investments”. He declined to comment on whether the increased allocation would target any specific geographies, saying only that ABP invests worldwide.

The main beneficiaries of this increased allocation will probably be infrastructure funds. A spokesman said the pension has no plans to start investing in projects directly.

ABP has also increased its allocation for real estate investments by 1 percent, now dedicating 9 percent of the pension’s capital to the asset class over the next three years. Along with equities and corporate bonds, real estate was one of the fund’s best performers, ABP said in its statement. The amount invested in private equity will remain flat and is set at 5 percent of ABP’s capital from 2010 to 2012.

ABP, which had just over €200 billion in assets at the end of last year, recorded a 20 percent return on its investments during 2009 netting some €35 billion. The pension invests the majority of its funds in equities and bonds. It counts as its clients 2.7 million active and retired civil servants in the Netherlands.