Dutch pension fund APG to increase Asia allocation by €1bn

Algemene Pensioen Groep, the Dutch pension fund with approximately €250 bn of equity under management, wants to benefit more from the region’s growth story, according to a report by Bloomberg.

Dutch pension fund manager, Algemene Pensioen Groep (APG), plans to increase its exposure to Asia real estate as it seeks to capture some of the region’s growth.

According to a report by Bloomberg, the pension fund is to be particularly focused on the residential markets of emerging economies such as China and India.

The pension fund, currently manages approximately €250 billion of capital in total. It wants to increase its exposure to Asia real estate by €1 billion over the next three to five years, reflecting a percentage increase of 3 percent from 21 percent to 24 percent.

APG, which began investing in Asia in 1998, first in Australia, currently has about 80 percent of its assets in the region’s more mature markets such as Japan and Hong Kong and Singapore.

But APG head of strategic real estate at APG Investment Asia, Daan Van Aert, told Bloomberg he regarded emerging markets like China and India as the next stage in its investment strategy. He said: “When a country is growing and a middle-class is being established, you’ll see a huge number of people who need better quality, affordable housing.”

Van Aert, who was a speaker at the PERE Forum: Asia conference earlier this year, said the fund had witnessed a recent slowdown in China following government efforts to stem market bubbles but countered that was to be regarded a positive. He said: “[it] is healthy because it gives more room for sustainable long-term growth.”

APG has €1.5 billion is invested via private equity real estate funds and other types of private investments. This is less than the €2.5 billion it has invested in Asia listed real estate companies and investment trusts currently.