Dutch pension sees real estate return 14.7%

Pensioenfonds Zorg en Welzijn, the giant Dutch pension with at least 88 private real estate fund commitments, has enjoyed a rise in fortunes as its property investments performed well in 2012.

Pensioenfonds Zorg en Welzijn (PFZW), the Dutch pension that looks after 2.5 million current and former care and welfare sector workers, saw its €15 billion real estate portfolio deliver a return of 14.7 percent in 2012. The figure is contained in a fourth quarter update just released by the €129 billion pension giant.

PFZW, which has a portfolio with at least 88 private real estate investments with managers ranging from AREA Property Partners and Perella Weinberg Partners in New York to Paris-based AXA Real Estate, said “equities and real estate performed well” as almost all investments across its asset classes posted a positive return for the full year 2012.

The result will come as somewhat of a relief to the pension, whose assets are managed by PGGM. One of the lowest points came in 2008 when the global financial turmoil caused a -8.1 percent return from its assets at the end of the third quarter.

There has been more evidence of a recovery for Dutch pension plans and their real estate portfolios. Felllow Netherlands pension ABP said it had generated €3.9 billion, or a return of 16.2 percent, on its property holdings last year. The relatively strong performances at the two pensions, however, are yet to help their funding ratios, meaning pension reductions are still on the menu.