PGGM has a long history of innovation in its investment policy. Significant innovations include:

• Investments business model
  The key to the business model is to think in terms of sources of return and risk, not asset classes. PGGM does not employ the traditional classification into equities, bonds and real estate and focuses its portfolio strategy and organisation on shared attributes within the beta, enhanced beta and alpha investment strategies.

• Portfolio of strategies
  The portfolio of strategies enables PGGM to capitalise on its strength as a long-term investor, generate a good return and reduce the risk on the total portfolio for its client. This diversified portfolio of innovative investment strategies, which systematically takes advantage of structural market inefficiencies, differs from other asset classes in that the usual terms such as ‘benchmark’ and ‘buy and hold’ no longer apply.

• Commodities
  PGGM was one of the first institutional investors in the world to include commodities in the investment portfolio. Commodities are raw materials used in manufacturing and other processes, such as oil, metals and wheat. Commodities often achieve the highest returns when other asset classes are performing less well. Commodity prices rise with increasing inflation (as do the liabilities), so in those situations, investments in commodities often generate high returns.

• Emerging markets
  Investing in other countries can generate extra return and may present a better risk/return profile for the overall portfolio, especially if the investments have ample growth potential. PGGM invests in emerging markets and Brazil, Eastern Europe and Asia are a normal part of the investment portfolio.

• Private equity
  PGGM was one of the first institutional investors to recognise private equity as an attractive alternative to equities. On behalf of its client, PGGM invests €3.4 billion in private equity via Alpinvest.