Private Equity

Private equity is an important investment category for PGGM to realize a sustainable and valuable pension for participants of our pension fund clients, including our main client PFZW. The risk profile of investing in private equity is generally higher than for other asset classes, but private equity generally also generates higher returns. PGGM’s private equity objective is to outperform the public markets by 2.5%, which we have exceeded historically.

While the private equity portfolio is well diversified, the majority of investments are in developed countries, primarily the US and Western Europe, with a focus on buyout investments. The underlying investments in the portfolio are broadly diversified across sectors, with particularly significant exposure to Information Technology, Industrials, Consumer Discretionary, Health Care and Financials. Note, however, that we are in principle sector agnostic.

History

PGGM was an early investor in private equity, starting in 1983. From 2000 until 2011, it outsourced its private equity investments to AlpInvest, a joint venture between APG and PGGM. In 2009, PGGM decided to build up its in-house private equity team again and the first internal PGGM Private Equity Fund was launched in 2010. In 2011, PGGM sold its interest in AlpInvest to the Carlyle Group. Currently, AlpInvest is still committing €200m per year to lower US mid-market private equity funds (funds with a target size below $2bn) on behalf of PGGM. Please refer to the AlpInvest website for more information about them.

(Data as per December 2020)

ESG reporting

We have developed an ESG reporting template, in collaboration with APG, MN and AlpInvest. This helps PGGM understand and monitor the ESG implementation at the fund and portfolio company level. Additionally, PGGM’s PE team has published an annual Responsible Investment report in 2018, 2019 and 2020 to describe its efforts to integrate ESG into its investment process.