Dutch Pension Fund ABP Returns 4.6% in Q3

Stichting Pensioenfonds ABP, a Netherlands pension fund for government and school employees and the country’s largest pension fund, announced Friday that it achieved a 4.6% return in the third quarter of the year. Assets of the fund increased by 23.4 billion euros ($25.41 billion) to 533 billion euros at the end of the quarter.

Pension plan liabilities increased by 24 billion euros to 465 billion euros in the quarter as a result of the fund’s actuarial interest rate declining by 30 basis points to 2.2%. As liabilities outpaced the growth in assets, the fund’s coverage ratio fell to 114.6% in the quarter from 115.6% at the end of Q2. The fund requires coverage ratios to be greater than 110% to increase pension payouts.

“ABP’s financial position is fairly stable. We posted a good return this quarter, which almost compensated for the sharp increase in the value of all the future pension payments,” said Harmen van Wijnen, ABP’s chairman of the board, in a statement. “That is a good thing. After all, our financial position is important to achieving our ambition of a pension with great purchasing power.”

ABP has more than 3 million participants from nearly 3,500 government, education and independent employers, according to the fund’s 2022 annual report.

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Real estate and fixed income were the fund’s highest-performing asset classes during Q3, returning 4.7% and 4.3%, respectively. Equities returned 2.2%, and the overlay portfolio returned 1.8%.

The only asset class in ADP’s portfolio that reported a loss was alternative investments, which returned negative 0.3%. Private equity returned negative 1.3%, while hedge funds returned negative 3.5%. Commodities and infrastructure returned 0.9% and 1.1%, respectively.

As of the end of the third quarter, the fund allocated 38.7% of its assets to fixed income, 29.5% to equites, 19% to alternative investments, 9.8% to real estate and 2.3% to overlay assets.

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Tags: ABP, Harmen Van Wijnen, Netherlands, Stichting Pensioenfonds ABP

Eldridge Industries LLC has acquired a 10% interest in Blue Owl Capital’s Blue Owl GP Stakes Fund III, a stake which will provide liquidity and increase the fund’s value. The companies did not disclose the financial terms of the transaction.

The Blue Owl GP Stakes Fund III is described by Eldridge as a passive minority investment vehicle that owns stakes in “industry-leading” private equity firms. According to the announcement, the fund aims to provide capital to help firms meet their growth target plans and other strategic goals. Eldridge joins more than 30 other investors in Owl’s GP Stakes platform, including Vista Equity Partners, Starwood Capital Group, SilverLake and Sixth Street Partners.

According to Blue Owl Capital, a GP stakes investment is a transaction in which a minority partner, such as itself, acquires a minority interest—approximately 10% to 30%—in an alternative asset manager, which is the general partner of the partnership. In return for the investment, Blue Owl receives a pro-rata share of the firm’s earnings, which include management fee income, balance sheet return and carried interest. According to Eldridge, it typically acquires the minority stakes from large institutional private credit managers.

Eldridge also stated that the strategy allows GP Stakes investors to participate in the earnings of the business alongside the founders or management company owners. By diversifying the portfolio among different private capital managers, the fund can create a portfolio of hundreds of underlying funds consisting of thousands of portfolio companies, along with multiple strategies and geographic regions.

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As of the end of June, Blue Owl Capital’s GP Minority Stakes unit had assets under management of $55.5 billion, according to its second quarter report.

Blue Owl Capital did not immediately respond to requests for comment on the acquisition. Eldridge had no comment.