APG to Increase Private Market Allocation to 30 Percent

The largest pension investor in Europe, APG, is set to increase its allocation to private markets to more than 30% of its total portfolio. This strategic shift follows significant regulatory changes in the Netherlands, which allow pension funds to take on more risk and move away from traditional liquid assets. APG currently manages approximately 600 billion euros for various clients, including ABP, the largest pension fund in the Dutch market. While 26% of its assets are currently held in private markets, the firm intends to expand this share as the Future Pensions Act is implemented across the industry.

The new legislation, which has been introduced in phases since 2023, frees funds from the requirement of committing to defined retirement payouts. This change allows for a reduction in holdings of lower-yielding government debt in favor of assets with higher growth potential. Patrick Kanters, the chief investment officer for private investments at APG, noted that the revised system is particularly beneficial for younger workers, providing them with individual investment pots that can grow more rapidly over their careers.