Two of the world’s largest pension funds, the $626 billion Dutch APG and the $660 billion National Pension Service of South Korea (NPS), have joined forces in a partnership to invest in private assets including infrastructure and private real estate.
The funds have already this year jointly invested in Portgual’s largest toll road operator, Brisa, and Scape which is a market leader in student accommodation in Australia.
Chief investment officer of NPS Investment Management, Joon Ahn, says to effectively respond to the fast-paced global investment environment, NPS has looked for ways to diversify its deal sourcing channel and reinforce competitiveness in securing investment opportunities in quality real assets.
“As a part of these efforts, NPS wants to cooperate with like-minded long-term institutional partners at a global level. The partnership with APG is a next step to realise this vision,” he says. “We believe that partnering with leading global institutional investors will widen our access to more attractive assets in the market and help generate better returns.”
The goal of the partnership is to gain access to attractive investments worldwide, at better conditions and with more influence and governance rights
Ronald Wuijster, member of APG Group’s executive board, responsible for asset management says the partnership allows access to deals that would be difficult to do alone.
“As a global pension investor, we believe that partnering with institutional, liked minded-investors, can deliver attractive long-term responsible investment returns to our pension fund clients and their beneficiaries. With this partnership, clients of both APG and NPS gain access to attractive investment opportunities which would be difficult and more expensive to realise if acting alone. At the same time, we see benefits in exchanging knowledge in this partnership on real assets investment. On both themes, APG is a globally recognized leader, and we believe that sharing our knowledge is beneficial for this partnership and society as a whole. Within a relatively short time, we have been able to establish a genuine, long term and mutually beneficial partnership with NPS. We look forward to realizing more successful investment projects with NPS as well as with other like-minded investors in the years to come.”
Both investors are open to investing with other like-minded investors, and Ahn says that NPS will continue to look for partnerships with other large pension funds and SWFs going forward.
NPS, which is the third largest pension fund in the world, has an allocation of 3.5 per cent to infrastructure and 4.2 per cent to private equity.
APG also has other strategic agreements in place including a development joint venture with CPP Investments to invest in and develop industrial warehouse logistics in South Korea.