Japan’s GPIF and Dutch Pension Fund ABP to Invest in Developed Markets Infrastructure

The Government Pension and Investment Fund (GPIF) of Japan and APG Asset Management, on behalf of Dutch pension fund ABP, have announced a joint investment program to make investments in developed markets infrastructure.

APG Asset Management will invest in the partnership on behalf of Dutch pension fund ABP, which is the majority stakeholder in APG. APG is a subsidiary of ABP and invests on behalf of a number of Dutch pension funds. APG managed $617.58 billion in assets as of December 2023.

GPIF, the largest pension fund in the world manages $1.5 trillion in assets in its portfolio, which is roughly 50% equities and 50% bonds. Approximately 1.53% of the fund’s assets are set aside for other alternative investments, including private equity and infrastructure. APG manages approximately $577.48 billion as of March 2023 in pension assets.

In March this year, GPIF sent out requests for information on alternative investments, signalling that the fund had interest in expanding its investments outside of bonds and stocks. The fund requested information on infrastructure, cryptocurrency, timber and other alternative investments.

Improving Investment Efficiency

Announcing the partnership with APG, GPIF President Masataka Miyazono said that GPIF has been increasing its exposure to alternative investments (infrastructure, private equity, and real estate) in expectation of greater portfolio diversification, seeking to improve investment efficiency and further ensure the stability of pension finance.

“We have recently launched a joint investment program with APG in the infrastructure sector. We are embarking on a long-term partnership initiated between APG and GPIF, as representatives of public pension fund investors from respective countries. GPIF will continue to work to secure long-term investment returns for the benefit of the pension beneficiaries,” Miyazono added.

According to APG, part of the focus of the investment partnership will be on sustainable energy, fibre networks, and transport. APG has a history of making infrastructure investment that supports the energy transition, and currently manages $27.14 billion in infrastructure investments globally, which have returned an annualised 10.2% over the past five years.

APG Asset Management CEO Ronald Wuijster said that partnering with GPIF, which shared their shared commitment to long-term private investments, makes this collaboration a natural fit.

“We believe that joining forces will help to address the growing need for coordinated actions from like-minded, long-term investors to deliver long-term value to our beneficiaries and the broader society. We look forward to collaborating with GPIF to achieve our shared goals,” he said.

Previous APG infrastructure investments include a 33% stake in 26 solar facilities across the US acquired from insurer Global Atlantic Financial Group in November 2023, and a 49% stake in solar energy and storage company Gemini.

As the largest pension provider in the Netherlands, APG looks after the pensions of 4.8 million participants. APG provides executive consultancy, asset management, pension administration, pension communication and employer services.

AGP works for pension funds and employers in the sectors of education, government, construction, cleaning, housing associations, sheltered employment organizations, medical specialists, and architects.