APG, Europe’s largest pension investor, plans to lift its allocation to private markets to just above 30%, as it looks to capitalise on shifting conditions in credit markets, according a report by Reuters citing comments by its head of private investments.
The firm, which manages roughly €600bn on behalf of clients including Dutch pension giant ABP, currently has around 26% of its portfolio invested in private markets. That share is expected to rise further as regulatory changes in the Netherlands reshape how pension capital is allocated.
Speaking to Reuters, APG’s chief investment officer for private investments, Patrick Kanters, said ongoing reforms under the Netherlands’ Future Pensions Act are a key driver of the shift. The legislation, introduced in stages since 2023, moves away from guaranteed retirement outcomes and gives funds greater flexibility to take investment risk, including reducing exposure to low-yielding sovereign bonds.
The new framework also introduces individual pension pots for younger workers, which are designed to compound over time and potentially deliver higher long-term returns.
APG already maintains a diversified footprint across private asset classes. Around 10% of total assets are allocated to real estate, with infrastructure currently at 5–6% and expected to rise to around 10% over time. Private equity stands at approximately 8%, up from 6% historically, while natural capital remains below 1%.
Private debt exposure is currently modest at roughly 1.5%, but APG expects this to increase to between 2% and 4%, depending on client mandates. On a combined basis, this could eventually lift its private debt allocation from around €9bn to close to €24bn.
The transition comes as Dutch pension funds begin migrating assets into the new system this year, ahead of a full industry-wide deadline of 1 January, 2028.
Kanters said recent volatility in parts of the credit and alternatives markets could create selective entry points for long-term investors. He pointed to dislocations in certain sub-sectors as potentially attractive opportunities, while emphasising the importance of maintaining a long investment horizon.
He also stressed that APG prioritises disciplined underwriting, strong structures, and capital scarcity over thematic bets when deploying capital across real assets and related financing strategies.
Within private debt, APG’s portfolio spans real asset lending, specialty finance, structured credit, direct lending and non-performing loans. Roughly 60% of these exposures are currently in Europe, significantly above the global market average of around 30%.
Kanters added that while Europe remains a core focus, the US continues to offer scale and depth in private debt, making it difficult for large institutional investors to ignore. He also highlighted Asia as an increasingly attractive region, both in terms of returns and the availability of high-quality managers.
