Fundraising

ABP’s infra return beats private equity

The Dutch pension saw its infrastructure portfolio grow 15.2% in the first half of the year, versus 13.7% for private equity. But the stellar growth still manages to only make ABP even for the loss it suffered on its infrastructure investments in 2009.

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Dutch pension ABP scored a 15.2 percent return on its infrastructure portfolio in the first half of 2010, a result that bests all its other alternative investment classes, including private equity.

At 13.7 percent, private equity came closest to matching the growth in ABP’s infrastructure portfolio. Hedge funds returned 8.9 percent and real estate 1.7 percent, according to the pension’s half-year report.

Infrastructure is a relatively new asset class within the ABP portfolio that is growing from a smaller base. The pension created its infrastructure allocation in 2007 and currently has .3 percent of its €218 billion investment portfolio invested in the asset class.

Private equity, by contrast, commands a 5.4 percent share of its portfolio, according to the half-year report. The 13.7 percent return on private equity equated to a gain of about €1.3 billion for the pension.

Overall, ABP posted a 4.6 percent return on investment in the first six months of the year, equivalent to a gain of about €9.6 billion.

Infrastructure’s 15.2 percent return contributed about €100 million toward that gain. That makes ABP square for all of 2009, when infrastructure posted a negative 4.8 percent return, equivalent to a loss of about €100 million.

ABP is a backer of several big infrastructure funds, according to fundraising database InfrastructureConnect. These include 3i’s $1.2 billion Indian Infrastructure Fund, the €1 billion Macquarie European Infrastructure Fund, and the $1.35 billion US Power Fund III managed by Energy Investors Funds.

The pension is also an investor in DIF Infrastructure II, according to InfrastructureConnect.