Inside the Netherlands’ first asset manager JV

The joint venture includes airline group KLM's pension fund, the Dutch railways retirement scheme and Achmea.

Dutch asset management companies Achmea Investment Management, Blue Sky Group and SPF Beheer launched a joint venture this week dedicated to private equity co-investments.

With assets of at least €165 billion among them, according to PEI data, the trio will invest alongside GPs and become a long-term backer of “good-quality companies” globally.

Achmea IM, the largest of the three with more than €130 billion in assets, serves more than 35 pension funds and insurance companies in the Netherlands. Blue Sky is the pension fund manager and administrator of airline group KLM and SPF Beheer the Dutch railways employee pension funds.

Here’s what we know about the group’s co-investment platform.

It’s a first for the Netherlands

The JV is the first tie-up of its kind in the Dutch investor community. The alliance was three years in the making and involved a lengthy process of getting chief investment officers and senior management on board and fully aligned, Achmea senior portfolio manager Jos Van Gisbergen told Private Equity International.

“It was about getting all the groups in the same direction and having a clear view of what we want to accomplish over time, what strategy we like or don’t like, who looks after which processes, and whether there are overlaps or differences in our approach.”

While AlpInvest Partners, which invests capital from major Dutch pensions APG and PGGM had a similar structure, Van Gisbergen noted that the trio’s JV has a narrower focus. “We have very clearly said: ‘This is what we stand for, this is what we want, and how we operate’”, he added.

Van Gisbergen called the initiative an open platform where the three groups come together in equal standing in investment decision-making. Achmea IM, Blue Sky and SPF Beheer each have a member on the JV’s limited partner advisory committee.

It will have more than €100 million for the US and European mid-market

Pooling capital from their client base, the JV will target small to mid-cap companies in the US and Europe with a market value of between €200 million and €300 million.

“We don’t want to be involved in big auction processes where we see too large transactions. In our view there’s already too much money available for that part of the market. Our preference goes to small to mid-cap where we can help really the companies in that space,” Van Gisbergen said.

He added that the group will work with its GPs as well as an undisclosed external advisor who has multiple offices across the globe to select investments. Each party will bring their dealflow on to the platform.

Unused capital will be returned

The JV will have an annual fund and capital that isn’t deployed in co-investments by the end of 2019 will be returned to the group.

He added that the JV has no pressure to deploy. “If we don’t see the opportunities within the scope that we have, we will not invest. We like to be a long-term backer of companies, so it’s more important to find good quality investments that meet our ESG criteria, than take whatever goes in the door just to fulfil deployment.”

ESG is the main factor in selecting investments

Asked whether the reason for setting up the JV is to reduce costs incurred with its managers, Van Gisbergen noted cost is simply one element. The other driving factor behind the JV is to build more sustainable small to mid-cap companies.

“What we have here in the Dutch market is a very prominent ESG focus. We like sustainable, long-term, good quality companies that have ESG factors in place,” he said.

Fossil fuels, tobacco and anything connected with the weapon industry are no-go areas. The usual hot sectors such as consumer-oriented and technology will be favoured.