Stichting Pensioenfonds ABP, Heerlen, Netherlands, committed $75 million to a private equity fund run by BlueOrchard Investments that invests in microfinance organizations globally, said ABP spokesman Thijs Steger.
Funding comes from ABPs strategic allocation to private equity, which accounts for about 5% of the €205 billion ($302 billion) fund. Its the first private equity investment in microfinance for the fund, though ABP in 2005 invested $40 million in a BlueOrchard microfinance debt fund.
These investments are particularly fit for a pension fund as a risk diversifier. They have so far proven to be relatively non-correlated with most other asset classes, and it appeared natural to follow up with an investment in private equity, a most needed form of financing in this industry, Jan van Roekel, senior portfolio manager at ABPs asset manager, APG Group, said in a news release.
ABPs microfinance strategy has returned an estimated 6% on an annualized basis, Mr. Steger added.