Published: Global Pensions, September 7, 2005

Dutch institutions hungry for private equity

from Lisa Haines

NETHERLANDS - The number of Dutch institutions investing in private equity is set to increase to over one third (35%) in the next two to five years, according to findings released today.

A study by the University of Tiburg of 100 major institutional investors in the Netherlands showed 29% are already investing in the sector and that this number is set to increase by more than one third (35%) in the next 2-5 years, with average allocation rising from current levels of 3.8% to 4.2%.

The research, commissioned by private equity fund of funds manager Adveq, also found Dutch investors are expected to increasingly look outside the Netherlands, causing domestic private equity investment to fall from 22% to 18%. Some 10% of Dutch institutions currently commit more than 10% of assets under management to private equity investments.

Conversely, the US will see private equity allocation from Dutch investors increase from 27% to 30%, and in the rest of Europe it will rise from 46% to 48%, with the most attractive private equity segments primarily in European development and venture capital.

Peter Laib, managing director at Adveq said:"With 29% already investing in the asset class, it is clear that Dutch institutions recognise the ability of the asset class to provide superior returns, and they are becoming a significant source of capital to the private equity industry."

"In addition, as their future allocation to private equity grows, we will see Dutch institutions increasingly focusing on private equity opportunities outside the domestic market."

The study investigated the current and likely future investment behaviour of Dutch institutional investors towards private equity investment over the next 2-5 years. The institutions surveyed represent about e1500bn of assets under management.

In further findings, fund of funds will become the biggest growth area with 48% of Dutch institutions investing through such vehicles over the study’s forecast period.