Dutch pension asset manager PGGM, which manages the investments of PFZW, has grown its PGGM Infrastructure investment portfolio to €15bn ahead of its 20-year anniversary this year.

PGGM head of infrastructure, Dennis van Alphen, said infrastructure is an investment category that fits “perfectly” within the strategy that integrates return, risk, and sustainability with PFZW’s objectives.

In a blog post, Van Alphen explained that infrastructure offers an opportunity to invest directly in companies that provide essential services to the community, such as public-private partnerships, energy, transport, and digital infrastructure.

He suggested that these investments also provide stable incomes, often linked to inflation, and therefore both of these elements make infrastructure “very attractive” as an investment.

Van Alphen said that PGGM’s strategy can be distinguished by its direct investment approach with an in-house specialist team of investment professionals.

“For 15 years, we have been investing directly in the shares of companies, particularly in Europe and the United States,” he continued.

“This direct involvement gives us influence over the strategy of the companies and an active supervisory role.

“PGGM often has a senior team member on the supervisory board of the portfolio company, who brings knowledge and expertise.”

In addition to this, he said that PGGM appoints external supervisory directors, often former CEOs or CFOs, who use their expertise to supervise the rollout of the business plans.

Van Alphen noted that as a major shareholder, the asset manager has a direct say in the strategic course and actively thinks about important decisions and long-term value creation.

He stated that management teams are accountable to the supervisory board and approval is always required for major investments and decisions. And if necessary, PGGM has the right to replace management members to ensure the growth and continuity of a company and to maximize the value of its investments.

In addition to this, he explained that the manager consciously chooses direct investment for several reasons, including the companies to invest in without being dependent on fund managers, how long it holds an investment for, and putting themes on the agenda such as sustainability and diversity.

The ability to choose what companies to invest in provides the manager with cost advantages as it does not pay any external management costs.

“I often say: the real work only starts after the transaction. Of course, the investment decision plays an important role, but you only really get to work actively with the management as a shareholder,” van Alphen stated.

“We help roll out strategic plans, evaluate performance, and sharpen the course. By sharing best practices between our portfolio companies, we drive growth and efficiency.”

He offered an example of this: Eurofiber, a player in digital infrastructure for companies, which expanded its offering to include cloud solutions and grew geographically.

Van Alphen said that it did not just support the growth with capital but also strategic advice and financing solutions. He noted that PGGM also plays an active role in companies in a growth phase.

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