Dutch Pensioenfonds PGB has appointed Aberdeen Standard Investments (ASI) as partner to invest €500m of its assets in small and mid-sized enterprises across Europe through responsible strategies.
The partnership is a five-year private equity program with an objective of creating value through investing with managers focusing on operating improvements, job creation, and environmental, social and governance (ESG) issues, as well as other responsible investment strategies.
PGB’s strategy to spur growth and development of companies can take form of guiding international expansion, recruiting external management to assist with the growth strategy and expanding the range of products and services offered, the partners said in a statement.
PGB Pensioendiensten senior portfolio manager private equity Dick Tol commented: “For large private equity funds, financial leverage is an important contributor to gain high returns. PGB is targeting a more hands-on approach where the majority of the return is generated by growth. The PGB private equity team will closely monitor the job creation and turnover growth in every company.”
The pension fund selected ASI for the mandate based on the team’s experience and network across Europe, and its capacity to assess a wide range of investment opportunities.
Both PGB and ASI will judge whether the cost structure in any fund commitment made is appropriate for the targeted investment outcome and the services delivered to achieve a broadly diversified portfolio of private equity funds.
ASI senior investment director Mark Nicolson said: “We are seeing ever more significant moves by lower middle market private equity managers in Europe to embrace responsible investing alongside producing attractive investment returns for their investors. We believe that this mandate can deliver these strong returns for PGB and also help to drive further improvements in responsible investing in small and medium sized companies in Europe.”
PGB said it expects the new program to contribute to companies that have a positive impact in creating a sustainable and better environment as responsible investment criteria and climate policies are taken into account.
This means PGB and ASI will work with companies regarding areas such as renewable energy use, emissions, environmental policies, anti-corruption measures and diversity. Every company in the portfolio will be tracked and assessed on whether it contributes to reaching the UN Sustainable Development Goals.
PGB Pensioendiensten portfolio manager private equity Yorick Groen commented that PGB has a long term focus in mind with this program.
“We aim for a long lasting cooperation with ASI. The choice of a like-minded partner is essential for the success of the program. ASI not only shares our strategic view on the European private equity market, but also our focus on costs and responsible investing,” Groen said.
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