Dutch pension fund Pensioenfonds KPN has invested €300m in M&G Investments’ impact-focused private debt strategy, as part of its goal to achieve measurable social and environmental impact alongside risk-adjusted financial returns.

The fund, launched specifically for KPN, classified under the Sustainable Finance Disclosure Regulation (SFDR) Article 9, aims to offer corporate loans to companies focused on achieving measurable environmental and social results in areas such as climate, biodiversity, technology, and sustainable production and consumption.

These focus areas align with the United Nations' sustainable development goals.

The strategy's investments must meet minimum sustainability criteria, including exclusion rules and key performance indicators. The fund will invest globally, with European private corporate loans expected to comprise most of the portfolio.

To date, 12 investments have been completed under the strategy, including Bollegraaf Group, a Dutch company specialising in recycling technologies, which is aligned with the pension fund’s circular economy objectives.

M&G director of institutional business development in the Netherlands, Sander Van der Wel, said that many European companies are investing in clean technology and sustainable operations.

“To do this, they need the support of patient capital, and long-term institutional investors are exceptionally well positioned to provide this much-needed investment,” Van der Wel said.

"Our partnership with Aegon Asset Management’s fiduciary management team … demonstrates how asset managers and asset owners can develop innovative financial solutions that address global challenges, whilst providing attractive risk-adjusted returns for long-term pension savings.”

Adding to this, Aegon Asset Management head of fiduciary management, Karin Roeloffs, said that it has explored the possibility of impact investing within private debt for Pensioenfonds KPN over the past few years, and after a detailed selection process, including environmental, social and governance (ESG) and impact due diligence, M&G was chosen to manage the impact corporate debt mandate.

“Other strategies and managers will complement this corporate debt allocation. The goal is to contribute to the impact goals and ESG themes of Pensioenfonds KPN alongside a target risk-adjusted financial return with a well-diversified portfolio,” she said.

The market for impact-focused private debt has grown substantially, with dedicated funds raising over €66bn globally and current targets approaching €83bn.

Pensioenfonds KPN’s investment reflects this broader European trend, where pension funds are increasingly allocating capital to private debt and sustainable assets.

For example, the German Federal and State Pension Fund recently awarded two €750m European infrastructure debt mandates to Allianz Global Investors and Global Infrastructure Partners, aimed at supporting infrastructure growth and modernisation.

Similarly, France’s Fonds de Réserve pour les Retraites recently expanded its private debt program and Dutch asset manager APG awarded a €425m infrastructure debt mandate to Schroders Capital.

This investment also reflects a wider European trend of pension funds incorporating sustainability into their portfolios.

In Denmark, a report from Insurance and Pension Denmark found that green investments in the pension industry grew by 12 per cent last year, while Danica added 1,730 fossil fuel companies to its exclusion list.

In Sweden, KPA Pension has set climate targets to achieve net-zero emissions in its asset portfolios by 2050.

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