Dutch pension funds invested 23 per cent (€229bn) of their assets under management (AUM) in private assets in 2025, up from 21 per cent (€224bn) in 2021, according to a report by De Nederlandsche Bank (DNB).

The report, Private assets and financial stability: The role of Dutch insurers and pension funds, found pension funds' actual allocation to private assets exceeded their strategic target, standing at 23 per cent (€229bn) compared with a target allocation of 21 per cent (€207bn).

However, several pension funds said they expect to increase their strategic allocation to private assets over the next five years, partly due to the transition to the new Dutch pension contract.

By comparison, large Dutch insurers increased their allocation to private assets from 14 per cent of AUM in 2021 to 22 per cent in 2025, equivalent to around €47bn (excluding real estate loans and mortgages).

Pension funds have a greater allocation to private equity, while insurers are more heavily exposed to private credit, including direct lending and structured credit.

DNB noted that pension funds' private credit allocation remains below its strategic target, suggesting there could be further growth over the short to medium term. The report also noted that pension funds have committed capital that has yet to be invested.

In recent years, private credit has seen the strongest growth, although this is mostly among insurers.

Insurers’ total exposure to private credit increased from €12.8bn in 2021 to €17.5bn in 2025, representing around 8.3 per cent of insurers' invested assets. Among pension funds, private credit exposure remained broadly unchanged over the same period at €13.1bn, equivalent to 1.3 per cent of invested assets.

Although the rapid growth of private markets presents opportunities, DNB warned that it also requires vigilance and sufficient data availability to identify and manage risks.

DNB said the growth of private markets could deliver macroeconomic benefits, including reducing the economy's dependence on bank financing and providing long-term capital for innovation, growth sectors and capital-intensive investments.
However, it warned that these benefits can only be realised sustainably if the associated risks are properly understood and managed.

“One potential risk is the limited liquidity of private assets, as investors are generally unable to sell their holdings easily. In addition, the absence of up-to-date market prices may mean that changing market conditions are reflected in valuations only with a delay,” the report stated.

In addition, it stated that private markets are inherently less transparent and relatively complex, making it more difficult to identify interconnections between financial institutions and potential concentrations of risk.

Currently, DNB said systemic risks remain limited due to the size of the exposures and because insurers and pension funds are unlikely to be forced sellers during periods of market stress.

“Nevertheless, given the rapid growth of private markets, it is important to continue closely monitoring their development and the associated risks. Problems at individual institutions resulting from high allocations to private assets could also create systemic risks, for example through confidence effects,” the report said.

DNB is also exploring the use of scenario analysis and stress testing for private markets, noting that many private assets have yet to be tested through a prolonged market downturn or recession. It said robust risk management will be essential to ensure private markets do not amplify shocks within the financial system.

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