NETHERLANDS - PGGM, the Dutch pension fund for healthcare and socialworkers, has hired IEF Securities Gold, a unit of IEF Capital, to provide inflation cover for its pensions commitments.
PGGM, which has some e48bn assets, said it had paid IEF Capital the present value of the inflation forecast for the Netherlands over the next 30 years and will, each year, receive the actual Dutch inflation in exchange.
The contract with IEF is backed by real estate, is worth about e30m.
The investment will be part of PGGM’s fixed-interest portfolio. Some e1.2bn of this portfolio has been allocated to inflation-related products, with the main focus being on the US, UK and French state bonds.
PGGM added that a major benefit of this transaction is the fact that the proceeds it generates will be directly related to Dutch inflation.
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