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APG Asset Management focuses on good and affordable pensions for the current and coming generations. Environmental and social aspects as well as governance principles are factors in all our investment decisions. Together with you, we set out the framework for our investment policy and strategy. This results in a well-balanced and suitable investment portfolio. We continually test our policy on risk, funding ratio, liabilities, yield development and agreements made. Every three years, an ALM (Asset Liability Management) study is performed. You can make adjustments at any time.
Investing your pension assets is about more than just financial results. This is why responsible investment within APG Asset Management is closely embedded in the investment process. In all investment decisions we consider environmental and social aspects and the quality of governance.
We summarized our vision on investment for you in a number of investment beliefs. These concern, for instance, the investment risk, spread of risk, innovation, active and sustainable investment. They constitute the basis for reaching your goals. Our investment beliefs are:
1. Investment risk is rewarded
A higher return in the long term is the reward for taking a well-considered investment risk.
2. Diversification provides advantages
Spread across different asset classes, styles, regions etc. is the easiest way to improve the risk–return ratio.
3. Financial markets are not perfectly efficient and we can benefit from the flaws
The efficient market theory is based on the assumption that everything known has been factored into the prices. History shows this is not always the case. Investors can benefit from this by taking active positions.
4. First movers achieve a premium
By identifying a new type of investment or investment strategy at an early stage before other investors see the advantages of it, the investor can build a position and subsequently take advantage of the increased attention if other investors show interest at a later point in time.
5. The long horizon offers additional opportunities for returns
Pension liabilities are distributed over time and there is no immediate need for the fund to have large cash amounts available at all times. A pension fund can therefore invest with a long-term horizon: a high degree of volatility in the short term does not necessarily have to present a problem. The long-term horizon provides possibilities for investing pension assets in illiquid investments for longer periods of time. Illiquid investments normally offer an extra contribution for the lower degree of tradability in the form of higher returns.
6. The way in which our professional investors work as individuals and as a team makes the difference
APG Asset Management employs highly qualified and experienced employees. Employees are happy to take responsibility and are happy to account for their actions. Our workforce is diverse, which enables us to complement each other. We have a culture in which innovative ideas and concepts arise and are further developed, and cooperation is encouraged. Furthermore, APG Asset Management maintains a broad network in the investment world and with universities.
7. Good processes are a condition for achieving results
Well-streamlined processes are necessary in order to realize the long-term objectives for achieving a good result.
8. Cost-conscious investment management offers extra value added
The net return improves by minimizing cost both in the investment pools and the organization and increasing efficiency. An example is the Treasury Center applying netting, saving money on the market spread.
9. Good governance and responsible investment are key
We can improve the risk–return profile by factoring non-financial elements into the investment process. To APG Asset Management, responsible investing is a way to improve the investment portfolio’s ratio of risk and return and simultaneously contribute to sustainability. We do this, for example, by paying attention in the investment process not only to companies’ financial performance, but also to how they fulfill their social responsibility and how the executives of these companies deal with their shareholders.