Transactions - OCTOBER 30, 2014

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Dutch fund to invest €75m in residential mortgages instead of bonds

by Reg Clodfelter

The pension fund for Douwe Egberts, a Dutch coffee producer, will invest €75 million ($95.5 million) in Dutch residential mortgages and will make a corresponding reduction in its investment in government bonds in France, Germany, Netherlands, Belgium and Austria, according to a recently released newsletter from the pension fund.

The investment represents approximately 5 percent of the €1.5 billion ($1.9 billion) pension fund’s assets, and the reduction to government bonds will bring the pension’s allocation to the asset class down to 27.5 percent form 32.5 percent.

The pension fund cited the low interest rate on government bonds, which it does not expect to change any time soon, as the reasoning for lowering its allocation to the asset class, and also noted that the mortgages do not represent much additional risk as they have strict guidelines and most have a government guarantee.

Despite the move into the asset class, the pensio

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