Dutch PGGM's pension fund Q4 hit by credit crisis

AMSTERDAM Thu Jan 24, 2008 5:52pm IST

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AMSTERDAM Jan 24 (Reuters) - Dutch PGGM's pension fund on Thursday posted a 0.4 percent loss in the fourth quarter of 2007 because of the credit crisis and a change in how it values its property assets, but its full-year return was 7.2 percent.

PGGM's affiliate Healthcare and Welfare Sector Pension Fund said in a statement it lost 2.1 percent on its stock investments due to the credit crisis and bleak prospects for the U.S. economy and possible new write-downs by banks and insurers.

The pension fund, the second largest in the Netherlands after ABP, managed 88 billion euros ($129 billion) at the end of 2007 of which 30.1 billion euros is invested in stocks.

The fund posted a 4.9 percent quarterly loss on its property investments as it changed the assets' valuation to share price from asset value.

Commodities, totalling 4.8 billion euros at the end of 2007, posted the biggest returns of all asset classes, the fund said. Commodities' returns were 14.5 percent in the fourth quarter and 35.6 percent for 2007.

Fixed interest assets, worth 20.2 billion euros, posted a return of 1.5 percent in the fourth quarter as U.S. treasuries benefited from U.S. recession fears, the fund said.

The fund, which offers pension products to almost 2.1 million Dutch health care workers and retirees, split off from PGGM at the beginning of this year as PGGM plans to offer insurance products in the Netherlands.

Later this year, PGGM plans to offer retirement and unemployment insurance products as well as savings and investment products and is cooperating with Dutch KAS BANK (KASNc.AS), a PGGM spokeswoman said.

The PGGM products will compete with companies such as Dutch financial services group ING Group (ING.AS) and insurer Aegon (AEGN.AS).

Representatives from health care employees and unions jointly own both the fund and PGGM. (Reporting by Gilbert Kreijger; editing by Tony Austin)

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