PGGM / PFZW ILS portfolio gross return for 2024 was 25.2% unhedged

We’ve reported before that the giant insurance-linked securities (ILS) portfolio managed by PGGM, the Dutch pension fund investment manager, on behalf of its end-client Dutch pension PFZW, had delivered a 15.1% net of costs return for calendar year 2024, on a Euro hedged basis.

That was impressive enough, for a significant ILS investment portfolio that amounted to roughly US $8.7 billion in valuation terms at the end of last year, spanning numerous allocations to catastrophe bonds, private ILS, quota share sidecars and collateralized reinsurance, as well as the earnings generated by a sponsored rated reinsurer balance-sheet.

The PGGM ILS investment team, on behalf of PFZW, has spent years building-out a range of allocations and structures that allow the pension investor to efficiently access the returns of the reinsurance market, at the risk-return levels it desires and with the additional benefits of globally diversified exposures incorporated as drivers of returns.

As we reported in an article recently, the PGGM ILS allocation portfolio constructed on behalf of PFZW features 14 investments, across a wide range of structures and reinsurance partnerships.

This gives the investor optionality through the market-cycle, access to diversifying regions and perils, aligned partnerships, focused ILS fund manager strategies and self-managed private ILS account optionality, as well as the broad access to business and leverage that the Vermeer Re rated balance-sheet provides.

But now, in the latest annual report from the Netherlands based pension PFZW the raw performance-potential of the giant ILS and reinsurance investment portfolio has become clearer.

PFZW’s latest report for 2024 states that the gross return of the ILS and reinsurance investments amounted to an impressive 25.2%, before hedging and other costs were taken into account.

The cost of the ILS allocation is reported at just 0.5%, both on a hedged and unhedged basis, meaning the unhedged net return of the ILS portfolio came in at 24.7% for calendar year 2024.

Just as impressive is the fact the PFZW ILS and reinsurance investment portfolio outperformed its benchmark by 6.9% in 2024, both on the hedged and unhedged basis.

Which helps to drive home the value the Netherlands based pension fund derives from its investments into the ILS and reinsurance market.

While also serving to make clear the return-potential of a large and diversified ILS portfolio that has numerous access points to the reinsurance market through a variety of structures.

PGGM remains the largest single investor listed in our directory of pension funds and sovereign wealth funds investing in ILS and reinsurance.