Dutch insurers, pension funds increase private asset holdings
Dutch insurers and pension funds are significantly increasing their investments in private assets. While this trend offers economic opportunities, it also introduces new risks related to valuation uncertainty, illiquidity, and interconnectedness within the financial system.
Insurers lead private asset surge
Dutch insurers and pension funds are increasingly investing in private assets, with insurers showing particularly strong growth.
Between 2021 and 2025, the percentage of private assets in insurers' portfolios rose from 14 percent to 22 percent, representing approximately €47 billion.
Pension funds also increased their private asset allocations, albeit more modestly, from 21 percent to 23 percent over the same period, totaling a larger €229 billion in private assets.
Investments in private credit have seen notable growth, especially among insurers, whose exposure increased from €12.8 billion to €17.5 billion, or about 8.3 percent of their invested capital, between 2021 and 2025.
Significant differences exist among individual institutions.
Illiquidity, valuation challenges
Private markets, encompassing assets not traded on public exchanges, have grown rapidly, offering long-term capital for innovation and growth.
However, these investments inherently carry risks due to their illiquidity, lack of current market prices, and uncertain valuation.
Vulnerabilities in private assets can transmit financial stability risks through various channels.
Extreme liquidity stress could lead to forced sales, depressing prices and amplifying market shocks.
This might weaken financial positions, potentially affecting policyholders or participants and eroding confidence.
Interconnectedness further poses contagion risks within the financial system.
Growth demands vigilance
Current systemic risks from private asset investments in the Netherlands are limited, but their rapid growth demands ongoing vigilance.
Monitoring private market developments and improving data quality through international coordination is therefore essential.
Furthermore, private assets must be subjected to rigorous scenario analyses and stress tests, requiring financial institutions to adapt their risk management practices.