Joint ventures and pension funds: the Alpinvest case

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Joint ventures and pension funds the Alpinvest
case

• Else Bos, CEO PGGM Investments

October 22, 2008
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Alpinvest (1)

• Joint venture to create an independent manager
  for their private equity, started in 1999
• Spin off from NIB Capital in 2004
• 50/50 ABP PGGM
• 110 Staff, offices in Amsterdam, London, New
  York, Hong Kong
• Assets under management 40 bln, 2006/2008
  mandate from PGGM and ABP of 11 bln

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Alpinvest (2)

• Alpinvest uses the full range of private equity
  alternatives

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Joint Ventures rare organizational form
Control
Alliance
Financial Participation
Alignment
Joint Venture
Subsidiary
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Examples

• Eumedion (2005), alliance of institutional
  investors to promote corporate governance and
  combine voting power at AGMs for Dutch and
  European listed companies
• PRI (2006), alliance to promote sustainability
  framework for institutional investors, and share
  best practices.
• Loyalis (1996), financial participation by ABP to
  develop and sell insurance products complementary
  to pensions
• PGGM financial participation in Dutch
  Sustainability Research (2002), providing
  sustainability research services to institutional
  investors.
• AlpInvest (2004), PGGM and ABP joint venture to
  create a specialized platform for private equity
  investing.
• ATP (2006), creating four subsidiaries
  independent platforms to implement its investment
  strategies
• TIAA-CREF (2008), announcing to open office in
  London

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Characteristics

• Joint Venture usually set up for a specific goal
• Acquire knowledge
• Combine strengths to enter new markets
• Median life time 7 years
• Wide variation
• End of joint venture
• Liquidation (34)
• Acquired by one of the partners (61)
• Bought by third partner (5)

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SWOT
Joint Venture
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Criteria for successful joint ventures

• Stay close to your knitting
• Create a non-competitive space
• Invest in stable businesses
• Create alignment

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Back to Alpinvest

• Strategic rationale Specialized, aligned
  platform
• Successes tailor made strategies, performance
• Lessons learned (Delicate) balance - business
  strategy - definition of mandate - governance -
  reputation and communication