Joint Ventures in the Pension Industry: The PGGM/Alpinvest Case

Abstract

AlpInvest was created in 1999 as a joint venture between Dutch pension funds ABP and PGGM to create a strong platform for their private equity investments This case study examines the strategic rationale for setting up this private equity joint venture, and evaluates the pros and cons. We identify four criteria to create a successful joint venture in the pension fund industry: a joint venture whose business is close to the core competences of the pension fund, reduction of overlap in activities of shareholders and joint venture, shareholders with similar goals from the start, and a joint venture that is based on a stable growth business. Managing these issues is complex; the joint venture as an organizational form will therefore remain rare.