Dutch insurers and pension funds have been investing more in private assets in recent years

Private markets have grown rapidly worldwide in recent years. These markets comprise a broad range of assets that are not traded on public markets. Dutch institutional investors are also intensifying their activities in private markets. To gain a better understanding of the opportunities and risks, DNB has conducted a study into the exposures of major Dutch insurers and pension funds. 

Improved insight into current trends

The study shows that major insurers and pension funds have started to invest more in private assets, with growth particularly evident among major insurers in recent years. The proportion of private assets in their investment portfolio rose from 14% to 22% between 2021 and 2025, which is equivalent to approximately €47 billion (excluding real estate and mortgage loans).

The pension funds surveyed also invest in private assets, although the increase in their case is smaller (from 21% in 2021 to 23% in 2025). However, their investment portfolio is larger than that of insurers, totalling  €229 billion in private assets. It is also worth noting that pension funds are investing more in private equity, while insurers are investing more in private credit.  There are substantial differences between institutions, however.

Investments in private credit, in particular, have grown in recent years, especially among insurers. Their total exposure to private credit rose from €12.8 billion to €17.5 billion between 2021 and 2025. Private credit therefore accounts for approximately 8.3% of insurers’ assets under management. In the case of pension funds, exposure to private credit remained virtually unchanged over the same period (€13.1 billion, equivalent to 1.3% of assets under management). Direct lending to businesses and structured finance are the most common forms of private credit. There are also significant differences in private credit exposures across individual institutions.

Both opportunities and risks

The growth of private markets has the potential to deliver significant macroeconomic benefits. as it makes the economy less dependent on bank finance. In addition, private assets can contribute to economic growth by providing long-term capital for innovation, growth sectors and capital-intensive investments.

These benefits can only be harnessed in the long term if the associated risks are properly identified and managed. First, the limited tradability of private assets poses a potential risk. as investors are generally unable to sell their holdings easily. Second, the absence of market prices means that worsening market conditions may be reflected in valuations inadequately or with a delay (or even as a shock), as valuations are typically determined periodically on the basis of estimates and models. A third risk is that private markets are, by their very nature, less transparent and comparatively complex. This makes it more difficult to gain a clear picture of the interconnections between financial institutions and potential concentrated exposures.

Systemic risks are limited, but rapid growth calls for vigilance

At present, the systemic risks associated with private asset investments by Dutch institutional investors are limited. The current scale of the exposures does not give cause for concern regarding immediate systemic risks. Furthermore, it is unlikely that insurers and pension funds would be forced to sell assets in stressed conditions.  

However, given the rapid market growth, it is important to closely monitor the development of private markets and the associated risks. Furthermore, problems experienced by individual institutions caused by high allocations to private assets can also lead to systemic risks, for example where this results in a loss of confidence. Further research is needed to better identify the various interconnections. International coordination is vital in view of the cross-border nature of these markets. DNB is therefore actively working at an international level to improve the availability and quality of data.

In addition, DNB is exploring possibilities for carrying out scenario analyses or stress tests for private markets. This can provide valuable insights, as the resilience of many private assets, at their current scale, has not yet been tested during a market downturn or recession. Finally, private assets place relatively high demands on financial institutions’ risk management, which should, therefore, be tailored to the nature and complexity of these investments. This helps to prevent private markets from amplifying shocks in the financial system.