The global hunt for yield has tempted Dutch pension funds to work with private mortgage origination funds "regiepartijen" to originate mortgage loans on their behalf. With record-low interest rates pension funds and insurance companies continue to target asset classes that pay enough of a yield to offset their long-term liabilities.
In the Netherlands, large insurance companies as well as banks have historically originated mortgages. But the new funds, and their growing size, are giving insurers and pension funds the opportunity to increase their role in a market for outstanding mortgages that was worth €634bn in 2014. “If you compare this investment with government bonds, you’re thinking hang on . . . why don’t I switch?” says Mr van der Bijl.