Achmea IM: Impact investing in private markets within pension portfolios

September 24, 2025

^{This article was originally written in Dutch. This is an English translation.}

Impact investing is gaining ground among institutional investors, including in private markets. But how can this be put into practice without compromising on the intended return? Impact portfolio manager Ralph Engelchor of Achmea Investment Management shares his vision on building a solid portfolio that combines financial and social impact with Financial Investigator.

By Ralph Engelchor, Impact Portfolio Manager, Achmea Investment Management

As a pension fund, how do you integrate impact investments into your overall investment portfolio? And which approach is preferable: an integrated approach via existing asset classes or via a carve-out?

'It is essential that pension funds formulate clear, qualitative and, where possible, quantitative objectives with regard to the intended positive impact within the themes they consider important. They must then determine which asset classes are most suitable for achieving these objectives. This varies per impact theme.

The next question is: how to implement this? Is the current asset allocation of the portfolio adequate and is it possible to integrate impact within existing categories? Or is it necessary to put together a new (sub)portfolio, a carve-out, that focuses on impact and contains other asset classes?

Both implementation options are possible and we see them in practice. Experience shows that the carve-out approach can offer more flexibility and potentially better opportunities to achieve the impact objectives. At the same time, this approach involves greater complexity due to the possible deviations from the regular portfolio. For example, in a carve-out implementation, it is particularly important to adjust the risk-return characteristics at the level of the total portfolio.'

How do you prevent impact washing?

'Careful selection of impact investments and investment partners is essential. Within our impact investment selection, the emphasis is on intentionality, investor contribution and measurability. It is important for investors that both they and their investment partners, such as fund managers, strive for the same impact objectives.

If this alignment is lacking, there is a risk of impact washing. This assessment is part of the impact due diligence that we apply to every investment, in addition to the regular investment due diligence. In the impact due diligence, we use our internally developed impact scorecard as the basis for assessing both individual impact investments and individual fund investments.

It is very important to us and our clients that the most relevant and material impact results are reported.

This is actually an ongoing process. It is important to continue monitoring through a robust impact management & measurement process, in which we carry out periodic validations of impact measurements.'

What role do private markets play in achieving impact objectives?

'Private markets offer various investment opportunities with the potential for direct impact. (Impact) investing in private markets is generally characterised by a longer term, closer involvement with the companies or projects in which investments are made, and a wide range of financial instruments. This allows investors to exert influence in order to increase the intended impact.

Investments in private markets such as infrastructure, real estate, private equity, private debt, agriculture and forestry can contribute to solutions for climate change, biodiversity loss and social issues such as health and inclusivity.'

Can impact investing be combined with market-based returns? What role do private markets play in this?

'The idea that impact investing comes at the expense of returns is outdated. We are a “finance first” impact investor, so if there is no prospect of a market-based return, we do not invest. Fortunately, we are increasingly seeing investment opportunities that meet our requirements for impact investing, especially in private markets.

As mentioned earlier, selecting the right investment partners is essential for achieving both financial and impact objectives.'

How do you deal with the limited transparency and reporting requirements with regard to impact in private markets?

'It is essential to make clear agreements prior to an investment about the impact to be achieved (including KPIs), the method of measurement and the frequency of reporting. The objective here is to arrive at a minimum level at which impact performance can be objectively validated.

For us and our clients, it is very important that the most relevant and material impact results are reported. This ensures an efficient process for both the investor and the investee. At the same time, the market is constantly evolving, for example with the emergence of impact benchmarks. We closely monitor these developments and optimise our reporting framework when opportunities for improvement arise.'

How does your platform help institutional investors find and assess impact funds in private markets?

'Our impact platform enables pension funds to choose from a range of investment solutions in the areas of climate, biodiversity, equal opportunities and health – both through internal and external funds and partnerships.

All options offered are subject to an impact due diligence process to limit the risk of impact washing. This gives pension funds direct access to economies of scale, cost advantages and specific impact expertise.

Cooperation and knowledge sharing create scale and access to selected impact managers. The platform is aimed at Dutch institutional investors, which means that the solutions meet their requirements, for example in terms of structuring and reporting.'