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Dutch pension funds are set to plough tens of billions of euros into risky assets in Europe, as their move to a system without fixed benefits supports the continent’s efforts to attract investment and bolster its defence sector.

Reforms being rolled out in the Netherlands could lead to its €2tn pensions industry — one of the largest in the world — boosting investment in private equity and credit investments by about 5 percentage points over the next five years, said the head of the biggest Dutch asset manager.

The “largest part” of the anticipated €100bn is expected to be deployed in Europe owing to “more attractive valuations” and a wish to have a “real-world impact”, Ronald Wuijster, chief executive of APG Asset Management, told the Financial Times.

He added that Dutch funds might be able to do “even more” to finance defence initiatives in the continent, saying that APG had already invested about €2bn in companies that contribute to the defence industry.

Wuijster’s comments came as the EU has been under pressure to raise defence investment, with former European Central Bank president Mario Draghi last year calling on the bloc to boost investments by €800bn annually to keep up with US and China. US President Donald Trump has also demanded governments shoulder a greater burden for Europe’s security.

“There used to be a penalty for private investments and for credit risk that is now diminishing, which increases the budget to take more risk,” Wuijster said.

He added that the reforms would allow investors to consider assets with “a slightly higher risk profile”, predicting an increase of “five-ish” percentage points in risky assets, as well as higher allocation to private assets and credit spreads. 

In 2023, Dutch senators passed a law to transition the country’s occupational pension system into a model in which pension funds no longer guarantee a fixed retirement income to members. The transition is expected to take place between 2025 and 2028.

The old defined benefit system pushed the schemes into liquid, low-risk assets such as government bonds by requiring pension funds to closely match assets with long-term pensions owed.

The funds will now be able to set target returns that can fluctuate with market movements, removing some liability driven constraints and increasing their risk appetite.

This was a significant step because “psychologically, it puts the funds closer to regular lifecycle investing . . . and on that measure, Dutch pensions are probably taking too little risk”, Wuijster said. 

ABP, which is responsible for the pensions of Dutch civil servants and is by far the largest fund managed by APG with €544bn of assets, expects to transition to the new system by 2027.

At the end of last year, just over a quarter of ABP’s assets were in private markets. About 40 per cent of its private equity exposure was in Europe, which also had 57 per cent of its global allocation in private credit.

Wuijster said this geographical balance could continue under the new system, and that the shift into private assets and credit would be “a very gradual process” taking place “over the next five years”. 

Brendan Carr, who was picked by President Trump to chair the Federal Communications Commission, said he’s ordering an investigation into the Walt Disney Co. and its ABC television network over concerns that they are “promoting invidious forms of DEI discrimination,” referring to diversity, equity and inclusion practices.

In a letter to Disney CEO Robert Iger, Carr said the FCC’s Enforcement Bureau will review whether Disney or ABC have violated any FCC equal employment opportunity regulations. He added that the probe will apply to both past and current policies.

“Numerous reports indicate that Disney’s leadership went all in on invidious forms of DEI discrimination a few years ago and apparently did so in a manner that infected many aspects of your company’s decisions,” Carr wrote on Thursday.

The inquiry comes after Disney scaled back its diversity efforts, either by dropping certain initiatives or softening language around DEI.

Among the changes, Disney+ shortened its warning about racist stereotypes on certain classic movies, like Aladdin and The Jungle Book, removing a longer message written in 2020 that also expressed the company’s commitment to an inclusive community.

Last month, Disney also told employees it would replace “Diversity & Inclusion” for “Talent Strategy” as a performance factor to evaluate executive compensation, Axios reported.

In the letter on Thursday, Carr said although he acknowledged Disney’s recent efforts, he wanted to make sure they were not just surface-level, adding that “all discriminatory initiatives” needed to come to an end.

“Although your company recently made some changes to how it brands certain efforts, it is not clear that the underlying policies have changed in a fundamental manner,” he said.

Carr took issue with Disney’s Reimagine Tomorrow initiative, which he accused of being a “mechanism for advancing its DEI mission.” The initiative’s social media described itself as a platform meant to amplify “stories and storytellers that inspire a more inclusive world.” While some of its social media accounts remain active, the Reimagine Tomorrow website itself was taken down last month, according to archived versions on the Internet Archive. Axios first reported the website deletion.

Carr also cited a 2020 memo outlining ABC’s updated inclusion standards, which required at least 50% of regular and recurring characters must be drawn from “underrepresented groups.” The same applied for actors and writing staff, according to The Hollywood Reporter.

In a statement, Disney said: “We are reviewing the Federal Communications Commission’s letter, and we look forward to engaging with the commission to answer its questions.”