The Second AP fund has invested in a social bond issued by the Dutch bank NWB. The bond is the bank’s first social bond and is a so-called “Affordable Housing Bond”.
The purpose of the bond is to raise awareness about the Dutch housing system and to finance lending to residential buildings and to provide solutions for cheaper housing for low income citizens and groups who find it difficult to get housing. AP2 conducted its first investment in a social bond in 2014 and has, since then, invested in a number of bonds focused on social issues. The return needs to be similar to other fixed income investments with similar credit risk.
Social bonds fit well into the Second AP Fund’s global interest rate portfolio as it broadens the fund’s ESG work and provides opportunities for further diversification and is a way to combine good return on capital with allocation of investments in important and good social project.
Link to NWB’s press release.