A 60-billion-euro Dutch pension fund has announced its withdrawal from the US market, turning instead to European assets. While the symbolic significance of this move is substantial, analysts believe the likelihood of Europe engaging in large-scale "weaponization" of capital is low.
The Dutch pension fund PME plans to increase its investment in European assets and gradually exit the US market, a move intended as a response to policy shifts from across the Atlantic.
PME Chairman Alae Laghrich stated on Thursday that the United States "is no longer the reliable ally it once was." He cited the Trump administration's trade tariff policies, along with what he termed "threatening behavior and non-compliance with existing agreements," as reasons for the fund's decision.
Laghrich acknowledged the undeniable importance of the US economy but argued that the current political climate makes PME's investment in various European opportunities, including the technology sector, a rational choice.
The fund, which manages approximately 60 billion euros (equivalent to $718 billion) in assets, stated that its goal is "not only to generate returns but also to protect the forces shaping the future, keeping them within the Netherlands and Europe, thereby enhancing economic, technological, and industrial independence and resilience."
This statement comes as financial markets speculate that European funds might choose to reduce their holdings of US assets in response to policy decisions from the White House. Data from the US Treasury Department shows that the European Union holds over $10 trillion in US assets.
PME has already begun scaling back some of its exposure to US assets. Last year, the fund announced the termination of its partnership with BlackRock, citing an assessment that the world's largest asset manager was no longer acting in its best interests on issues such as climate risk. This decision led PME to withdraw 5 billion euros in equity mandates from BlackRock.
Earlier this month, the Danish pension fund Akademiker Pension stated it would exit the US Treasury market in response to Trump's policies. Although the fund held only $100 million in US Treasuries as of the end of December—a relatively small amount—the symbolic significance of the move was enough to briefly push US Treasury yields higher.
According to a previous Bloomberg report, another Dutch pension fund, ABP, reduced its holdings of US Treasuries by approximately 10 billion euros to 19 billion euros over the six months ending last September.
However, many strategists suggest that the possibility of European asset managers engaging in large-scale "weaponization" of capital is low, as such actions could escalate tensions and would likely harm investors within the region itself.
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