APG views 5G as catalyst for future innovation

For the Dutch pension fund manager, actively investing in the communications industry means keeping an eye on new technology, regulations, and consumer behaviour to continue to outperform their index.
APG views 5G as catalyst for future innovation

Dutch pension fund manager APG Asset Management is expecting low growth from the telecommunications market, which has been greatly impacted by government regulation, but believes that 5G technology has the potential to drive innovation in the sector. 

Henny Crauwels, senior portfolio manager of developed markets equities at APG, explained that the company views 5G as a catalyst of a lot of potential innovations, “like more immersive virtual reality and augmented reality experiences in virtual contacts,” he said.

Crauwels is responsible for investments in the communications industry at APG, and he and his team seek out and assess large companies in the telecom, media, and social media sectors in developed markets. APG’s portfolio in this sector includes stocks like T-Mobile US, Netflix, Facebook, Twitter, and The New York Times.


“New technologies like 5G could bring a new revenue stream, but traditionally, telcos have not been very good at monetizing new opportunities. For example, the new possibilities created by LTE have been monetised by technology companies — all the social media apps — and not by the telcos,” said Crauwels.

“With virtual reality becoming more real, there will come an even bigger need for regulation to counter fake news, like someone presumably doing or saying something, [but they are] not the real person [and are] deep-fake,” said Crauwels.

“With new network technologies, it could become easier to set up decentralised networks, surpassing the traditional telco,” he said.

Henny Crauwels,


APG had $565.5 billion in total invested assets worldwide as of June 2022, on behalf of its 4.8 million members.

The Dutch pension provider’s portfolio is heavily diversified, and over 90% of these investments are actively managed.

“This allows us to include the requirements of our pension fund clients’ responsible investing policies better. When we invest via managers, we also do so through segregated accounts in order to be able to get more customisation,” he said.

Throughout this time of macroeconomic and geopolitical economic uncertainty, the mission remains the same for the actively managed portfolio, which, for Crauwels and his team, doesn’t mean to beat the market on a day-to-day basis per se — but to outperform the index reflecting the average value of all the companies in their stocks universe.

“The first thing is to have a good understanding of the companies you invest in, [including] drivers of their performance and their vulnerabilities to external developments. You also constantly assess the risks of your investments not going the way you expect them to go,” said Crauwels.

To be successful as an active investor, one has to be humble about what you actually know and have enough offsetting positions to compensate for one going wrong, while making sure your portfolio does not tilt too much towards a certain style, he added.

“We strive to get our portfolio performance out of longer-term fundamental trends that are company specific and spend a decent amount on discussing what is the risk involved,” said Crauwels.

Crauwels and his team only focus on these investments in developed markets, mainly in Europe and the United States.  

“For Asia, only listed companies in Hong Kong and Singapore are part of our universe and that is a very small number. At the moment, there are only 3 companies in that region [that are] part of our MSCI benchmark,” he said.


When investing in companies, Crauwels said his team looks at the investment in the context of its market structure.

For example, in the telecommunications industry, local regulation and changes in the competitive environment play an important role. For social media platforms, most of their income comes from advertising, and the main driver for this is the popularity of the platform by users.

“We follow user trends, where the eyeballs move to, how innovation is at the different companies and where they put their capex, how popular new products and platforms get. We also try to assess how well regarded the different platforms are by advertisers and how well they can answer to their needs,” said Crauwels.

Crauwels said that as the companies vary widely, it is difficult to formulate an answer on the Dutch fund’s broad expectations for the sector.

“We expect social media to show healthy growth over time, based on the ever-increasing usage and the growth of digital advertising, partly at the expense of other advertising means but also due to advertising being democratised by more SME (small and medium-sized enterprises) companies getting the ability to advertise on social media platforms,” said Crauwels.

Previously, SMEs did not advertise or were constrained to local free distributed advertising sheets or local newspapers, he explained.


APG’s stated mission is to not only invest for financial returns, but also to create a positive social impact. Sustainability and ESG criteria play an important role in the fund’s investment policy.

The impact on its communications industry portfolio is relatively limited compared to other portfolios, according to Crauwels.

“The main discussions are on data privacy. For telecommunications, we have some preference for companies that contribute strongly to connecting the unconnected,” he said.

“For the media, next to data privacy, assessing the way the companies deal with controversies, social division, and fake news are points of attention.”

Engagement is another important pillar in APG's investment policy, and as one of the world’s largest investors, the fund can have considerable influence on the way their investee companies operate.

“On behalf of our pension fund clients, we have regular communications with these companies and some are more receptive to comments than others. I think it is fair to say that at the least, we contribute to an increased awareness of these companies, together with other stakeholders,” said Crauwels.  

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