NETHERLANDS - Dutch SBZ, the €2.3bn industrywide pension fund for employees in the health insurance sector, has awarded ABN Amro Asset Management and Russell Investment Group a €2.2bn fiduciary mandate.
"The mandate totals €2.2bn and covers all asset classes in which the fund invests, with the exception of real estate," SBZ finance director Peter van Gemst told IPE.
ABN Amro will manage the strategic risk/return profile of the pension fund: "Among other things it will provide advice on portfolio structuring and will implement the hedging strategies for currency positions and interest rates," said SBZ in a statement.
Russell will take care of the multi-management side: "Russell Investment Group will be primarily concerned with the operational implementation of the investment policy through the selection and continuous management of external asset managers," said the scheme.
The real estate portfolio is mostly invested in "Dutch bricks" according to Van Gemst said. The fund did not want to burden Russell with such an allocation, and it falls outside of ABN Amro's task, he added.
The pension scheme sees the fiduciary mandate as a way to further diversify and optimise its investment portfolio.
"Moreover, against the backdrop of the forthcoming introduction of the new financial assessment framework (nFTK), SBZ wishes to ensure that it has an adequate integral risk management system in place," said Van Gemst.
Since 2001, SBZ had outsourced €600m to external advisers, while €1.6bn was managed in-house. Both external and internal managers underperformed, but this was only one of the reasons for the fund to go fiduciary. "The main reason was diversification," added Van Gemst.
Additionally, SBZ appointed Northern Trust as its new custodian. Van Gemst declined to mention who the previous external managers and custodian were.
"SBZ is the first Dutch pension fund to combine a fiduciary mandate for a local player that is familiar with the Dutch pensions system and a renowned international multi-manager," said Paul Boerboom, managing director of one of SBZ's consultants, Avida International.
"Like this, you spread the risk," Boerboom added, saying that the fund had found two managers who both have a strong expertise in their respective fields.