NETHERLANDS – Stichting Pensioenfonds ABP, the largest Dutch pension fund, has tapped Hermes to assist it on corporate governance issues on its €4.9bn Japanese equity portfolio.
The service will be provided by Hermes’ Equity Ownership Services. Hermes is an asset manager owned by the BT Pension Fund. The two schemes’ combined Japanese portfolio is worth around €8.3bn.
According to an ABP spokesman, Hermes will provide not only services on voting rights, but also communication with companies on corporate governance as well as a full engagement service.
And Hermes will advise ABP about the quality of corporate governance and boards of Japanese companies.
ABP said opted for Hermes due to its already established market position and relationships in Japan and the overall quality of research.
“As an institutional investor we find that corporate governance policies are an integral part of prudential investment,” said ABP’s investment head Roderick Munsters.
“A couple of years ago ABP has started with a corporate governance policy to use our voting rights worldwide. Japan is especially interesting as a case for active voting- and engagement policies, based on the fact that the corporate governance of Japanese companies still lags US and European companies.
“The combination with Hermes gives us the right voting power and impact that we are looking for.”
Hermes deputy managing director Charlie Metcalfe said it was “proud to be chosen by ABP to deliver the targeted engagement and voting services”.
“The combination of our investments via the index and the Hermes Focus Funds has made EOS a key asset in our overall approach to deliver additional value to share holders.”