The array of asset managers looking after Dutch pension funds assets on an externally managed basis confirms the emergence of Achmea Global Investors as the most powerful force in the land, according to the latest listing prepared by the Bureau Bosch consultancy, based in Nuenen. The group’s arrival at the top of the tree was due to the merger between the Achmea insurance group and the specialist pension investment and administration group PVF Pensionen last year.
The figures, from the bureau’s Dutch Investment Manager Survey, due to be published shortly, show that Barclays Global Investors maintains its high position due to the continuing growth in indexed asset management, which also accounts for State Street’s prominence in the list.
Schootse Poort is the third-party pensions investment arm of electronics group Philips. As Bureau Bosch comments, at the top of the institutional market it is mainly a Dutch and US affair, if BGI is treated as a US group. The UK managers are notable by their absence, though some of the groups listed from other countries will be managed from London.
The survey finds that the market share of indexed asset management is showing an explosive increase, with indexed assets accounting for $50bn (E55bn) in assets. In 1997, the survey says, these assets came to $19.5bn and were only $7.2bn in 1993.
The total invested by pension funds in the Netherlands amounts to $375bn, which gives indexed assets a market share of around 13%. The appearance of BGI as the second biggest asset manager there reflects this dramatic growth.
This figure, the survey explains, is in respect of full replication indexation. “If sampling – taking a representative selection of the index into account – the proportion going into indexation would be much higher.”
The largest Dutch index pension fund manager is ABP, which the survey says accounts for one third of the money managed by BGI. Along with State Street and banker Theodoor Gilissen, these form the bulk of index management in the country, says Bureau Bosch.
The survey attributes the overall growth in indexing to the advantages it offers in terms of “modest costs”, as it makes research redundant and reduces tranaction numbers.
The aspect of eliminating underperformance is also important, the survey states. “This is a particular ly strong argument for industry-wide since an exemption for companies to join these funds has come into force.”
If the performance of industry-wide schemes are below a given benchmark, an employer is able to take the pension money elsewhere. “If these funds wish to survive, their performance must be close to the benchmark.” Fennell Betson