The policy of the Bfr11bn ($286m) Caisse de Prévoyance des Medecins, Dentistes et Pharmaciens (CPM) pension scheme for the Belgian medical profession of only offering specialist mandates combined with an intention to invest in the US, led the scheme quite nicely into the arms of three US asset managers.
The US equity portion of the portfolio is catered for by Sanford C Bernstein (large caps), Denver Investment Advisors (small-mid caps) and Genesis Investment Management (mid-large caps) all offering a level of specialisation that Karel Stroobants, the pension scheme's deputy director general, in charge of investments, said he was hard pressed to find in a Belgian or European-based manager.
The fact that all three operate from the US is of no consequence to him: Why should they be located in London? What is the added value of that? Having maybe a little bit more of a feeling of what is happening in the pensions business, that could be, but that's a marketing standpoint. I don't worry about that."
He sees the intrinsic strength of the US management approach, is simply their professionalism. He explains: "They have compliance departments, they have a good code of ethics internally, they are used to an anglo-saxon contract, they have what I call a Chinese wall between custody and brokerage. So it is all the experience of the anglo saxon model, which you find in these managers as granted, but with experience behind it."
He continues: "If you talk to the continental European managers, you always have to explain it to them. If you are talking to a Belgian manager and trying to put a Chinese wall between brokerage and management fee, it is quite difficult."
New York-based Bernstein has managed to make the leap from just managing US equity to Japanese stocks as well for CPM, which, ad-mits Stroobants, is quite a unique situation for a Belgian fund. "We felt the value approach of Bernstein for large cap is applicable all over the world," he says, adding, "Localisation of the market is becoming less and less relevant. It is more from a large cap view that sector analysation is important. So we have chosen them really for a specialist val-ue approach, large cap and for us it is independent where the manager is situated as long as it proves it has the research capability to do it."