NETHERLANDS - Ahold pension fund, the €2.3bn Dutch pension scheme of supermarket chain Ahold - which has 213,000 employees and operates 2,970 stores in Europe and the US - has awarded a €2.1bn fiduciary mandate to Axa Investment Managers (Axa IM).

Publicity around the deal was kept to a bare minimum, most likely at the behest of Ahold pension fund.

Until recently, the Ahold pension fund remained one of the few Dutch pension schemes still managing a sizeable chunk of its portfolio in-house.

However, after returning 20.3%, 13.3% and 0.3%, respectively, in 2005, 2006 and 2007, the scheme of Netherlands-based food retailer Ahold reported a loss over 2008 of 19.2%.

Although the Ahold scheme's 5% alternatives portfolio did much better than its benchmark - losing 8.6% compared with the benchmark's loss of 37.2% - its equity portfolio lost 48.3%, a painful 6 percentage points below the benchmark.

The pension fund saw its solvency rate decline from 169.7% in 2007 to 101.9% in 2008, a 67.8 percentage point drop.

Over the course of 2009, the fund reported a return of 11.4%, while its coverage improved to 116.4%. Preliminary numbers for 2010 show a coverage ratio of 112%.

The deal with Axa IM was reached in February and took effect from 1 April. Consultant Avida International advised the Ahold scheme in the search and selection process.

The mandate is a major win for Axa IM. The French asset manager, with roots in the insurance industry, has so far had a limited foothold in the Dutch fiduciary market.

In September 2007, Axa IM won its first Dutch fiduciary mandate - the three pension funds of food producer Royal Cosun awarded Axa with a €600m fiduciary mandate.

Last March, the asset manager won a €200m fiduciary mandate from the Dutch scheme of energy company BP.

According to the bare bones press release announcing the Ahold deal, Axa IM will be providing strategic investment advice, as well as services relating to portfolio and risk management, and fund selection.

In the wake of the credit crisis, Dutch supervisor DNB has been adamant that pension funds not relinquish control of asset management to fiduciary managers and that trustee boards should remain in control at all times.

Although no details of the Ahold mandate have been provided, it seems likely that the fiduciary contract awarded to Axa IM will be more limited in scope than traditional fiduciary mandates of yore, and that the pension fund board will be intimately involved with key investment decisions.