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IPE special report May 2018

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BP forms golden circle

BP Amoco has drawn up a golden circle of preferred investment providers for pan-European investment and related services to the group’s e500m Continental European pension plans.
ABN-AMRO Asset Management, ING Investment Management, State Street Global Advisors (SSGA) and Winterthur – part of the Credit Suisse Group were selected following an 18 month review of 14 international investment groups.
Gary Hibbard, BP Amoco’s international pensions co-ordinator, comments that following the euro introduction the group saw the opportunity for more efficient European investment co-ordination: “Fees have been structured on the basis of our total assets under management in Europe, not on mandates or different countries. We think this will save us a very considerable sum in terms of basis points over time.”
Hibbard sees the major savings coming through co-ordination though. During our due diligence process we found situations where managers in one country were trying to sell out of a stock or a sector, while at the same time managers of another scheme were buying in. This is basically a passive fund but with a much higher cost base – if that is what we wanted we might as well go for a passive structure.”
He adds that access to the highest quality managers should ensure the funds also get the best results. And he notes that the exercise makes sense in risk terms: “We can protect ourselves against unexpected losses through this sort of co-ordination.”
Hibbard says that BP Amoco’s local schemes will retain an independent choice of asset managers, however. We are a very devolved company.”
Brussels based consultant Pragma advised on the project implementation. Hugh Wheelan

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