To obtain some perspective on the structure of who manages what in the Dutch institutional marketplace, the total of assets managed by the 68 asset managers we have identified as being active in the Netherlands amounted to E275.6bn, as at the beginning of 2001(1). This figure excludes assets in their own pension funds.
By contrast, figures relating to the second quarter of 2001, show the total of Dutch pension fund assets coming to E446bn. Assuming not much change within the value of the figures between these two dates, this implies that some 62% of pensions assets are externally managed, with the balance of 38% being managed in-house. The exact proportion of external money could even be higher as a number of smaller, private managers, who look after modest sums of pension assets, did not participate in the investigation. As Graph 1 shows, outsourcing of asset management is still increasing in the Dutch market.
Of the 68 investment managers, the top 10 managers run portfolios amounting to E213bn, or 77% of total Dutch institutional externally managed assets. This shows that only a small number of companies manage the lion’s share of Dutch institutional assets. A number of small managers concentrate on niche products.
Dutch managers still handle a significant proportion of local pensions assets and in number dominate the top-10 ranking. The two non-domestic asset managers are represented in this top grouping, namely Barclays Global Investors and State Street Global Advisors. These two managers score the highest increase of managed assets, as together they run E62.6bn in total. As both are index managers, this reflects the growing popularity of index-tracking and enhanced indexing in the Netherlands. That fees of index managers are relatively modest may explain why the domestic managers have not challenged for indexed business.
In the top-20 rankings, seven foreign asset managers are represented. And in the grouping just below this, foreign managers are dominant. The pattern is that foreign managers dominate the very top segment thanks to their indexing prowess, and then the smaller segment, perhaps more specialist areas, with local managers dominating the upper and middle ground of the marketplace. On the private client and retail markets, the Dutch managers hold a much stronger position, compared to the institutional market.
A growing number of foreign managers have opened up their own sales offices in the Netherlands, employing Dutch staff, such as: Dresdner RCM Global Investors, Metzler Asset Management and Julius Bär. Recently, Dexia took over Kempen & Co and merged this bank with Labouchere. The bringing in of staff out of London or Switzerland is practiced by other managers. And some managers have called it a day in the Netherlands and ended their presence in the country, as Credit Suisse Asset Management did after a relatively short time.
The accumulation of assets managed by foreign managers is still increasing. Of the E275.6bn in institutional assets, we estimate that E88bn is managed by foreign companies, equivalent to 32%, with the remaining 68% in local hands, see graph 3. It should be noted, in this context, that our survey treats an investment manager as belonging to a foreign parent, but with a fully-fledged Dutch research staff, as a domestic manager, such as Lombard Odier.
The fastest growing managers in the market are BGI, State Street Global Advisor, ABN AMRO and ING, but others, including Robeco, Wellington, Vanguard and Van Spaendonck (co operating with Robeco) are growing quickly. Also coming onto the scene are a number of Dutch pension funds who are now offering their services as commercial asset managers to pension funds, such as SPF Vermogensbeheer and SFB Vermogensbeheer and MN Services, who are following the example of AZL Beheer and Schootse Poort. This trend, we think is likely to develop as more plan sponsors treat their pension funds as a profit centre.
The Dutch institutional asset management market is dominated in number by US managers (24), followed by Dutch managers (19). The number of UK managers has decreased and now amounts to seven. New on the market are one manager from Denmark and two from Belgium (graph 4).
As ABP, Europe’s biggest pension fund, delivers its asset management services to a number of specific industry wide pension funds, we believe it is clear, as we noted in an earlier survey, that this supplier is gradually becoming a commercial investment manager. So, in the next edition of the survey, we intend to include ABP as a manager.
Measured by the total internationally managed assets by foreign managers active on the Dutch market, it shows that the largest worldwide managers are very successful in the Netherlands, in particular, BGI and SSGA. On the world stage, it has to be recognised that Dutch managers play a relatively modest role. It would be necessary to combine the assets of a number of Dutch managers in order for one of them to appear in the global top 10.
Frits Bosch runs asset consultancy Bureau Bosch in Nuenen in the
(1) Dutch Investment Management Survey 2002, published by Bureau Bosch