Pension funds should be careful entering into agreements with NN Investment Partners until there’s more clarity about the future of the asset manager, according to consultants. But existing customers have little reason to be worried, they believe.

“Uncertainty about the strategic direction of an organisation never has a positive impact,” said Frans Verhaar of the consultancy bfinance, responding to last week’s news that NN Group is putting up its asset management arm for sale.

“You want to be relatively sure that the organisation you pick today will not turn out to be a radically different one in a few years’ time,” Verhaar added.

Paul Boerboom, director for organisational advisory firm Avida International, said that NN IP’s troubles are not exceptional. “At all asset management firms, things like this pop up at some point.”

However, uncertainty about future ownership can still be a reason not to select a firm. He added: “If I were to start a selection process right now for a fiduciary manager for example, I would adopt a wait-and-see approach.”

On the other hand, pension funds already have little to choose from these days as the fiduciary landscape in the Netherlands has been marked by consolidation in recent years, noted Bertjan Kobus of pension fund consultancy Sprenkels & Verschuren.

“If you’re really strict, you should also be excluding BMO because they are subject to a take-over [by Columbia Threadneedle]. That would leave only a handful of possible candidates.”

Current fiduciary or asset management clients need not immediately worry anyway, the pension consultants believe. “It’s important to keep your calm now,” said Boerboom. “NN IP is a decent company. Your money is safe there so for now I don’t see any reason to take action.”

A buyer is on the horizon’

Moreover, it seems a buyer for NN IP is already on the horizon. “NN IP has told me there will be clarity within a few months,” said Kobus. “It’s unlikely the process will go this fast if you haven’t yet given it a start. I therefore suppose that it has progressed further than they have announced officially.”

Kobus declined to speculate on who the prospective buyer might be. Ray Soudah, founder of Millennium Associates – a firm specialised in M&A consultancy in financial services – told IPE that large French and US asset managers are the most likely partners for NN IP.

If a foreign firm were to enter the Dutch fiduciary market, this would be a welcome development, according to Boerboom. “I think the market has become too domestically focused in recent years, so I would welcome a foreign player to introduce new ideas on how to deal with the low interest rate environment and other problems pension funds have to confront.”


Because asset management as well as fiduciary management are increasingly becoming a scale game, it seems the likely outcome of the NN IP sale is the creation of a larger asset manager. NN IP manages approximately €300bn, two thirds of which are insurance assets of parent firm NN Group.

“Scale is important. A situation where more assets are being grouped together seems probable, as the consolidation trend in asset management is still very much alive,” said bfinance’s Verhaar.

But Soudah disagrees with the notion that scale is all-important. He said: “All clients want is good investment performance, not scale. Many large mergers end up losing clients as performance deteriorates, so the logic isn’t sound.”

But, he added: “Egos always want to buy. All they talk of is needing to have one trillion in AUM to compete, but that’s nonsense.” He mentioned the merger of Standard Life Investments and Aberdeen Asset Management (which was recently rebranded as Abrdn) as an example of such a botched merger.

Avida’s Boerboom, who is also an M&A consultant in asset management, agreed scale is not all that counts. He said: “Scale is an old-fashioned term. In an M&A process, the client interest should be front and centre, not the interest of the shareholders.”

‘Important to keep insurance assets’

It’s important for pension fund clients that NN IP will continue to manage NN Group’s insurance assets which total around €200bn so NN IP keeps sufficient scale, said Kobus.

He said: “Insurance assets often mirror pension funds’ matching portfolios, and we often see the latter are mostly managed by fiduciary managers. Especially with smaller pension funds, a major client basis of NN IP, this is a common practice.”

NN IP’s fiduciary pension fund clients include the funds Notariaat, Delta Lloyd, SNS Reaal, Public Libraries, Robeco, Scildon, Zoetwaren and Bakkers.

To read the digital edition of IPE’s latest magazine click here.