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Dutch pension manager PGGM is to lose a major fiduciary client as the occupational scheme for general practitioners, SPH, plans to split operational asset management and fiduciary management.

PGGM carries out the asset management for almost half of SPH’s €10bn of assets, with the remainder managed by groups including BlackRock and UBS. The move is designed to improve governance, the scheme said.

According to Johan Reesink, SPH’s chairman, decoupling of the advisory role from asset management must enable all players to fulfil their role “optimally and fully independently”.

In the scheme’s annual report for 2015, the visitation committee recommended paying more attention to the monitoring of managers, comparing of alternatives, and the possibility of replacing managers.

SPH said that the current investment mandates with PGGM would stay there, but that it would look for another player to carry out the fiduciary management.

According to a spokeswoman, SPH had just started the selection process and aimed to transfer the fiduciary management at the start of 2018.

It added that the new set up would not affect its investment portfolio, comprising 43% government bonds, 29% equity, 10% property, and 5% mortgages. SPH also has small allocations to commodities (4.4%), hedge funds (5.2%), private equity (0.1%), and infrastructure (2.6%).

Last year, the GP scheme invested €500m in mortgages at the expense of government bond holdings.

Splitting advisory and asset manager roles is an emerging theme in the Netherlands. Earlier this year, the €4bn sector scheme for bakers transferred its fiduciary mandate to NN IP from Lombard Odier, which also managed the pension fund’s European equity and fixed income investments.

Last May, the €1.1bn industry-wide scheme for private security (Particuliere Beveiliging) replaced its fiduciary manager PGGM with BMO.

At the time, Hans Kestens, the pension fund’s chairman, pointed out that BMO offered more choice in the selection of asset managers.

Anton van Nunen, seen as the founder of the fiduciary concept, said that the pension funds were among the last ones splitting asset management and fiduciary management, “as the combination of both at a single manager isn’t really logical”.

However, he also said that pension funds often made an exception for their matching portfolio, “as the line between very detailed advice on hedging and the subsequent implementation is thin”.

“Moreover, this secures a one-risk platform, short lines of communication and prevents the risk of misinterpretation of guidelines,” he added.

Van Nunen said that another reason for pension funds to stay with a combined asset and fiduciary manager, such as PGGM, was that these managers provided fiduciary management combined with efficient investment structures, such as funds with several external managers.

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