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Dutch grocery industry fund to raise European small cap allocation

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NETHERLANDS – The €2.7bn pension fund for the wholesale grocery industry, Levensmiddelen, has said it will slightly increase its equity allocation to European small caps over the course of the year, at the expense of its high yield investments.

Additionally, the fund said it would terminate the 75% currency hedge for the Japanese yen due to its limited exposure to the currency, it noted in its 2012 annual report.

Levensmiddelen said that it hardly changed its investment policy last year, standing by its 47% matching portfolio and 53% return portfolio for additional returns.

The pension fund reported an overall result of 12.8%, outperforming its benchmark by 1 percentage point.

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Its matching portfolio – consisting of mainly European government bonds and interest swaps through liability-driven investment funds – to cover the interest risk of 75% of its liabilities, returned 14%.

The scheme’s return portfolio generated 11.8%, with its 37% equity allocation to developed countries yielding 16.2%.

While it lost 4.5% on its private equity investments, infrastructure generated 15.2%, according to the pension fund, which concluded that infrastructure was clearly recovering from the financial crisis.

The pension fund’s mainly Dutch non-listed property holdings delivered an overall return of 0.4%, with Dutch and US investments producing 2.1% and 9.6% respectively.

By contrast, Levensmiddelen said it incurred losses of 5.8% and 16.2% respectively on its non-listed property holdings in Europe and Asia.

The pension fund for the grocery industry reported administration costs of €97 per participant, and added that it spent 0.39% and 0.21% on asset management and transactions respectively last year.

Levensmiddelen has 74,650 active participants, 148,340 deferred members and 7,890 pensioners affiliated with 3,150 employers.

The scheme’s coverage ratio was approximately 108% at the end of July.

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