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Dutch pension fund replaces BlackRock with F&C on hedging

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The €200m Dutch pension fund of supermarket chain Coop has replaced asset manager BlackRock with F&C for the implementation of its hedging policy against the interest risk on its liabilities. 

F&C has been tasked with the management of the pension fund’s entire matching portfolio, consisting chiefly of a liability-driven investment (LDI) mandate and two government bond mandates.

F&C said the mandate included the management of collateral, as well as the monitoring of counterparties.

In a joint statement, Jacqueline Bergervoet, chair of the scheme’s investment committee, underlined the “clear and transparent” composition of F&C’s LDI pools.

“This ensures interest risk is hedged in a logical and explicable way, and that the duration structure accurately matches the liabilities,” she said.

Bergervoet also praised F&C for its “pro-active advice and transparent accounting”.

According to the pension fund’s 2013 annual report, its matching portfolio was passively managed by BlackRock.

The Coop Pensioenfonds said its hedging policy was based on the development of interest rates.

As of the end of 2013, it had hedged 59% of the interest risk on its liabilities.

When asked why it decided to drop BlackRock, the pension fund’s board declined to respond due to “reasons of confidentiality” and an ongoing review of its investment policy following the new financial assessment framework (FTK) in the Netherlands.

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