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PGGM considers offloading hedge fund platform

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PGGM, the Dutch pension asset manager, is considering selling its managed account platform.

Ruulke Bagijn, CIO for private markets, said PGGM had been approached by “a number of interested parties about a potential acquisition of its managed account platform”.

The €155bn asset manager, whose main client is Dutch healthcare pension fund PFZW, developed the platform in 2010 to manage its clients’ hedge fund portfolios.

Bagijn said interested parties had approached PGGM “as a consequence of PFZW’s decision to exit hedge funds”.

Last month’s announcement by PFZW that hedge funds would no longer be a strategic asset class raised questions on the role of the platform in PGGM’s business.

In July last year, the departure of Jan Soerensen, PGGM’s head of hedge funds and main contributor to the development of the platform, also suggested the asset manager would re-think its strategy.

Sorensen went on to found Tang Financial, a hedge fund replication business.

PFZW has specified that while hedge funds are not a strategic priority any more, hedge fund-style passive strategies will be considered.

Bagijn added that the company was “currently evaluating the different options for the future of the platform.”

The platform was developed using the know-how and technology of Paris-based Lyxor Asset Management.

At one point, as much as 5% of PGGM’s assets were invested in hedge funds on behalf of clients.

PGGM’s proprietary managed account platform, called IMAP (Institutional Managed Account Platform), is based on Irish QIF fund structures.

The platform is a plug-and-operate system, where template contracts exist with a suite of different service providers.

For each investment held on the platform, the necessary service providers to facilitate the particularities of the investment are plugged in.

Bagijn added: “While the platform was built for hedge fund investments, it can facilitate any investments where the preferred vehicle is an Irish QIF structure.”

Other Dutch pension funds have left the hedge fund sector.

The industry-wide scheme for metal workers PMT announced last year that it would divest its €1bn portfolio because of cost concerns.

PME, another pension fund for the metal industry, also divested from hedge funds due to high costs and unattractive returns.

The US’s largest pension fund, CalPERS, announced its exit from the hedge fund sector last year, prompting worries that other large pension fund would follow suit.

However APG, the €343bn Dutch asset manager owned by public sector pension fund ABP, continues to invest in hedge funds based on the positive performance of its portfolio.

In 2013, APG’s hedge fund portfolio recorded a net return of 6.19% against management costs of 4.36%.

 

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