A couple of weeks ago, my old friend Pim came over to the Wasserdicht offices in Utrecht to tell me about his new proposition. I’ve known Pim for many years and he has pitched to me many times, although each pitch has been from a different company.

Pim is currently at a German boutique house that specialises in green energy projects and other alternatives and is keen to talk me about the role of infrastructure and long-term investments.

‘Pieter, it’s been a long time,’ Pim says as he arrives. ‘I know,’ I reply. ‘The last time you were at BIG Asset Management, I seem to remember.’ 

‘Now is the time to talk about the the role of renewables in your portfolio,’ he says. ‘We are currently raising capital for a closed-end infrastructure fund and many of your peers are interested. Of course, we would be delighted to have such a prestigious investor as Wasserdicht on board,’ Pim says.

I tell him not to expect much interest from us due to the renewables investments in our partnership with PensionKøbenhaven, which has already made its first investment, in a wind farm off the coast of Denmark, with more in the pipeline.

Pim is not deterred, and hands me a thick pile of information to consider. ‘I don’t say don’t do it yourself,’ he says. ‘In fact, many of our investors combine direct investments with closed-end funds for diversification in areas where they don’t have expertise.’

I tell him that we haven’t even come on to the issue of costs, which is a very important topic for our trustees at the moment. 

In fact, the Wasserdicht pension fund trustees have even commissioned one of the international consultancies to look at our investment costs and benchmark them against our peers around the world. 

‘As you know,’ I tell Pim, ‘costs are a really important issue here in the Netherlands at the moment. All pension funds have to be transparent about their asset management and administration costs and our participants frequently let us know what they think. The problem is, they think we are using money that should be paying their pensions to line the pockets of rich private equity and hedge fund managers.’

Pim is shifting in his seat. ‘Well Pieter, you know it’s not quite like that,’ he says. ‘And we haven’t even got on to our performance track record, which should offer a great deal of comfort to even the hardest-nosed trustee or pensioner. It really is very handsome indeed.’

‘Unfortunately, that’s not quite the point,’ I say. ‘The problem is that our annual asset management cost is 53 basis points –  exactly at the median of all pension funds in the Netherlands.

‘Our trustees are worried that if we add extra fees we will then be among the funds with above-average costs. And they think that won’t look good. 

Pieter Mullen is investment director at Wasserdicht Pension Funds