The Amsterdam rain is falling against the windows as we see a market rally on the computer screens. All good timing for the conference I am attending with the theme ‘What now for Pension Funds?’ Umbrellas and coats are stashed away and the conference organisers are checking names and herding people into airless rooms with neat rows of tables and chairs. We inspect our digital toy that allows us to both see who is at the conference and also how far away somebody is from us. It is a clever but unwelcome radar system. I am surrounded by fund managers and seem to catch the smiles of the marketing people.

The talks are interesting: ‘Why pay fees for predicted alpha when all you get is beta?’ or ‘Will fiduciary management provide value or broken promises?’. Both topics concern me greatly and, predictably, I am approached at the coffee break. ‘Mr Mullen, how nice to see you. Did you enjoy the session?’ I want to say, ‘We have not met before, although I see from your badge you belong to Total Disaster Asset Management which has underperformed every year for the last five.’ But I don’t - we pension funds have to remain polite, ‘Ah yes, nice to see you after so long, the talks were interesting.’ ‘Yes, we met in 2006 and talked about absolute return strategies. Have you allocated to managers yet?’ ‘We did not, because we did not like the fees. We also found it difficult to understand what the managers do. We like transparency.’

‘Well transparency in our trading strategies is hard to give our clients. The markets move so quickly we have to be nimble and flexible. That way we can take advantage of the exceptional opportunities we see.’ ‘Does that justify the fees?’ ‘We charge industry fees.’ ‘And performance?’ ‘Disappointing, but that’s the markets for you.’ ‘Yes, of course.’ And then I am saved by my former class mate Stephane, now at Icarus Portfolio Management.

Icarus is a fiduciary manager, based in Brussels. There is no Anglo-Saxon make-up in this firm, and he wears the sovereign bond over-weightings with pride. ‘Stephane, do you know James from Total Disaster?’ They shake hands. ‘Stephane, James was telling me that nimble and flexible managers can still produce that elusive alpha, whereas I think your brand of fiduciary management is more concerned about getting the correct beta exposure.’ ‘Well both philosophies can exist side by side’, suggestes Stephane. James backs off and disappears.

‘Would you use James’ funds in your line up of external managers?’ ‘No, most of their returns come from the underlying market exposure that we have anyway’. ‘And how is the Icarus performance?’ ‘Disappointing, but don’t tell anyone. We are now long cash, but our clients sleep better knowing everything is outsourced.’ I smile. ‘And there we differ - we prefer to have cash under our own mattress. We like being nimble and flexible.’