NETHERLANDS - DNB, the supervisor of the Dutch pension sector, said it is increasing its review of real estate transactions done by with Dutch pension funds, on the back of fraud uncovered at the Philips pension fund, as well as increased volatility on the international real estate markets.
The main target of assessments will, according to the DNB, be to find out if there are conflicts of interest between the pension fund management and the real estate parties involved.
In a statement, David van As, DNB pension sector manager, said "at present, the DNB is assessing the situation at several Dutch pension funds. Our main focus in on the particulars of the respective financial transactions done with the respective parties."
The DNB is specifically reviewing the situation at six pension funds at present, but is also looking on a more general level at the management strategy of pensions fund in relation to real estate investments.
Van As reiterated the "integrity research" by the DNB had already been planned before the crisis at the Philips pension fund emerged, however, he suggests the recent discovery of fraud has been given additional food for thought and has proven the DNB's approach is necessary.
Van As also said it has become a necessity "as the risk profile of real estate investments is high". When asked about the main criteria behind the assessment of a pension fund, Van As said only funds holding a substantial real estate portfolio will be assessed, albeit no indication of volumes have been made by Van As.
The DNB official also stated it is not only pension funds which will be reviewed but third-party asset managers also involved in the investment process.
Moreover, the Philips pension fund crisis has already resulted in more and more pension funds are selling off part of their own real estate portfolio. (See earlier IPE story: Philips scheme dismantles real estate porfolio)
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