Dutch schemes lost €86bn in Q4
NETHERLANDS - Dutch pension funds' combined investments in equity and fixed income decreased by 19% to €529bn during the fourth quarter of 2008, according to De Nederlandsche Bank.
The pensions regulator attributed this drop not only to decreasing markets, but to the divestment of no less than €26bn of these assets, though the bulk of these were in fixed income as schemes sold €9bn of equity and €17bn of fixed income assets in the last three months of 2008.
According to DNB, pension funds' investment transactions showed a switch in the last quarter of 2008, after purchases of €37bn worth of securities during the three previous quarters.
A second reason for the large-scale sale of equity and fixed income was pension funds' need for liquidity, as this in turn allowed them to cover losses on currency derivatives as part of their currency hedging, DNB pointed out, noting schemes had combined investments in the US of €180bn at September-end.
The regulator also attributed the huge sale in securities to their need to rebalance their asset mix by selling fixed income assets, following the equity weighting decreased through market movements.
The pension watchdog said equity sold by pension schemes consisted of two-thirds of equity in US companies and institutions.
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