NETHERLANDS - Dutch pension funds are recalling  their loaned securities in Fortis Bank to prevent activist hedge funds benefiting from the implicit voting rights on Fortis' bid for ABN Amro.

The €211bn ABP civil service pension fund and the €86bn PGGM healthcare scheme have retrieved all of their securities on loan because Fortis is on the full voting list of both funds.

Fortis will make a decision on August 6 on its bid for ABN Amro but for the bid to be successful, three-quarters of the meeting need to support the release of €13bn worth of new equity to finance the takeover - one-third of Fortis' total market valuation.

"Following our policy for events-driven situations, we have recommended our members recall their Fortis' securities. Our impression so far is that there is quite a wide compliance, including large players," says Rients Abma, executive director of Eumedion, a corporate governance platform for 60 institutional investor members which, between them, have assets under management of over €1trn.

"Our members must be able to take the important decisions themselves. On the other hand, they want to prevent parties, using members' securities, forcing through decisions which are not in line with members' policy," Abma explained.

According to its website, PGGM has invested 0.26% of its assets in Fortis while an ABP spokesman estimated his scheme's stake in the bank is also "a couple of tenths of a percent".

ABP's policy on securities lending is it explicitly forbids any borrower to use the securities only for the purpose of gaining voting rights. Both schemes declined to give further details of its loaned securities.

Elsewhere, ABN Amro's assets under management rose by €31bn to €211bn compared to the first half of 2006, it reported. Its total operational income increased by 16.6% to €485m, while the operational profit before tax rose by 15%.

According to the bank, the level of assets under management at Artemis, its asset management arm, continued to grow strongly. Its asset mix has remained stable this year, with 46% invested in equities, 36% in fixed income and 18% in cash and other asset classes while the value of the private equity portfolio increased by €73m to €2.3bn.

These figures come at the same time as ABN Amro has withdrawn its support for Barclays' improved takeover bid of €66bn, which is 10% lower than the rival the bid of Royal Bank of Scotland, Santander and Fortis.

ABN also pointed out Barclays' offer is mainly in equity, while the three other banks are prepared to pay mainly in cash.

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