The Belgian consultancy market has seen a greater foothold gained by foreign players, particularly Frank Russell, William Mercer and Watson Wyatt in the last year, responding to the trend within the country's larger pension funds for asset liability modelling (ALM) as a result of an increasing shift from balanced to specialist investment management and a growth in DC retirement schemes.
However, a number of investment managers sense that the consultancy shoe is becoming too large for the Belgian pension fund foot, with Anglo-Saxon investment practice being pushed to the fore and not wholly suiting the smaller scale Belgian investment scene.
Jean-Pierre Ysebart, director of the Capital Management Corporation at Banque Bruxelles Lambert, comments: From the consultancy questionnaires we have seen from foreign companies there is definitely a tighter Anglo-Saxon agenda to their advice, clashing somewhat with the liberal idea of pension funding in Belgium which accepts periods of over/underfunding for schemes.
"And the type of ALM specialist, risk type investment being put forward may be fine for the Belgacoms but not for the smaller funds, and we have been disappointed with some of the low added value for funds coming from mismatched advice and unrealistic benchmarks, such as measuring Belgian funds with 10-15% in US equities against the MSCI World index. " But Ysebart adds that the euro could be advantageous in offering Belgium the European muscle to repel such compulsion.
Jean François Schock, managing director at State Street Global Advisors in Brussels, believes the 'foreign' effect is less dramatic though: "There is certainly gradual movement to-wards the large international firms as investors look for a global know-how, particularly for multinationals .
However, Belgian consultants such as Pragma and Conac are still doing ex-cellent business, especially because the demand for things like new DC scheme design is increasing."
Sylvie de Cooman, deputy director at Banque de Groof, adds: "The real test of the advice currently being given by consultants to Belgian funds will come at the year end though, as the results of euro portfolios and benchmarks begin to unravel."
Hugh Wheelan"