A handful of Dutch pension funds, including Grolsche Bierbrouwerij and Pensioenfonds Openbare Bibliotheken, have left Caceis as their custodian over the past 18 months, IPE has learnt.
Caceis, a custodian fully owned by French bank Crédit Agricole, struggled to provide investment reports to its Dutch pension fund clients for a period of time due to problems with its admin system.
According to president Els Janssen of Pensioenfonds Grolsche Bierbrouwerij, the Dutch brewery, Caceis’ services were under pressure “for some time” in 2020 and 2021. She said: “Certain investment reports, including those on interest rate hedging, could not be delivered on time or in full.”
This led to concerns at the pension fund about the “continuity and quality of the custodian’s services”, Janssen added. In addition to investment administration, custodian banks also provide regular investment reports to their clients.
Northern Trust snatches disappointed clients
Pensioenfonds Grolsche Bierbrouwerij switched to Northern Trust as its custodian as of this year. Pensioenfonds Openbare Bibliotheken, where Grolsch chair Janssen is also on the board, made the same move a little earlier.
Northern Trust claims a market share of about 30% in the Netherlands. That would make it the second player in the market for pension custody after Caceis.
Pensioenfonds Openbare Bibliotheken was not an investment reporting client of Caceis and therefore was not directly affected by the problems at the firm. Nevertheless, the decision was made to leave “because we did see that things were not going well there,” according to Janssen.
Fees also played a role, as Northern Trust offered a discount for custodian services compared to Caceis to both Grolsche Bierbrouwerij and Openbare Bibliotheken, said Janssen. It is not known which other funds have quit Caceis and who their new custodian is.
Director Sikko van Katwijk of Caceis, which remains the market leader in pension custody in the Netherlands with a market share of about a third, confirmed the departure of “less than five pension fund clients” over the past year due to problems with investment reporting.
The origin of these problems was the migration to a new administration system, Van Katwijk said. After the former Netherlands-headquartered Kasbank was acquired by Caceis in 2019, it switched to its new parent’s administration system in 2020.
Van Katwijk said: “In the summer of 2020, we had problems with the timing and quality of our investment reporting. As a result, we had to request an extension of the reporting deadline. This resulted in some clients being dissatisfied with that period and therefore leaving. That is painful, because it has never happened before that a handful of customers decided to leave at the same time.”
As a result of the problems, customer satisfaction at Caceis dropped dramatically. “Our net promoter score, a measure of customer satisfaction, dropped below 6 [on a 10-point scale] due to the problems with the reports. Since then, the problems have been resolved and we are back to a score of 7.5,” said Van Katwijk.
According to the director, more funds were concerned about the quality of service.
“But we were able to retain them by engaging in open dialogue with them. We also had a meeting with customers to discuss the problems, to analyse why things had gone wrong and to determine what we could do differently in the future,” Van Katwijk added.
This article appeared originally in Pensioen Pro, IPE’s Dutch sister publication.