NETHERLANDS - Dutch pension funds should support the domestic financial services industry by ring-fencing capital for domestic investment managers, former foreign affairs minister Ben Bot has suggested.
The Netherlands risks being bypassed in the financial services market, unless it harnesses its €1trn pension reserves for the development of a domestic investment industry able to compete on a world scale, Bot argued.
According to Bot, who recently has been appointed as non-executive chairman of the $350m Dutch hedge fund Finles Capital Management, the recent takeover of ABN AMRO demonstrates Holland may be losing vital financial skills.
"We notice talent leaving for better-paid jobs in financial centres abroad, from where they keep on managing the same assets. We must prevent losing them," he said.
"By investing more domestically, institutional investors would benefit from the high level of financial services and regulatory support, the Dutch legal structure and the same language and business culture," Bot pointed out.
"We would like to place more capital with Dutch managers, provided they show the investment performance and have the necessary expertise. However, at the moment there are not many to select from," Rob van Kuijk, Finles' chief executive commented.
"At present, there are very good hedge funds in the Netherlands, which are struggling to attract domestic investments. The Dutch investment industry should have a better look at the opportunities at home," he added.
"The pension funds could invest with Dutch managers by pooling assets. We have the research facilities to find niche managers worldwide, and from the Netherlands we can operate cheaper than foreign managers," Van Kuijk claimed.
Bot does of course note performance must remain the main criterion for placing assets with Dutch managers. "After all, pension funds aren't charities," he added.
On the back of this, Ruud Hagendijk, chairman of the €58bn pensions provider and asset manager MN Services, said a change of policy is unlikely.
"Although investing in Europe can very well be done from Holland, for the best performance local markets need local managers," he stressed. "The same goes for boutique markets."
Albert Akkerman, CEO of SPF Beheer which manages €15bn of assets for the railways pension fund SPF and public transport scheme SPOV, supports Bot's appeal.
"In line with our preference to keep the management as close to us as possible using domestic expertise, we are already managing 70% of our assets in-house," he responded.
"There is very much talent in the Netherlands. And communicating domestically is much easier than dealing with far-away markets because of the time difference."
When it comes to emerging markets investments, however, SPF Beheer prefers to use local managers, since this is more effective through networks of large asset managers, Akkerman indicated.
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