GERMANY – Chemie Pensionsfonds, administered by HVB, has announced its initial fund strategy as the first cash flows from December begin to roll in – the fund is now around 10 million euros in size.
Around 400 firms have signed up for the new fund which was established for the German chemicals industry, and around 5% of the total employee exposure are now contributing to the fund – around 10,000 beneficiaries contributing on average one thousand euros.
Investments into equities have been formalised, and an initial passive strategy has been adopted, with State Street Global Advisors named as one of the fund managers.
Says Carsten Eckert, managing director of HVB Group’s pension arm: " we have decided to commence with a passive management strategy and use the large world indices as benchmarks as it gives the best diversity. The cost of asset management has to be monitored and employing passive managers provides us with the best cost efficiency."
Eckert added that the fund may move to an active satellite model later in the year.
Fixed income assets are currently managed in-house, and use benchmarks such as the SSB Euro BIG and REX.
ECOFIN has been appointed as a neutral investment advisor and manager selector, and HVB sister firm, Pension Consult, is providing the marketing for the fund.
"The fund has attracted more interest than we expected, and we are really glad it has been so successful. The social partners are also pleased with the outcome, and there is so much potential for growth given only 5% of employees exposed to the fund contribute. There is also potential for more companies to join, so we are very optimistic about the new fund," says Eckert.
Chemie Pensionsfonds marked the first of the new pensions vehicles in Germany, set up by the German federation of chemical employers’ associations (BAVC) and the mining, chemical and energy Industry union (IG BCE) to provide a scheme for all employers in the chemical industry and those organisations with close links.