NETHERLANDS - Goris & Partners, the Netherlands-based investment consultancy, has expanded its operation to offer pensions fund boards a full, integrated management support service.
Erik Goris, managing director at Goris & Partners, told IPE that having worked with PME, the pension fund for metal workers, as well as the industry-wide schemes for transport workers and the furniture industries, it is now rolling out a service delivering all the assistance a pension fund might need, from custody and reporting to ALM, portfolio risk management and cost control.
The consultancy has been in existence for 10 years but has launched what it describes as ‘integrated' consultancy, and has hired support companies in the same way a pension fund would, to give them better control over the day-to-day complexities.
It will not be taking on all of the management work on its own as it has hired Axa IM to deliver the relevant multi-management and investments services while Northern Trust will provide custody and reporting services alongside cash management and tax-transparent pooling.
"What we have done for a number of clients is set up a management office if the pension fund was big enough to support its own management and administration," said Goris.
"But we noted that when we looked to the smaller and medium-sized pension funds there is a clear need for support, to help control their plan execution and control costs and to be able to more closely monitor the work of the service providers. Many of these companies are too small to set up their own organisations because it is too expensive and too difficult to retain people who run organisations on a daily basis. So we have developed an independent management office which could service multiple pension funds," he continued.
Goris said the business model allows it to fit around an existing fiduciary manager arrangement and assist in the supply of the remaining risk management services by looking first at what a pensions board needs to improve its governance and costs.
"We can provide an independent office to a pension fund, but that does not provide them with scale. By working with 10 funds there is scale advantage. So we have asked the service providers to agree to a service package and price level that is otherwise not available to smaller pension funds," he continued.
Axa and Northern Trust may have been hired to provide support services, however Goris was keen to point out that they could be replaced if they not deliver regular top quartile performance on returns, costs and service levels.
"The starting point has always been the independent management office. It does not matter which asset manager or custodian or service provider we team up with as long as they provide top quartile performance," he said.
"[Axa and Northern Trust] have an ideology which fits well within smaller pension funds. And we feel these are the top providers in their field. However, they will still have to perform in their top quartile fields of activity, whether it is in overall strategy, risk management, cash management, income. We will act early on expect to correct if things are not going according to plan. If there continues to be underperformance in terms of services or costs or performance or income, we will change providers," added Gorin.
Part of its deal with Axa IM means Goris & Partners will be given access to investment strategies not usually opened to institutional investors but reserved only for the Axa Group's own investments.
Though it could take some time to establish the new arm of the business, Goris & Partners also hopes it will one day be able to widen its independent consultancy service to the German and UK pensions markets.
"We are just rolling out into the Netherlands at this point, but this is a market that we know well and where we are very familiar with the needs of the target audience we have in mind. We have an idea that it can be used in other countries, such as Germany and the UK, where they have similar issues such as high execution control and costs. But that could be some time yet," added Goris.
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