NETHERLANDS/ITALY - The Italian pension fund industry could develop more towards the Dutch model, Jean Frijns, consultant to the Norwegian Government Pension Fund, has suggested.
A successful merger deal between the Dutch pension giant ABP and asset manager Cordares will change the Italian pension fund industry, Frijns, former chief investment officer of ABP, told delegates at the IPE Awards seminar in Vienna yesterday .
He listed "more risk-sharing arrangements, reduced dependency on the plan sponsor, stricter funding rules and more transparency," as the main influences and ideas Dutch asset managers could bring to the market.
He added "corporate sponsorship of a pension fund is not the most comfortable idea" in any country but said he would "advocate consolidation" in other European countries into Dutch-style industry-wide pension funds.
"On average, smaller pension funds do not perform worse than larger funds but the dispersion in results is much higher among smaller funds," he explained.
He added: "The possibility of ending up in a very bad pension fund is much higher for members of small pension funds than in big ones. Members are much better off in industry-wide funds as they are more reliable."
Drawing a historic comparison, he noted in the 1980s asset managers seeking European mandates "changed how Dutch pension funds looked at asset management".
"They introduced the idea of benchmarks and changed portfolio construction," Frijns noted.
For some time, he added, there was a gap in expertise between Dutch and asset managers but "the Dutch soon caught up".
In a similar way, asset management in Italy could now change with influences from non-domestic asset managers, Frijns pointed out.
Pension fund ABP and Dutch asset manager Cordares announced earlier this week they will enter into merger talks. Cordares has operations in Italy and the Netherlands.