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Irish segregated funds fall 5.1% in 2001

IRELAND- Irish pension funds’ segregated accounts fell 5.1% last year according to Mercer Investment Consulting’s combined performance measurement survey (CPMS). The figure compares to a 5.7% drop in Ireland’s institutional pooled pension fund assets

Mercer’s survey covers more than 200 Irish pension funds with combined assets of over e30bn. Figures for both pooled and segregated funds show Irish schemes faring better than their US and UK counterparts.

UK pension funds suffered their second consecutive year of negative returns in 2001 with a median of -9.7% according to Russell/Mellon CAPS figures released in March. Dutch funds, however, outperformed their Irish equivalents according to WM Company figures that show them losing an average 2.8% in 2001.

Senior investment consultant at Mercer IC Tom Geraghty attributes the relative outperformance to hefty Irish equity weightings. On average, funds in the CPMS held 18% of their portfolios in domestic equities.

Geraghty says that, along with pacific ex-Japan, Irish equities were one of the best performing assets classes last year with returns of 1.6%. A low technology weighting of 3% in the index and a predominance of old economy shares like financials and pharmaceuticals helped offset the drop.

It also helped keep the distribution of returns relatively confined. The worst performing fund in the CPMS lost 8.4% in 2001 while the best performer lost 1.5% over the same period.

As with other European pension markets in 2001, Ireland’s funds moved from equities to fixed income. At the beginning of 2001 the CPMS funds had 71.7% in equities, 18.9% in fixed income, 6.2% in property and 3.2% in cash. By the turn of 2002, equities were down to 70% while fixed income holdings rose to 20.2%.

Mercer’s figures reflect the Russell/Mellon CAPS UK findings that show value managers outperforming their growth counterparts.

Mercer IC has just published performance figures for institutional pooled pension funds for the first quarter of the year. The average fund rose by 0.9% in the first quarter. Figures for segregated funds in the first quarter are still only estimates.

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