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Impact Investing

IPE special report May 2018

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Laurus ousts ING and Robeco in liability move

NETHERLANDS – The €340m pension scheme of Dutch food retailer Laurus has ousted ING and Robeco from running balanced bond and equity mandates worth €170m each.

It their place it has appointed PIMCO and AllianceBernstein to take on, respectively, €240m in fixed income and €100m in global equities. The move, assisted by Watson Wyatt, aims to help the scheme match its liabilities and lessen its exposure to interest-rate risks.

A Robeco spokesman said the firm did pitch for fixed income but lost out to PIMCO. A spokesperson for ING was not immediately available for comment.

“Laurus Pension Fund has adjusted its policy in order to achieve better matching between the Fund’s investments and its pension liabilities,” a statement said. “This new policy is aimed at limiting the interest rate risks.”

“We have drawn up the investment guidelines in such a manner that it will be possible to respond effectively to future legislation,” said Laurus’ chief financial officer Kenaad Tewarie.

“Matching investments to pension liabilities, with greater stability of the solvency rate, is central to this policy. As a result of this combination of matching and reducing fluctuations of the solvency rate, no concessions need be made to the return targets.”

A fixed income benchmark has been designed to follow the fund’s pension liabilities. Increasing the solvency rate remains possible by additionally investing in shares and alternative types of investments, as well as by active investment management.

Gerard Roelofs, head of investment practice at Watson Wyatt Nederland, said: “We see the new policy as a major step forward in the area of risk control and monitoring, also through the strategy of using a liabilities benchmark.

“New legislation on pension funds is increasingly moving in this direction, and Laurus is already responding to this development.”

Last week IPE reported that the €12.5bn Dutch pension scheme of electronics giant Philips has increased its fixed income exposure in a bid to cut its sensitivity to interest rates.

The move at the Dutch scheme was so big it increased the total bond exposure at all Philips’ schemes by nine percent at the end of 2004, to 57%.

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