NETHERLANDS - Mn Services, the €56bn fiduciary manager owned by the PME and PMT pension funds in the Netherlands, is finalising a strategy to improve its overall service to clients and will introduce a dynamic asset allocation model.

In an interview published in the March edition of IPE, Mn Services' CIO and head of investment management, Wouter Pelser, said the new client strategy involves an overhaul of risk management, internal client service and an improvement of governance.

Pelser emphasised that the process to overhaul fiduciary management started in 2008 and is not a result of the recent problems at PME pension fund. The board of PME stepped down in January but denied reports that this was at the direct instruction of the supervisor, the DNB.

PME said at the time it intended to strengthen the board's control over investment and risk management, and increase independent expertise in investment management.

Pelser told IPE that improving governance involved overhauling client focus within the organsiation: "How can you lengthen the client focus to the client himself? Governance is about how you co-operate. It's about culture but also about the structure, eg the service level agreements - how an investment plan is working and can we make longer term agreements, which we like to do."

The CIO hinted internal changes could alter the balance of internal management versus external.

"Our fiduciary management department will be strengthened so we have an even more clear separation between fiduciary management and asset management, and that fiduciary management is mandating the asset management," Pelser said.

He also said dynamic asset allocation would not involve a trading portfolio; rather the more frequent implementation of fundamental views with a longer-term horizon, taking into account whether the financial situation of a pension fund client has changed, and that risk factors and co-variances are constantly changing.

"I expect a number of switches during the year but I don't expect that dynamic asset allocation will lead to reallocations with a higher frequency," Pelser said. "I believe that the market gives some opportunities over the year and I understand that on behalf of technical analysis you can see opportunities every day but the market gives you only a small number of real opportunities over the year - perhaps below ten."

Pelser added Mn Service would continue to grow with focus: "There is an important and high emphasis on current clients and client satisfaction is the most important criteria of our success. I think our current clients earn our attention and of course this company likes to grow credibly over the years as well."

More information is available in Pensions In The Netherlands, in the March issue of IPE.