Nestlé shakes up global pension management operations
Nestlé has stripped its internal asset managers of a number of mandates as part of a major international overhaul of its investment operations.
BlackRock has taken over management, on an interim basis, of at least seven funds listed in Ireland, which are run for Nestlé’s pension funds around the world.
A spokesperson for Nestlé in Switzerland confirmed to IPE: “It’s a global decision which impacts our colleagues here in Switzerland and the ones based in UK.”
A source for Nestlé in Germany told IPE one of its Spezialfonds has had to source a new manager. However, most of Nestlé’s German pension assets were already managed externally, the source added.
Nestlé Capital Management (NCM), based in York, UK, was founded in 2006. NCM and Nestlé Capital Advisers (NCA), based in Vevey, Switzerland, employ a number of internal investment experts.
In a statement issued to the media, the Nestlé spokesperson said: “I can confirm that we are continuously exploring ways in which our company can operate sustainably in a highly competitive business environment.
“Nestlé is thus strengthening its pension management strategy by changing its central pension organisation. The aim is to manage risk more effectively, strengthen governance, continue to align with industry best practices, and reduce operational costs.
“This change in Nestlé’s pension organisation will also promote a more collaborative working relationship between our company and local market pension funds. We can confirm that Blackrock Advisors (UK) Limited will be acting as interim investment manager.”
Nestlé has CHF23bn (€21bn) in pension assets across the countries in which it operates. Many of its branches have separate pension entities.
According to the company’s 2016 full-year report, NCM was managing CHF10.4bn at year-end, almost unchanged compared to 2015 (CHF10.8bn). External managers ran most of the remaining assets, including the majority of investments for the Pensionsfonds and Pensionskasse in Germany.
The spokesperson said the company would not disclose the amount Blackrock has taken under management.
Nestlé’s Irish funds are branded as Robusta Asset Management. Effective 3 May, BlackRock took over funds covering active and passive European equities, and active North American equities, according to notices posted on the Irish stock exchange.
BlackRock also took responsibility for Robusta’s Global Bond, Asia Pacific Equity, Global Inflation-Linked Bond, and Emerging Market Debt funds on the same date.
In addition, US-based Grosvenor Capital Management has taken over from NCM and NCA as manager of Robusta’s Multistrategy Fund of Hedge Funds, according to a statement to the stock exchange on 4 January 2017.
Duncan Sanford, who led the UK operations as CEO and CIO, is understood to have left NCM effective 3 May 2017, the same day BlackRock officially took over from NCM and NCA as manager of the Robusta funds.
Sanford became inactive on the UK regulator’s register of authorised financial professionals on 3 May.
Jayne Atkinson, previously investment manager for Nestlé’s UK pension fund, left the company earlier this year. She is now CIO for Unilever’s UK pension fund.
In 2015, Nestlé created a cross-border pension solution by integrating its Austrian pension plan into the German Pensionsfonds.
However, in the same year, authorities rejected a similar solution for Nestlé’s Belgian and Dutch pension plans.