Dutch pension fund Recreatie has replaced BlackRock as the manager of its now €450m equity portfolio with Cardano, partly because of the ESG controversies surrounding BlackRock, which centre around the US investment giant’s decision to withdraw from various climate-related partnerships.
The move echoes decisions by other Dutch pension funds to reject cooperation with BlackRock, such as PFZW, and PME.
Citing information in the recently published annual report of Pensioenfonds Recreatie, the €1.1bn mandatory pension fund for the recreation sector, IPE’s sister publication Pensioen Pro reported on Friday that following a routine evaluation by AF Advisors of its equities management, Cardano was appointed to manage the fund’s listed equity portfolio.
Xander den Uyl, a board member at the pension fund, told Pensioen Pro: “They assessed a long list of asset managers – including BlackRock – based on a dozen criteria, such as costs and ESG policy,” adding that Cardano had achieved the best scores in both areas.
Last year, the €55bn Dutch pension fund PME terminated its relationship with BlackRock, saying that though it was satisfied with the US manager’s services, the pension fund’s board had also been considering “whether the manager aligns with our values and beliefs regarding investing for the future”.
BlackRock also lost business from the Netherlands’ second-biggest pension fund PFZW a year ago, as part of its shift to an active equity strategy.
Den Uyl told Pensioen Pro the ESG controversies surrounding BlackRock had not worked in the asset manager’s favour, but “were not decisive,” describing the change of managers as “a business decision” in which cost considerations had played a major role.
Asked for comment, a spokeswoman for BlackRock told IPE: “We respect the fund’s decision. We remain proud to manage more than €350bn on behalf of Dutch clients.”
Commenting further on the decision, Den Uyl also said that with an equity portfolio of around €450m, from the outset Pensioenfonds Recreatie was becoming a significant client for Cardano — which already serves as the pension fund’s strategic investment adviser and manages its matching portfolio and currency hedging.
“At BlackRock, we were just a small client,” he told Pensioen Pro.
While originally primarily an LDI manager, since acquiring Actiam in 2022, Cardano – acquired two years ago by US consultancy Mercer – has also positioned itself as an ESG adviser and equity manager.
Den Uyl also cited the simplification of equity portfolio management as an additional benefit of the management change, with the number of equity funds being reduced from four to two.
“We now only have one index fund for developed market equities and one for emerging market equities,” he told Pensioen Pro, adding that with BlackRock, the pension fund had also held investments in two small-cap equity funds.
This article has been amended to include a comment from BlackRock.
