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Compendeon launches fiduciary service

NETHERLANDS - Dutch pension schemes can now join the cooperative "Pension Cooperation" launched by investment manager Compendeon to ease the individual scheme's administrative and management burden.

The concept involves both "economies of skill" and economies of scale, the company says.

At first the cooperative will be only available on the Dutch market, although international versions are a possibility "at a later stage".

"Basically, the idea involves a broader fiduciary concept," chief investment officer Erik van Dijk explained to IPE. The board of the cooperative and its staff will use their expertise to select 'best-of-breed' providers in areas such as management, administration or education.

It will then create packages for members at a better price-quality ratio than the members could have received on an individual basis.

"Furthermore, the cooperative will provide members with an institutionalised forum through which they can optimally achieve 'economies of skill': one pension plan is better in solving the problems in a specific area than another is. The other might then have higher levels of expertise in other areas," van Dijk added.

ABP commented on the launch that their director Jaap Maassen, who is also chairman of the European Federation for Retirement Provision had "already emphasized in recent interviews that he foresees more and more national and pan-European pension clusters in various forms. Developments are already going ahead at high speed.
 
"Compendeon's initiative is just another example of how things can be done.

"It is too early to say whether ABP is interested in joining 'The Pensions Cooperation', though we will study their plans thoroughly as we do with all new developments in the world of modern pensions."

The main areas the cooperative will be focusing on are:
- Pension Management Monitoring, (e.g. Pension Fund Governance-related services; Board Room Consultancy)
- Asset Management Monitoring (e.g. Manager Selection advice; Asset Allocation advice (both strategic and tactical)
- Interim Management
- Administration
- Other services (e.g. IT; education and seminars)

Van Dijk stressed that member schemes will "not be obliged to follow the cooperative's advice in all areas".

"However, since member plans appoint the board of the cooperative and have the power to change the board, it is unlikely that they will go other ways in a majority of cases. This ensures that 'economies of scale' will be an important value-added element for members of the cooperation."

The initial annual charge for membership in the cooperative will be €5,000 with services acquired through the cooperative being charged separately. "We do believe that the relative price-quality ratio will be better than what individual members would have achieved on a stand-alone basis," van Dijk explains.

He said that the product was launched following some requests by pension schemes and Compendeon research.

"The majority of smaller and mid-sized pension plans is looking for ways to maintain their independence. However, they know that concentration tendencies within the industry are inevitable considering operational challenges on both the pension and asset management side of their business.

The cooperative is open to all pension funds regardless of size and van Dijk thinks that also larger Pension schemes will be able to profit.


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  • QN-2546

    Asset class: Real Estate Equity Fund (non listed).
    Asset region: Europe.
    Size: Total CHF 600m, approx. CHF 100-300m per fund investment.
    Closing date: 2019-06-28.

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