The pension fund of the Dutch central bank and pension regulator De Nederlandsche Bank (DNB) has left BlackRock as its fiduciary manager after 17 years, replacing it with Aegon Asset Management.
The appointed manager is cheaper and has an operating model that better suits the fund, according to the pension fund’s president Roeland van Vledder.
Pension fund DNB switched to Aegon for fiduciary services on 1 April. It had been with BlackRock since 2007.
According to Van Vledder, Aegon scored better than BlackRock on a combination of factors, including price.
“This also refers to what the fund itself wants to organise at the management office and what it prefers to see at the fiduciary,’ said Van Vledder, who declined to elaborate further on this.
As a first step, Aegon will review the pension fund’s investment portfolios to see if its management “is still optimal and if the current managers are still the best match,” the fund said in its annual report.
Last year, the DNB fund made some changes to its investment policy. For instance, the portfolio of inflation-linked bonds, accounting for 10% of the fund’s assets, was swapped for credits.
Sustainable investment
The fund’s policy on sustainable investment was also made more ambitious. From now on, at least 20% of the fund’s matching portfolio must consist of green, social or otherwise sustainable bonds. In addition to this, at least a quarter of the allocation to money market funds will be invested in a ‘green’ money market fund, taking ESG integration into account.
Paris-Aligned Benchmark
A Paris-Aligned Benchmark has been introduced for the fund’s equity portfolio, which means that the CO2 emissions of the investments must be in line with the objectives of the Paris Climate Agreement. This includes the exclusion of all fossil investments.
The engagement policy is also becoming stricter. From now on, after deficiencies are identified, companies will have 12 months to make ‘verbal commitments’ for improvements. They then get another 12 months to put these commitments in writing. If a company misses either deadline, it will be sold.
The pension fund has also expanded the number of sustainable development goals (SDGs) it focuses on in its equity portfolio to include SDG 3 (good health) and SDG 8 (responsible consumption and production). The DNB fund wishes to invest only in companies that contribute positively to these SDGs (besides SDG 3 and SDG 8, it’s the SDGs 7, 12, 13, 14 and 15).
“In doing so, the pension fund aims for an overweight of at least 30% compared to the grey benchmark in the companies that score best on these SDGs,” Van Vledder said.
Because investment is not allowed in companies with a negative overall contribution to the SDGs, he said “relatively many” companies are excluded.
Finally, the fund has also set a target for impact investing for the first time. By the end of 2025, at least 5% of the portfolio must be invested in impact investments.
Closed Dow fund appoints Neuberger Berman as fiduciary
The Dutch pension fund of US chemicals company Dow has appointed Neuberger Berman as fiduciary manager.
So far the assets of the €2.3bn fund, which is closed for new accruals, had been managed internally, but “changes in the organisational structure of the company and compliance aspects” had forced the fund to find an alternative.
Part of the reason for the selection of Neuberger Berman was that it already works for the Swiss pension fund of Dow, the scheme said in its annual report.
Fekko Ebbens, head of institutional business EMEA at Neuberger Berman, noted that his firm will be more of a liability-driven investing manager rather than a fiduciary manager that also selects and monitors asset managers. The closed Dow pension fund sold its full allocation to equities prior to the switch to Neuberger Berman and only invests in bonds and pocket of alternatives, which will continue to be managed internally.
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Tjibbe is IPE's Netherlands correspondent.
He splits his time between IPE and its Dutch-language sister publication Pensioen Pro.
Before joining IPE following a move back to Amsterdam, Tjibbe worked in London for several years writing about fund selection and portfolio construction trends.View full Profile
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