Dutch pension funds slash in-house asset management, says DNB
NETHERLANDS - Dutch pension funds have cut in-house asset management from 40% in 2002 to just 10% in 2009, according to pensions regulator De Nederlandsche Bank (DNB).
The DNB said most of the assets had been shifted to funds for joint accounts (FJAs) - in which pension funds and other institutional investors pool their assets - because of benefits of scale and more efficient use of expertise.
FJAs now account for €330bn of pension assets, equating to 70% of pension funds' direct investments in equity, fixed income and long-term loans, the DNB added.
It also said 11 pension funds had invested more than 90% of their assets in FJAs.
Local and foreign external players managed approximately €580bn of a total of €675bn of Dutch pension assets at the end of March 2009, DNB statistics revealed.
Until recently, mainly UK and US asset managers were active in the Dutch pension market.
But this changed after a number of large Dutch schemes - such as the €210bn civil service pension fund ABP and the €91bn healthcare scheme PFZW - placed their assets with their own newly established and independent providers.
According to DNB, Dutch schemes have contracted out approximately 80% of their administration.
A large part of investments are carried on balance sheets for pension funds' own risk, whereas merely 2% has been fully re-insured.
Schemes' investments for the risk of their participants come to no more than 0.7%, the DNB said.