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Denmark’s PBU to refuse all asset manager freebies, says new CEO

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Pædagogernes Pension (PBU), the Danish pension fund for education practitioners, has brought in a “zero-tolerance” policy on its staff accepting any kind of gift from current or potential external capital interests – i.e. banks or asset managers – and said it was the first pension fund in the country to do so.

PBU, which manages DKK60bn (€8bn) of pension assets, sharpened up its ethical business code from October and included in it a complete ban on free lunches from parties such as banks or asset managers that are investing on behalf of PBU via a contract.

Sune Schackenfeldt, chief executive at PBU, said: “Our education practitioners are to have confidence their pension fund unambiguously represents them and acts as their trusted adviser, when it comes to – or could come to – capital interests between us and third parties.” 

Schackenfeldt is relatively new to the pension fund, having taken over the top role on 1 August from Leif Brask-Rasmussen, who was retiring.

He came to PBU from PFA Pension, where he was director.

PBU said its zero-tolerance policy meant it would, in future, say a clear no to gifts or external payment for travel, accommodation, lunches or entertainment.

It said gifts were extended by these external capital interests – which PBU said were typically banks or other asset managers – when they wanted to be hired to invest on the pension fund’s behalf.

With its new ethical code regarding external interests, PBU said it was the first in the pensions sector to tackle a widespread problem in the industry.

“The level of presents and invitations from external capital interests – particularly directed at management and investment staff – is a challenge for the whole pensions sector,” Schackenfeldt said.

“It is important for our education practitioners to know their interests are the only thing we think about – from the time we get up to the time we go to bed.”

When supplier and cooperation agreements are entered into, as well as investment contracts, PBU said it would  ensure, as a natural part of risk management, that there had been a compliance check to make sure the zero-tolerance policy had been adhered to.

In the UK, the Financial Conduct Authority (FCA) criticised the practice of consultants accepting gifts and hospitality from asset managers in its interim asset-management market study released earlier this month.

It said this behaviour was still happening despite previous warnings from the FCA.

The supervisor has said it will look further into the matter between now and its final asset-management report.

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