The Dutch technology industry scheme PME has chosen Candriam as the manager of a new, concentrated equity portfolio initially worth €1.5bn. This is half of the €57bn fund’s existing allocation to European equities. The step is part of PME’s switch from index investing to a more concentrated portfolio.
Since January, Candriam has been managing a European equity portfolio of 40-60 companies, giving the asset manager total freedom to pick companies within PME’s investment universe. This universe has recently been reduced from about 1,300 to more than 1,000 companies, 320 of which are in Europe, because PME has further tightened its ESG criteria.
Candriam will manage the portfolio using what PME calls a buy-and-maintain approach, with a tracking error of around 3%.
As the controversial amendment on fund-level member ballots about the conversion of defined benefit (DB) accruals to defined contribution (DC) capitals was voted down, the last potential spanner in the works for the Dutch pension transition appears to have been removed.
Social affairs minister Eddy van Hijum, in his last official act before the Dutch government fell a few weeks ago, proposed a decree giving pension funds an additional 12 months to implement the new interest rate hedging and investment policies in their new DC arrangements.
Hitherto, pension funds were required to have their new policy in place before their planned transition date, although pension funds have in practice been allowed to make changes later.
The move gives pension funds flexibility to adjust their interest rate hedges to the new situation, which is welcome given tight liquidity in the market and the presence of hedge funds planning to front-run pension funds’ trades. Most funds will stop hedging long-duration interest rate risk in the new DC system, selling long-duration swaps, as they will only hedge the interest rate risk of older participants in the new pension system.
Items to note:
- The IPE Real Assets Infrastructure & Natural Capital Global Conference & Awards 2025 is taking place on Tuesday 16 to Wednesday 17 September at the Mainport Hotel in Rotterdam
Tjibbe Hoekstra
IPE Netherlands Correspondent
This news briefing was published earlier in the week. If you would like to receive it regularly, on your ‘IPE profile’, go to ‘My Newsletters‘ and select any from the list.
