Aon wins cross-border fiduciary mandate for Swiss company
Aon has been appointed by Geneva-headquartered fragrance company Givaudan as the firm’s global fiduciary manager.
The consultancy will provide delegated investment management services to the company’s three largest pension plans in three jurisdictions – the UK, US and Switzerland.
Givaudan’s pension funds total $1.5bn (€1.3bn) and the company has offices in 95 places.
Jos Umans, head of global benefits at Givaudan, said: “Using Aon’s approach to managing pensions globally, we are able to systematically reduce risks and allocate capital to fund pension obligations more effectively.”
Sion Cole, senior partner and leader of Aon’s delegated investment solutions across Europe, said: “We are working closely with [Givaudan’s] corporate team and local trustees under a consistent global framework to manage information flow for informed decision-making, and to execute their strategy on the ground.”
Givaudan would be able to take full advantage of the increased flexibility and investment opportunities that a delegated approach offered, Cole added.
The consultancy said it had worked with Givaudan to set up an internal governing body to make strategic risk management decisions and to give the company oversight of its global pensions, while delegating the execution of the risk management strategy to local trustees supported by Aon fiduciary teams in local markets.
Andy Cox, chief executive for Europe, the Middle East, and Africa at Aon Hewitt, predicted more organisations would soon see the advantages of global fiduciary mandates.
“Global delegated investment management mandates are still not very common – but we are certainly seeing a trend among multinationals to manage pensions more centrally,” he said.
While fiduciary services have become more common in recent years, in some jurisdictions providers have come under pressure from clients and regulators over transparency. Most notably, in the UK the financial regulator has announced plans to refer investment consultants to the country’s competition watchdog, with one of the chief concerns being a percieved conflict of interest when firms provide investment advice and execution. Aon Hewitt is one of the firms affected by this change.
In the Netherlands, a number of pension schemes this year have split their fiduciary and asset management provision between providers, rather than have one firm provide both services.