Pensions market pushes for private equity self-regs
NETHERLANDS - Mn Services, the €65m service provider for the large metal pension schemes PME and PMT, has initiated a drive for increased self-regulation by private equity firms and hedge funds and delivered key recommendations through a consultation with the industry.
Mn brought together representatives of pension funds, employers, employees as well as the private equity and hedge funds industry at a roundtable forum and thrashed proposals on three key issues.
Participants recommended private equity firms and hedge funds should evaluate their own salary and remuneration structures and business models, and ‘fine-tune' them with the long-term goals of the companies they are investing in.
The industry should also explicitly acknowledge workers' rights to be members of unions, as well as their right to collective negotiations, the round table parties agreed.
They argued guidelines must be developed so relevant stakeholders can be involved in individual transactions, in order to improve the balance between the interests of all stakeholders.
The participants also recommended hedge funds and private equity providers should deliver a mission statements on communication, disclosure and transparency.
The statement - to be published at every investment - must provide clarity on the financial methodology, the degree of leverage, the aim and horizon of the investment as well as the management incentives, the collective agreed.
Mn Services said participants consider the recommendations to be the starting point to more stringent self-regulation.
"They have promised to further develop the recommendations and will encourage other players to join the initiative," said Mn officials in a statement.
The round table discussions followed an appeal by Ruud Hagendijk, chief executive of Mn Services in September, for a more rigorous self-regulation of private equity houses and hedge funds, so pension funds can work with them "with a clear conscience".
"We see it as our responsibility to get investors and key players from the global private equity and hedge fund industry involved in developing this necessary code of conduct. The results of this round table are a valuable input for further discussions on this code," Hagendijk commented on the recent developments.
Among the participants in the discussions were the private equity firms and hedge funds Och-Ziff Capital Management, the Blackstone Group, and Clayton, Dubilier & Rice as well as both large metal pension funds and the Association of Industry-wide Pension Funds (VB).
Employers were represented by MKB Nederland, the lobbying organisation for small and medium-sized businesses, while FNV and CNV took part in the discussions as workers' representatives.
Mn Services conducts pension administration of over 1.1m workers and 35,000 companies in the Netherlands, making it one of the country's largest asset managers and pension administrators.
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