NETHERLANDS- PMI, the e13bn Dutch metal workers pension fund, has dropped Deutsche Bank as manager of its e3bn passive currency mandate due to poor performance and instead appointed Goldman Sachs.
Deutsche Bank had been appointed several months ago to assist PMI in its currency hedging strategy, but, says Roland van den Brink, investment director at the Dutch fund: “Deutsche Bank just could not give us the service which was anticipated.” Deutsche was unavailable for comment.
As a replacement for Deutsche Bank, ten banks were considered. “There are only ten large currency managers that can execute this currency hedge strategy on a worldwide basis”, says van den Brink.
“There is very little separating the top four players, but in the end Goldman Sachs was chosen for its provision of real time information regarding the currency status of the portfolio.”
Other factors in Goldman Sash’s favour that were mentioned were price, research and collateral flexibility.
The currency hedging programme has formed part of PMI’s investment strategy for the past year, but has gradually become more focused. One year ago 50% of PMI’s US dollar and Japanese yen exposure was hedged, compared to 100% today.
PMI will be looking more closely at non-traditional investment areas when it merges with SVM, the metal industry’s early retirement fund in 2003.