NLG25bn Dutch PMI fund in huge asset transfer
NETHERLANDS – The NLG25bn (e11.3bn) Dutch metal and engineering workers’ pension fund, Bedrijfspensioenfonds voor de Metaalindustrie (PMI), has transferred around NLG17.5bn in assets to Eureko-owned fund manager F&C in London and is seeking two new US index managers to manage approximately NLG4bn in assets.
The decision follows a review by PMI of its investment arrangements with Dutch provider PVF Achmea, also part of the Eureko group.
Roland van den Brink, managing director at the fund, says the 70% shift in assets to F&C will be managed through ten different mandates, with a review of the arrangement posited for next year.
Real estate and mortgage investment will remain with Achmea and the fund will also keep an external reinsurance portfolio.
“That is not a game that F&C knows anything about,” says Van den Brink.
While the shift in assets does not mean a particularly large loss for the Eureko group, Van den Brink adds: “That was politics. The history was with them. We now have the ten mandates with F&C in London and we can judge them and see whether we need to replace them.
He notes that this is the “first move” for the fund in a larger strategy shift.
“We came from the situation of a full balanced mandate and this is at least the first big step forward.”
The tender process for the two index briefs is currently taking place.
Van den Brink, comments: “Foreign & Colonial cannot offer us a good product in the US and they are very mature markets, so active mandates normally don’t give you any extras.
“We may be looking for enhanced index mandates. We also want to get the whole process to minimise risk so that we are not working 24 hours a day. Therefore we decided on the index mandates for the time being.”
The separate mandates consist of one for 14% of the portfolio in equities and another for 2% in US bonds.
“We are in the selection process at the moment and there will only be four or five of the big names that will apply.”
The fund says it expects to make a decision on the managers by mid November.