Following the substantial growth of its asset base, in 2002 WPV hired an independent consultant to conduct an asset/liability study for the first time. As a result of this study, WPV set up a master fund with Deutsche Asset Management (DeAM) comprising one passive and two active mandates. The scheme awarded a passive mandate to State Street Global Advisors, a stock-picking mandate to Gartmore and a quantitative mandate to Union Panagora and hired a global custodian (BNP Paribas) to optimise the externally managed securities investments.
A continuous portfolio protection insurance (CPPI) overlay-hedging segment, managed by DeAM, was also set up for the stock mandates to manage the equity weight of the overall fund without interfering with the investment activities of the managers. The scheme also awarded a mandate for global corporate bonds to Capital International. So as to make the most of the real estate investments that were traditionally managed by external managers, investments were made in segregated real estate funds.
From 1 January 2004 to 30 June 2005, the structure of WPV’s assets was significantly optimised. Given the growth of hidden reserves (resulting from the reinvestment of capital gains and the ensuing increase in risk-bearing capacity), it was possible to allocate additional funds to the existing stock mandates. Further sub-segments were set up in the master fund with the aim of improving diversification. Since 30 June 2005, WPV’s asset allocation has been characterised by a high proportion into stocks of 18% (in terms of market value) and a high real estate quota of 14% (for investment funds only).

In the course of expanding the sub-segments of the master fund, WPV established a convertible bond mandate, which was mandated to Fisch Asset Management in Zurich . WPV also introduced a new sub-segment to further diversify the equity investments, particularly in regional terms, by the purchase mutual funds at institutional terms and as a basis for incorporating alternative investments (private equity and hedge funds). This sub-segment, which WPV manages itself, includes various asset classes that for size-related reasons do not have their own sub-segment. In view of the fact that segregated and mutual funds are increasingly being managed by the same units, WPV believes that this procedure makes it possible to gain valuable insights for selecting special fund managers.
The CPPI overlay segment for equity investments is sustained “in the background” although actual hedging is not currently required, given the amount of accumulated reserves. Real estate investments have been diversified through further investments in segregated real estate funds, mutual real estate funds and a closed-end real estate fund investing in central Europe.

Highlights and achievements
Versorgungswerk der Wirtschaftsprufer und der vereidigten Buchprufer (WPV) guarantees invalidity and pension benefits (as well as benefits for surviving dependents) on a statutory basis for virtually all auditors and certified accountants in Germany. In 1993, WPV was established as a professional pension scheme, the result of a law passed by the federal state of North Rhine Westphalia. Initially, the scheme was only intended for this state. But given the nationwide structure and mobility of the auditing profession, as well as the need to achieve an efficient organisational size, the other federal states (with the exception of Saarland) instead of establishing their own pension schemes, decided to affiliate themselves to the WPV by means of federal state agreements with the state of North Rhine Westphalia.
WPV has an active membership of around 9,000, which is expected to increase to about 16,000 in the coming years. The assets on a book value basis have increased from approximately €200m at the end of 2000 to about €600m at the end of June 2005 and are set to exceed the €2bn mark in less than eight years.

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