The Utrecht-based e400m pension fund of Dutch communications group Origin – the former IT subsidiary of electronics group Philips – has undergone a mammoth investment restructuring, almost halving its exposure to Philips-owned asset manager Schootse Poort in favour of a range of specialist mandates.
Rene Upperman, managing director of the Origin fund, comments: “What we have done is an ALM study and some reallocation of regions and looked at emerging markets and some alternative investments. We were also looking for more diversification, especially in management styles.”
Schootse Poort, which managed 80% of the assets of Origin’s defined benefit plan, will retain around half of the plan, losing assets to new appointments Lombard Odier, State Street, Capital International and Frank Russell.
Concerning the switch from Schootse Poort, Upperman comments: “There are historic reasons why the majority of our assets are managed by them and it was not typically something that was objectively determined.
“We never did any ALM studies because we had a continuous change of population due to mergers. But now we are relatively stable. We believe in diversification and in some areas there are better managers. We also believe in moving from domestic to EMU assets and in more specialisation.”
Lombard Odier picks up an e50m fixed-income EMU brief, which will include some emerging markets exposure. State Street receives e10m to invest in a long/short hedge fund programme, while Capital International gets e50m in European equities. In an interesting addition, Frank Russell will be handed e30m to invest in its multi-manager programme, in what Upperman terms a “live index” copy of the fund’s overall allocation.
“This will be invested as a copy of our original allocation in equities. We are testing whether in a multi-manager style they can outperform our overall benchmark.”
Existing manager Amsterdam-based Kempen Capital Management loses e10m and changes brief from e60m in large cap domestic equities to e50m in European small caps. Aegon Asset Management in The Hague, which already managed e36m for Origin, has its allocation upped to e50m, to be invested mainly in domestic fixed-income.
The fund also transferred custody to a global provider, Kas Associatie, having previously run individual custody contracts with its managers.
Origin used Rotterdam-based consultant Ortec for its asset liability study and the fund’s investment consultant is Amsterdam-based specialist Lou Ten Cate.
The fund will also change its name in the coming months to Atos Origin pension fund following the merger of the two groups.