Major Dutch insurance group AEGON has awarded two securities mandates to Panagora Asset Management.
One is for a portfolio invested in global fixed in-come markets and the other a global emerging markets equity portfolio. The award size has not been made public.
The deal was negotiated through the London office of Panagora directly with AEGON's investment team based in The Hague, where the group, the Netherlands' second largest insurer, has its headquarters. Panagora in London will manage the fixed income portfolio and its office in Boston, the emerging market.
Anthony Simpson, Pana-gora's director of marketing and client service in London, says that the contact was first made with AEGON in No-vember 1995 at a senior level. But we did not start serious conversations there until a year ago," he says. "We found that they were very interested in our style of structured investing."
AEGON already invests in the global bond markets and emerging market equities, he points out. "So it is our approach to these markets that they find attractive." While no details are being given as to the nature of these mandates, nor the fee structure, the mandates are thought to be in line with the asset manager's quantitative methods aimed at producing superior returns,but with control of risk. "The actual benchmarks and investment objectives reflect those you would expect from a big Dutch institutional invest-or," says Simpson. "We be-lieve we can give them exactly the level of technology transfer that they want," he adds.
Panagora expects that there will be close contact on an on-going basis between the cli-ents' teams and theirs. "They intend to learn from and de-rive some added value from this, as they do not do it the way we do it." Ultimately the structured investment ap-proach Panagora uses could become one of the asset management capabilities of the insurer's investment operations. Simpson says the winning of these mandates is of "great strategic significance" for Panagora.
"Our sub-advisory business is our fastest growing part and now accounts for 10 to 15% of our assets under management. This is the first relationship of this type we have successfully initiated out of the London office." He be-lieves that insurance companies in Europe will be an in-creasing source of sub-advis-ory mandates.