Externally managed Dutch institutional assets are still on the rise according to our latest report on the Dutch institutional investment management market-place. Total Dutch external institutional assets managed totalled E309bn at the start of this year. According to the Central Bureau of Statistics (CBS), the total amount of Dutch pension fund assets amounted to E456bn by the end of the first quarter of 2002, implying that 68% of total assets are externally managed (with E147bn in-house managed). The exact percentage of external money could be somewhat higher, allowing for a limited number of small managers who did not participate in the investigation.
The top managers manage less in relative terms, but more in absolute terms . Of the 78 investment managers surveyed, the top 10 managers manage E226.7bn (73%) of total Dutch institutional externally managed assets. A strong indication that only a small number of managers manage large sums of Dutch institutional assets.
Although the Dutch still dominate the top 15; when it comes to thelargest managers of Dutch institutional assets it is very much a foreign affair. Barclays Global Investors, F&C and State Street Global Advisors are the largest managers, dominating the top three. Foreign managers dominate the very top segment as well as the small to medium segment. Dutch managers dominate the larger segment. It is on the retail market where Dutch managers hold a much stronger position compared to the institutional marketplace.
As index managers, Barclays Global Investors and State Street Global Advisors now manage in total E66bn. Investing in index tracking and enhanced indexing is quite popular in the Netherlands, but the total amount remains stable at the moment.
Over the past few years there has been a growing number of foreign managers who have opened up their own sales offices in the Netherlands, employing Dutch staff. Similarly, there has been consolidation in the number of foreign offices.
When it comes to the management of Dutch pension money, Dutch managers may still dominate; but foreign managers are encroaching on their preserve. Of the E309bn, 45% is managed by foreign companies. It should be noted that the investigation took foreign manager to mean a manager with the majority holding of its shares outside the Netherlands. Similarly, this is the criterion for the origin of the manager.
It is foreign-owned firms such as F&C, State Street, Lombard Odier, Capital International, Robeco, Invesco, Palladyne, Morgan Stanley and Rogge who are the fastest growing investment managers. A number of large Dutch pension funds which present themselves as commercial asset managers are new on the market, such as MN Services. This trend is likely to continue given that some sponsors regard their pension fund as a profit centre.
Breaking down the foreign managers, the US comes out on top. According to origin, the divisions are as follows: Dutch managers E169.7bn (55% of total external pension money, number of managers 17); US E88.8bn (29%,20); British E36bn (11.5%,8); Swiss E10bn (3.2%,3); Germans E3.7bn (1.2%,2); Japanese E1.1bn (0.4%,1) and French E0.3bn (0.1%,2).
Frits Bosch is director of the consultancy firm Bureau Bosch in Nuenen in the Netherlands. Details of the report ‘Trends of the Dutch investment management marketplace’ are available on request from email@example.com