Dutch asset manager PGGM reported an €11m operational loss for 2018, citing complications in the modernisation of its administration arm and the divestiture of Volo, its consolidation vehicle.

In its annual report for 2018, the €211bn asset manager said that the modernisation of its administration had taken longer as replacing IT systems had proved more complicated than expected.

It explained that it had to hire temporary IT staff and carry out additional testing.

PGGM – the pensions provider for the Dutch healthcare scheme PFZW – said its new systems for financial administration, contract management and project management had become operational early in 2019.

Last year, PFZW director Peter Borgdorff said PGGM’s required upgrades were likely to incur “substantial” costs.

PGGM posted a turnover of €297m for 2018.

Investment outperformance

The asset manager said its investments had outperformed for its 11 pension fund clients.

It cited private markets in particular, where strategies focused on “credit risk sharing transactions”, infrastructure and private real estate all beat their respective benchmarks.

However, equity solutions and emerging markets credit fell short of their benchmarks.

PGGM said it had now integrated environmental, social and governance aspects across its entire investment process.

At 2018-end, it had invested €14.5bn in strategies related to climate, environment, water, food and health. PGGM added that it had reduced carbon emissions per million euros corporate turnover from 339 tonnes in 2014 to 239 tonnes in 2018.

Last year, the asset manager started seven legal prodecures on behalf of its clients, including a case against mining firm BHP Billiton for not disclosing risks leading to the catastrophic collapse of a dam in Brazil. UK and Swedish investors have since lobbied for improved standards regarding so-called “tailings dams”. 

Separately, PGGM said it had developed an app enabling pension fund participants to find out the financial implications of early retirement and reducing working hours.