PGGM, the e71bn Dutch health care pension fund, has announced that it will change its investment management structure, abandoning the conventional approach based on asset classes.
The revamp will entail a change in management responsibilities, with current equities director Leo Lueb named as chief investment officer.
A new director portfolio management - current fixed income head Piet Roelandt - will be responsible for all liquid investments managed actively and passively.
The fund will explicitly separate as well as manage market risk, and active investment policy. It will make vigorous efforts to further use its “scale advantages” to select investments with a very long-term horizon. It will integrate sustainability into the investment process.
The scheme follows fellow Dutch giant ABP in radically changing its investment approach.
“Our participants in the healthcare and social work sector must be able to count on a good pension package for low, stable pension premiums,” said Else Bos, CEO Investments and executive director.
“For that, we need high, stable investment returns in the long term. We achieve high stable returns with a balanced portfolio, comprising market risk, active investment strategies and alternative investment strategies.
“As an institutional investor we seize all opportunities to continually improve the investment process on the basis of our investment beliefs and to apply innovative investment strategies. Integral management of the risk profile of the portfolio is crucial. An investment organisation consistent with this vision is an obvious next step.”
The Zeist-based fund will appoint an investment committee to manage the risk position of the overall portfolio. The members will be Bos, Lueb, Piet Roelandt, Henk Porte (acting director of structured investments) and Jaap van Dam (chief strategist).
“Over the past 10 years, PGGM has achieved impressive results by taking the lead with new investment categories,” Lueb said. “I would like to continue to build on these successes.”