NETHERLANDS - PGGM, the Dutch pension fund giant for health and social workers, is investigating its US asset managers in the shadow of the market-timing scandal to have hit the US fund industry.
The Zeist-based scheme said it would be reviewing all of its US-headquartered managers, particularly its 10 undisclosed US equities managers, who manage approximately e25bn in north American securities. PGGM also holds assets in US real estate and fixed-income.
A spokeswoman for PGGM said: We are investigating if there is something peculiar going on. We are looking at our own administration first and then we will check with our asset managers in the US. We haven't found anything so far but we are working on it.
She added that any action would, typically, depend on the seriousness of the matter.
ING and ABN Amro, the two biggest Dutch banks, have become the latest firms to fall under the scrutiny of the US regulator, the SEC (Securities and Exchange Commission).
In recent weeks, numerous worldwide consultants have been attempting to reassure investors about the potential impact of the scandal.
Market-timing, or timezone arbitrage, is not illegal but is frowned upon because it dilutes the value of assets for long-term investors including pension funds. The practice involves speculators who trade outdated prices - in other words they exploit time lags between official fund NAVs (net asset value) and their true value over a timezone.
Last week, Ireland’s e8bn National Pensions Reserve Fund (NPRF) confirmed that it too would be reviewing its US investment managers, starting with Putnam Investments. Putnam was charged with fraud and has since seen significant outflows from its mutual funds arm since the news broke. Some estimates put that figure at around $8bn. Since then it has reached a controversial agreement with the SEC which will see the restitution of losses incurred by shorting as well as more limited trading restrictions.
Managers are eager to stem potentially destabilising outflows which could also reach several billion dollars from pension funds across Europe.
The British Medical Association (BMA) has warned chancellor Philip Hammond to reform the NHS pension scheme rules or doctors will reduce their working hours.
The lifetime allowance should be scrapped and replaced with a lower annual allowance, last week's Pensions Buzz respondents said.
Action for Children Pension Fund has outsourced its pensions administration to Trafalgar House.