NETHERLANDS - Dutch pension fund giant ABP is on the brink of a structural overhaul that could see the €209bn fund strengthen the focus on its third pillar pension offering and potentially create more new products in-house.
“If this proposal is implemented then practically all the pension funds in the Netherlands will restructure in a heartbeat,” a source said.
A spokesperson for the fund confirmed discussions on the future structure of ABP were underway, on the back of the new investment strategy announced on 18 January.
He was not in a position to say when the discussions would wrap up, however, he said it would more likely be within months than weeks.
In July 2006, Global Pen-sions exclusively revealed that the Netherlands’ other major pension fund player, PGGM, was considering a corporate identity overhaul.
Following talk of a possible re-brand as an investment manager or adviser, the €81.1bn fund announced in November the split of its asset management and administration from the pension fund itself.
Due to the vast similarities between the two funds, the ABP spokesperson did not dismiss the possibility that it would go down the same route, but suggested the approach could vary.
“We are not exactly the same pension fund as PGGM and therefore there could be some differences,” he said.
The possibility of the tax deductibility of pension contributions being capped could prompt other pension funds to market their third pillar offering since people may not have sufficient savings within the fund.
Although ABP’s spokesperson claimed the fund had no plans to expand its function into new products, an industry expert said this could prove an attractive venture.
“ABP has a very good reputation and is therefore able to attract the best talent to its teams. It is likely that they will move to doing more things themselves,” he said.
Under the fund’s new investment strategy, its allocation to non-listed asset classes will increase from 21% to 27%.
“The investment plan includes the further expansion of private illiquid investments, which are expected to produce higher and more stable returns in the long term,” the fund said.
It will increase exposure to assets like infrastructure, private equity, and in particular hedge funds.
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