NETHERLANDS - TNO, the e1.3bn Dutch pension fund, has appointed ABN AMRO to manage a e50m inflation linked bonds mandate.
In making such an allocation, the fund is seeking to remove the risk of an inflation rate hike, which would in turn increase the fund’s liabilities.
“The basic reason is that we want to have a link with the Dutch inflation,” said Henk Bogerd, investment manager at the fund.
Part of the fund’s liabilities are linked to the inflation rate, which at the moment is at an almost three year low of 2.2%, having steadily fallen from 4.2% in 2000.
ABN AMRO will manage the mandate for a period of 12 years.
Currently, the fund is invested 45% in equities, 40% in bonds, 7% in real estate, 4% in private equity and the remainder in cash.
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