F&C unveils fiduciary management solution for Dutch pension funds

F&C has announced that it is reinforcing its commitment to the Dutch pension market by offering a full fiduciary management solution for the pension fund sector.

The F&C offering will allow clients to access best-in-class asset management services and builds on F&C's unrivalled experience in advising and managing Dutch pension schemes and its local client servicing and reporting capabilities.

As a fiduciary manager F&C will offer integrated services across the key roles of pension fund management acting as a strategic adviser, portfolio creator, risk and performance guardian, operational creator and, above all, accountable orchestrator for the whole Fiduciary Management arrangement. The F&C approach will enable pension funds to access a complete asset management solution through a single service provider.

Fiduciary Management is becoming increasingly popular among Dutch pension funds which are moving away from the traditional, single manager approach to managing balanced mandates. Low funding levels and a more complex regulatory environment have put even more emphasis on pension schemes to seek appropriate hedging solutions for their liability exposure while pressure remains high in the search for higher returns at appropriate risk levels. This increasing regulatory complexity and accountability of trustees has led to a demand for a single, integrated, solution from a fiduciary manager.

"Our aim as Fiduciary Manager is to establish an active partnership between the Pension Fund Board and F&C to ensure fund liabilities and long-term objectives are met through tailored strategies with access to an array of top investment managers," said Rob Kamphuis, Director, Fiduciary Management at F&C Netherlands. "We have been working with Dutch pension funds for over 50-years, helping them to adapt to every change in the market place, from moving away from purely domestic portfolios all the way to the inclusion of liability-driven and alternative investments. This, combined with F&C's significant resource in Strategy, ALM and manager selection, means that we are well positioned to play a major role in the fiduciary management space."

For selecting external managers, F&C have established a strategic partnership with Investment Manager Selection (IMS), one of the largest institutional multi-managers in Europe, to provide research for selection decisions and undertake regular reviews of all 'candidate' managers. This relationship will ensure an independent identification and selection of appropriate managers, ultimately based on merit. F&C have also developed a proprietary portfolio construction process to create an optimal conflict free approach to blending internal and external providers. The final decision, however, regarding the inclusion of F&C's own funds as part of the fiduciary management arrangement will rest with the client.

"It is our belief that pension funds are looking for a fiduciary manager who will work with them in providing a complete solution for managing against their liabilities. We are confident that our differentiated offering fits with client objectives by targeting a highly efficient combination of independent beta and alpha drivers," said Paul Niven, Head of Asset Allocation at F&C. "We aim to be a single contact for pension funds who can package, manage and monitor their investment strategies and not just a multi-management provider. Choosing and combining alpha-generating asset managers is an important component of any fiduciary offering but having the right overall strategy to manage liabilities and generate returns and delivering this in a cost efficient manner is even more crucial."