The €13 billion ($16 billion) Pensioenfonds Vervoer, Groningen, Netherlands, is seeking €250 million from former fiduciary manager Goldman Sachs Asset Management in what sources said is one of the first lawsuits of its kind relating to plan investment outsourcing in Europe.
In legal proceedings filed at the U.K. High Court in London on Monday, Vervoer claims GSAM was negligent in its role as fiduciary manager on two occasions, according to sources familiar with the case.
GSAM, in an e-mailed statement, said: “We acted prudently and complied with our mandate, fulfilling our obligations to our client. We believe the claim is without merit based on the facts of the situation, and we will certainly contest it.”
Filed on behalf of Vervoer by the law firm of Brown Rudnick, the first claim relates to a €350 million portable alpha portfolio that had included AAA-rated derivatives linked to subprime mortgage assets. That strategy, which was managed in what Vervoer claims it had initially understood to be part of a cash-like fund managed by GMO, was implemented in July 2007 just before the start of the U.S. subprime mortgage crisis. Furthermore, the exit strategy for the subprime investments was not completed until January 2009, following large losses to the fund, the sources said. Vervoer is claiming €81 million in losses relating to the portable alpha portfolio.
The second claim involves a global high-yield strategy that the fund argues should have been implemented in early 2009 but wasn't implemented until September of that year, resulting in a lost opportunity of €169 million, the sources said.
GSAM was Vervoer's fiduciary manager between 2006 and 2010, when GSAM was terminated for underperformance, according to an interview at the time with Vervoer CIO Patrick Groenendijk. Robeco replaced GSAM in 2011.