AMSTERDAM - Achmea Group may lose up to $10 billion in business from key Dutch clients as its asset management arm, Achmea Global Investors, is merged with F&C Investment Management Ltd.
Two of the Netherlands' largest industrywide pension plans - Stichting Pensioenfonds ABP, Heerlen, and Bedrijfstakgebonden PMI-SVM, Amsterdam - are considering restructuring asset management and administration arrangements with Achmea worth more than 25.2 billion Dutch guilders ($10 billion).
Eureko NV, Amsterdam, the pan-European insurer that is partly owned by Zeist-based Achmea Group, began earlier this year to integrate Amsterdam-based Achmea Global into London-based F&C Investment, formerly Foreign & Colonial Management Ltd., making F&C the insurance group's global asset management operation. Dutch clients currently account for 49% of F&C's e111.7 billion ($95.5 billion) in assets under management, said Patrick Johns, managing director, institutional business.
As of June 30, Achmea Global managed e50 billion for Dutch clients, according to figures published by William M. Mercer. The 25 billion guilder PMI, which covers workers in the heavy-metals industry, is believed to be one of the firm's largest clients.
The PMI assets are managed entirely by Achmea Global, but Roland Van Den Brink, the plan's newly appointed managing director, is reviewing its asset allocation and might decide to appoint new money managers.
"We are just starting the process. The (pension plan) board has still to decide whether we want to work with one or more managers," he said. A decision is expected within the next few months. "In theory, one money manager cannot be good at everything. The trend is to see whether we can optimize our arrangements with money managers."
Bad job with balanced
PMI's current asset allocation is 40% equities, 22% bonds, 11% real estate and the balance held in cash, reinsurance, loans and mortgages to plan members. Mr. Van Den Brink would not be more specific about the ideal asset allocation for the plan or whether he wants to adopt a core-passive/satellite-active strategy. But he did say he believes balanced managers have on the whole done a bad job when managing pension plan assets in the Netherlands.
Mr. Van Den Brink previously was director of investments at MN Services, Rijswijk, the investment manager for the 29 billion guilder Bedrijfspensioenfonds voor de Metaal en Technische Bedrijfstakken and is known in the industry for his innovative approach to investment policy.
Meanwhile, ABP is in discussions to prematurely end a 10-year contract with Achmea Global to manage the assets of savings plan Spaarfond SCO, Heerlen, set up for a group of its members in 1994, said ABP spokesman Marcel Vleugels.
ABP is keen to extend the savings fund to all of its roughly 1 million members and wants to manage the assets in-house. Mr. Vleugels expects negotiations with Achmea to conclude by the end of the year.
Spaarfond SCO has assets of 200 million guilders and covers 40,000 members of ABP, according to Chairman Ruud Cornelisse. When the fund was established in 1994, members had wanted ABP to manage the assets, but government regulations disallowed it.
Mr. Cornelisse said it would be more cost-effective to run the plan in-house and would allow ABP to link the savings to other benefits offered by the group. ABP already manages a large portion of its assets in house. This time last year 87% of total assets were managed internally and the plan intends to further increase that proportion, according to its annual report for 2000.
"We have nothing to complain about with Achmea in terms of investment performance," he added.
Both plans maintain that Eureko's decision to transfer responsibility for Achmea Global to F&C was not a factor in the reconsideration of their management contracts with the firm.
F&C Chief Executive Officer Bob Jenkins said it has been "an open secret" that PMI is exploring the full range of options on how to manage its money.
"We are aware that PMI will naturally always review its policy and we hope that we will be one of their major money managers in the future," he added.
He could not comment on the arrangements with ABP.