RIJSWIJK, The Netherlands — Royal Dutch/Shell Group of Cos. took a giant step toward centralizing its internal money management operations this month when assets totaling $17.1 billion were transferred from its U.K. pension plan to the newly formed Shell Asset Management Co.
The fledgling Rijswijk-based in-house money manager also runs the $18.7 billion Shell Pensioenfonds Nederland. Assets transferred from other of the Anglo-Dutch oil company's pension plans throughout various countries should bring assets under management to about $40 billion by the end of the year. Overall, about 200 Shell pension plans in 65 countries have about $58 billion in assets. The $7 billion U.S. defined benefit plan and $8 billion U.S. defined contribution assets will not be transferred to SAMCO.
The company decided earlier this year that it would overhaul "a really fragmented setup," said Peter Bronkhorst, SAMCO's managing director, who led the 2004 review that culminated in the creation of the asset management unit.
Shell is consolidating its assets in part to gain more clout in different investment strategies. But for other multinationals, the quest for more efficient ways to manage cross-border pension assets is also being driven by the move toward mark-to-market accounting standards, the drop in equity returns and regulatory changes.
"We were doing OK, but looking down the road, it's not robust enough for the future," Mr. Bronkhorst said. "By pulling (the assets) together, it will be ... more sustainable."
SAMCO's chief investment officer is Sijb Bartlema, who formerly headed investments for Shell Pensioenfonds Beheer BV, which managed the Dutch pension fund.