LONDON — Unilever PLC launched a multicountry asset pooling strategy this month. The much-anticipated move is an effort to better manage the company's €16 billion ($19.22 billion) in assets from 98 pension plans in 42 countries worldwide, while allowing each plan to retain its autonomy.
The first two pension funds to put assets into the new pool, known as Univest, are the €6 billion U.K. pension fund and the €3.5 billion Dutch pension fund, which will contribute a total of €2.3 billion, said spokesman Trevor Gorin in a telephone interview. By the end of 2006, the Luxembourg-domiciled pool is expected to swell to €3.5 billion and to about €5 billion in two or three years, he said.
"It's really just about improving efficiency, risk management and enhancing returns and the quality of the overall management (of the pension plans)," Mr. Gorin said. "Although we do expect some modest savings overall, cost savings are not a prime driver of this initiative."
"Local Unilever pension funds will retain full legal ownership of their own assets," Mr. Gorin said. "They could withdraw if they are not happy with performance."
Univest hired 14 managers to run 22 mandates comprising six active equity strategies: U.K., Europe ex-U.K., U.S., Japan, Pacific Rim ex-Japan and emerging markets. Mr. Gorin declined to name the managers. About 62% of Unilever's current pension assets are invested in equity strategies.
Nine plans account for about 90% of the €16 billion in overall Unilever pension assets, he said.
Chicago-based Northern Trust Corp. will provide custody, fund-of-funds management capability and fund administration. The tax-transparent pooling vehicle has been developed to apply to other multinational corporations, said Ian Baillie, managing director for Northern Trust in Luxembourg.
Mercer Investment Consulting also advised.