Mn Services executives are hoping some of the luster from their Dutch fiduciary management expertise will spread to the U.K. Europes largest pension market.
The firm is the latest on a growing list of managers and consultants trying to make a push into fiduciary management in the U.K., including Goldman Sachs Asset Management, BlackRock Inc., and Mercer LLC, all based in New York. Cardano Group, Rotterdam, Netherlands, is also making similar offerings to British pension funds.
Such strategic partnerships provide one-stop shopping for pension executives seeking to outsource the management of either the total pension fund or a portion, such as alternative investments. These arrangements have been picking up steam in the U.S. as well (Pensions & Investments, May 12).
Officials at Rijswijk, Netherlands-based Mn are searching for a merger or partnership in Britain and are planning to open a London office by the end of the year. The firm has about €65 billion ($102 billion) in mostly Dutch assets under management, and officials there are looking overseas for growth.
The United Kingdom had about 7,800 corporate defined benefit plans with aggregate assets valued at £821 billion ($1.6 trillion) at the end of April, according to estimates by the London-based Pension Protection Fund, Britains equivalent of the Pension Benefit Guaranty Corp. As additional regulatory requirements and increased complexity in investment portfolios make investment decisions more complex and costly, more fund executives are likely to outsource these duties, fiduciary management providers said.
Our strong point is the construction of the right portfolio and reducing risk while generating higher performance, Rudolf Hagendijk, chief executive officer of Mn Services, said in an interview. This is a proposition we believe could be attractive in the U.K.
Mr. Hagendijk said hes confident the firm will win its first U.K. fiduciary management mandate next year. We have to make sure that were not simply copying the Dutch model for the U.K. market, he said, but theres certainly expertise that is transferable.
Mn officials are hoping competitive pricing, investment expertise thats specifically tailored to pension funds and access to more innovative strategies such as life settlements will attract U.K. clients. Mn was among the first in the Netherlands to allocate to innovative strategies such as hedge funds, commodities and timber. We are now taking small steps to win the trust of (U.K.) pension funds, Mr. Hagendijk said, adding that closed defined benefit funds are among those targeted.