Managers such as Numeric, Acadian, and Robeco are profitably associated with PGGM's investment revamp initiative.
PGGM, an investment manager for the Dutch care sector's pension fund PFZW, has announced a significant overhaul of its equities strategy. As part of this change, the organisation is reallocating nearly €30bn from existing managers to a more concentrated portfolio managed by systematic firms.
One of the key changes is the introduction of innovative mandates for actively managing the equity portfolios of PGGM. Schroders, M&G Investments, and Robeco have been awarded mandates worth €3.9 billion, £2.2 billion (€2.6 billion), and over €15 billion respectively. These mandates are based on the firms' expertise in sustainable and impact investing.
Schroders' mandate is focused on stronger alignment with the Paris climate goals, while M&G's is based on its Positive Impact fund, which invests in companies such as Schneider Electric, India's HDFC Bank, and Ireland's Johnson Controls. Robeco, a Rotterdam-based asset manager, has been awarded an €11.68bn mandate, also built on systematic, bottom-up stock selection.
In addition, Numeric, a Boston-based quantitative stock selection specialist owned by Man Group, has been appointed to run €11.59bn through a bottom-up stock-picking process. Acadian Asset Management, a global specialist in systematic equity strategies, has secured an €11.5bn mandate. Lazard has been appointed to manage a €2.5bn bottom-up fundamental equity mandate, and T. Rowe Price, Abrdn, PGIM, and UBS have also been awarded credit portfolio mandates.
The shift in strategy has also led to a reduction in the number of holdings from around 3,500 to approximately 800 companies. This move towards a more concentrated portfolio is designed to increase the portfolio's tracking error from 1% to 1.25%. The new portfolio will give equal weight to return, risk, and sustainability, aligning with PGGM's "3D" investment beliefs.
This overhaul is part of the ongoing changes in the Dutch pensions landscape. The Dutch pensions industry is undergoing a sweeping reform, with Defined Benefit schemes transitioning to Collective Defined Contribution arrangements by January 2028. The shift towards sustainability and systematic management reflects PGGM's commitment to responsible investing and its aim to deliver long-term value to its clients.
In contrast to PGGM's active management commitment, ABP, the Netherlands' largest public sector pension fund, announced a shift towards passive investing across its listed assets two years ago. This decision, however, does not seem to have deterred PGGM from pursuing its active, sustainable, and systematic approach to equity investing.
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