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Fiduciary Management Brings Tangible Benefits to European Pension Fund

In mid-2007, the investment committee of a sizable European pension fund began looking for fiduciary managers to manage their pension fund (“the Fund”). The investment committee had become uncomfortable with several ongoing investment issues in the Fund and thought it was prudent to explore other approaches for delivering an integrated investment solution to the Fund.

The old model had an investment consultant providing investment and asset allocation advice. The consultant was also tasked with monitoring the performance of and developments at the Fund’s investment managers. The Fund had several equity, fixed income, real estate and mortgage fund managers, which made the process of monitoring so many moving pieces a challenge for a more narrowly focused investment consultant.

The committee needed proactive advice and solutions to deal with a number of investment issues:
• Exploring new asset classes and/or new managers in the face of disappointing equity performance
• Asset/liability-focused solutions to improve risk management in the Fund through hedging strategies and solvency status monitoring
• Timely and reliable delivery of consolidated manager performance results
• Timely delivery of assets, liabilities, and derivatives exposure to regulators

European Pension Case Study (PDF)