PGGM Spin-Out Secures Pension Clients

Dutch-flavoured long-term mandates have found investors in the UK.

The group that created and launched an engaged ownership mandate for the second largest pension fund in Europe has secured $750 million from UK institutional investors.

Ownership Capital, the staff of which span out of PGGM—the in-house investment manager for the €143 billion PFZW—has announced it has won equity mandates from the Unilever UK Pension Fund, The Pensions Trust, and the Environment Agency Pension Fund.

“Investments are made with a ten-year time horizon, seeking to align the long-term success of well-managed companies with the long-term obligations of pension funds,” Ownership Capital said. The firm’s statement said the approach was “unprecedented” for a public equity manager.

“One of our core beliefs is that responsible investment can enhance long-term returns, and that as an investor we should act as a custodian of the assets and markets in which we invest,” said David Adkins, CIO of The Pensions Trust.

Ownership Capital’s portfolio holds just 20-30 stocks at a time, “enabling the investment team to take substantial stakes in and gain a deeper understanding of investee companies,” it said. The group has also implemented a proprietary investment process that integrates qualitative factors, such as management, governance, and sustainability within its financial analysis.

Alex van der Velden, partner and CIO at Ownership Capital, said while investing for PFZW, the team realised that much of the asset management industry was overly short-termist and failing to align its strategies with the long-term needs of pension investors.

The view falls in line with the study of the UK equities market undertaken by Professor John Kay in 2012, which showed an increasing trend in short-term investing and a disconnect between companies and their end investors.

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