Nationale-Nederlanden is a €8.8bn Polish defined contribution fund that is run by a team of eight portfolio managers supported by a chief investment officer and a trader. Investment risk is overseen by a separate team of five as well as a chief risk officer. It also has a dedicated corporate governance team, which seeks to engage with portfolio companies to support value creation./p>

Due to local laws approximately 80% of the fund is invested in Polish equities and given the fund’s size – it is the largest in the CEE region – it holds stakes exceeding 10% in more than 20 Warsaw-listed companies. Liquidity is low in this market, so the fund places a high level of importance on engagement to extract value from its investments.

Engagement initiatives include supporting the appointment of independent directors and long-term approaches to remuneration, as well as capital redistribution through buybacks and dividends. It also engages proactively and positively on ESG issues with its portfolio companies. It worked closely with PGE, the largest listed utilities provider in Poland, to develop and improve its decarbonisation strategy amid pressure from campaigners.

As a leading shareholder, the pension fund takes its responsibility very seriously when considering merger and acquisition transactions. Since the start of last year, Nationale-Nederlanden OFE has identified at least three M&A cases in which the bid price was raised significantly following pressure from the fund.

Nationale-Nederlanden is confident that its engagement approach has contributed to equity outperformance by companies where it has taken a leading role as an investor. To measure this, it created a benchmark index of 57 companies in which it was a leading institutional shareholder and compared the performance against blue chip, mid cap and small cap Polish indices. Over the past three- and five-year periods, the pension fund’s index has outperformed almost all the other benchmarks.