First past the post
“A consistent and well-structured strategy that is focused on its members,” judge’s comment
WINNER
Country |
Germany |
Type |
Corporate pension funds and group retirement plans |
Members |
135,000 active |
AUM |
€6,670m |
Performance |
10.7% (1yr) |
As at 31 December 2023 |
Bosch Pensionsfonds (BPF) has come a long way since it was created as Germany’s first group corporate pension fund under the Pensionsfonds model back in 2002. This is not its first win as the IPE European Corporate Pension Fund of the year and its innovation over the years is said to have influenced the development of Germany’s pension scheme sector, not least the adoption of the Bosch Law in 2016 that overhauled the annuities sector in Germany to allow pension funds to offer higher levels of benefit at retirement from return-seeking investment strategies.
BPF relies on a dynamic, proactive risk management system that is overseen by a dedicated risk manager and supervised by an independent investment controller, a well-balanced portfolio of active and passive fund managers who broadly diversify its investments and effective, measured communication with members who have both online and mobile access to their accounts.
Driven by high return opportunities with relatively low volatility, BPF was an early mover in Germany adding alternative investments to its portfolio. It now exploits a full repertoire of exposure to alternatives from private equity and infrastructure equity to private corporate debt and infrastructure bonds, not to mention real estate. Its alternatives strategy has consistently outperformed expectations and is based on assigning best-in-class managers to its mandates.
Another facet of BPF’s operations that is lesser known is its approach to reporting. To enhance transparency and make monitoring and steering more effective, it has developed what it deems a groundbreaking, comprehensive, and bespoke reporting system tailored specifically for its alternative investments. Backed by almost thirty review criteria across seven critical dimensions, the process provides unparalleled insights that BPF can draw on to assess the progress and performance of each investment and identify potential room for improvement. Moreover, evaluating the total expense ratio leads to complete understanding of any performance leakage and enables full cost transparency.
STRATEGIC TAKEAWAYS
➤ Dynamic proactive risk management and balanced active and passive strategy |
➤ Diversified and extensive alternatives portfolio |
➤ Comprehensive reporting process to improve transparency and governance |
HIGHLY COMMENDED
Country |
Spain |
AUM |
€130m |
Performance |
6.33% (1yr) |
Following a recent comprehensive review, Bridgestone Hispania Pension adjusted its strategic asset allocation to include a broader range of asset classes by incorporating alternative investments. To determine the target allocation for the new portfolio, it considered the characteristics of the underlying fund population, including age distribution, euro-weighted distribution, expected redemptions and desired portfolio risk profiles. This led to an optimal target allocation of 26%, comprising 22% in illiquid assets such as private markets and 4% for liquid alternative strategies.
Country |
Belgium |
AUM |
€388m |
Performance |
BE DB section: 12.09% |
Euroclear Pension Fund’s recent focus has been on establishing a more tailor-made ESG approach, concentrating initially on the global equity portfolio within the defined benefit segments of its Belgian and Dutch arrangements. This follows analysis that shows that each asset manager has a view on how best to apply ESG. To achieve its objective, it has partnered with a specialist firm dedicated to ESG for institutional investors to help to set up a bespoke benchmark and global equity mutual fund.
Judged by
Sam Gervaise Jones
Philip Neyt
Josef Pilger
Kiemthin Tjong Tjin Joe