FP Banco Santander Totta (Santander Totta) manages €1.1bn on behalf of more than 9,500 current and former employees. It endured turbulent market conditions in 2022, which led to negative performances in most asset classes, but the pension fund’s long-term view prompted the decision to increase fixed income allocations. This generated most of the alpha it obtained against its benchmark during the year.

Active management of the pension fund also contributed to Santander Totta’s portfolio outperforming the benchmark by 220 basis points. Only the portfolio’s high allocation to equity in the first weeks of the year, which was reduced from 18-20% to 14-16%, prevented all asset classes from outperforming. The pension fund also increased allocation to private equity and infrastructure funds from 18% to 20%, which improved performance and lowered the volatility of the pension fund.

Santander Totta has always prioritised ESG policies, but these have gained additional importance in recent years. Banco Santander Totta joined a net zero initiative at the beginning of 2022 in line with the Santander Group’s corporate policy. As such, the pension fund has begun the process of transforming into an Article 8 fund under the EU’s Sustainable Finance Disclosure Regulation.

The ongoing development of BlackRock’s Aladdin platform has benefited the pension fund because it allows portfolio managers to concentrate on a single, reliable source of data. It has also enhanced risk and performance monitoring. This data is now included in quarterly and monthly performance meetings and the pension fund’s regular reports to stakeholders.

The market volatility in 2022 demonstrated that more communication activities were needed to provide the latest marketing notes and close client support service. Therefore, Santander Totta introduced a new monthly committee that gathered members from investments and commercial areas to support stakeholders.