Presentation for EPFIF Benelux Seminar

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(No Transcript)
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Presentation for EPFIF Benelux Seminar

• Pooling of Pension Fund Assets

12 December 2006
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• Speakers

• Ger Goris
• Managing Director of Goris Partners
• Experienced in turnaround and restructuring of
  pension funds
• Background in asset management, private banking,
  brokerage trading
• Erik Goris
• Managing Director of Goris Partners
• Experienced in financial transactions and project
  management
• Background in investment banking and law

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• Introduction to Goris Partners

• Services Consultancy and interim management
• Clients Corporate and industry pension funds
• History Since 1997
• Specific Set-up of management offices
  (bestuursbureaus)

Majority of customers in top 20 of the Dutch
pension fund industry
Currently active for a.o. the Dutch pension fund
for the transport industry
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• Topic of presentation

• The Dutch Experience So Far
• What the Future Might Bring

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• The Dutch experience so far

• Asset pooling for pension plans and asset
  managers just starting
• Cross-border pooling to date via Ireland/
  Luxemburg (e.g. Unilever)
• Use of Dutch pooling vehicles actively supported
  by Ministry of Finance
• Various initiatives underway (e.g. Aegon)
• Experience so far a lot of first time
  experiences
• Overview of experience so far through case example

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• Case example Overview

• Group of linked Dutch industry pension plans
• Management office (bestuursbureau) recently
  instituted
• gt7.0bn in assets
• Fiduciary management concept

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• Case example Purpose

• Increased cooperation between pension plans
• Central management/ monitoring of plan assets and
  liabilities
• Improved performance, lower costs
• VAT savings on fees service providers

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• Case example Structure (1)

• Entity pooling separate pooling vehicle
• Fund for joint account (Fonds voor gemene
  rekening or FGR)
• Tax exempt and tax transparent
• One pooling vehicle with separate sub funds
• Transfer of proprietary interest in assets to FGR
• Pension plans become unit holders in FGR

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• Case example Structure (2)

Structure without pooling
Pooling structure with FGR
Pension plan 1
Pension plan 2
Pension plan 1
Pension plan 2
FGR
Custodian
Custodian
Custodian
Asset Manager
Asset Manager
Asset Manager
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• Case example Structure (3)

Structure without pooling
Pooling structure with FGR
Pension plan 1
Pension plan 2
Pension plan 1
Pension plan 2
Sub Fund
Sub Fund
Equities
FI
Equities
Equities
FI
FI
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• Case example Structure (4)

One pooling vehicle with multiple sub funds
Pension plan 1
Pension plan 2
FGR
Sub Fund 1
Sub Fund 4
Sub Fund 2
Sub Fund 3
Equities
Alternatives
Fixed Income
Real Estate
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• Case example Tax (1)

Pension plan 1
Pension plan 2
Tax exempt status
Tax exempt for CIT Tax exempt for VAT Tax
transparent for WT
FGR
Custodian
Fees exempt from VAT
Asset Manager
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• Case example Tax (2)

• Various rulings on tax status required
• Alignment with foreign tax authorities (in
  particular US)
• Awareness on stamp duty on transfer of securities
  (e.g., UK)
• Sufficient lead time required
• Dutch tax authorities cooperative and Ministry of
  Finance supportive

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• Case example Operational (1)

• Fund administration
• Valuation
• Rebalancing
• Reporting
• Managing
• Transferability of assets, e.g. venture capital,
  real estate

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• Case example Operational (2)

Pension Plan
Reporting
Management Safekeeping
FGR
Cash Management
Custody
Asset Management
Valuation
Fund Administration Back Office
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• Case example Legal

• Fund documentation pretty straightforward
• Authority, direction, instruction
• Compliance issues, prepare KYC information
• Redocumentation existing contracts

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• Case example Lessons learned

• Size does matter
• Choice of partners highly important
• Alignment asset manager(s), custodian and back
  office is crucial
• Have all players timely into place

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• What the future might bring

• Concentration of pension funds might boost
  pooling
• (investment manager pooling)
• First step to merger of pension funds
• Cross-border pooling international corporations
• (multinational pooling)

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Questions?