US Institutional Plan Sponsors See Moderate Gains

(April 27, 2010) — US institutional plan sponsors experienced moderate gains in the first quarter of 2010, with a median return of 3.5% for U.S. pension plans, endowments and foundations in the Northern Trust Universe.

“This year started off with similar results as the fourth quarter of 2009, an indication that consistent performance is returning to institutional plans,” said William Frieske, senior performance consultant of Northern Trust Investment Risk & Analytical Services, in a statement, adding that returns in Q1 were driven by higher-risk assets. Small-cap stocks performed best among domestic equities and in international equities, emerging markets led the way, while high yield bonds were the highest-returning segment of the fixed income market, he said.

According to Northern Trust, corporate pension plans had the highest median returns (3.7%), followed by public pension funds (3.6%), and endowments and foundations (combined, at 3.3%).

Although alternative assets, such as private equity and hedge funds, continue to lag behind traditional equities, the gap is shrinking and if the trend continues they’ll surpass, said Northern Trust’s Frieske to ai5000.

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The Northern Trust Universe represents the performance of about 300 large institutional investment plans with a combined asset value of about $637 billion.

To contact the <em>aiCIO</em> editor of this story: Paula Vasan at <a href='mailto:pvasan@assetinternational.com'>pvasan@assetinternational.com</a>; 646-308-2742

(April 27, 2010) — Dutch transport pension fund Pensioenfonds Vervoer said it has dropped Goldman Sachs as the fund’s fiduciary manager, responsible for picking underlying asset managers.

The $11.9 billion national transport workers’ fund has replaced Goldman Sachs Asset Management with Northern Trust to run the fiduciary mandate GSAM held since 2006. “This evaluation shows that the fiduciary management by GSAMI and the results realised therefrom, have not met the expectations of the Board,” the fund said in a statement posted on its website.

The Dutch fund’s chief executive Walter Brand said the scheme had been evaluating the asset manager’s performance before Christmas, since it had not managed to outperform its agreed benchmark for more than four years. The fund represents employers and employees in the goods transport, private bus, taxi, mobile crane and inland ferry sectors.

“It is just coincidence that this announcement was made as the company’s parent, Goldman Sachs – which is totally separate to our arrangement – has been involved with the SEC investigations – our decision was made to evaluate their performance months ago,” said Brand to Financial News.

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The US Securities and Exchange Commission’s fraud charges against Goldman, which claim the bank concealed vital information, come at the heals of a push by the Obama administration and Senate Democrats for a financial regulation bill.

To contact the <em>aiCIO</em> editor of this story: Paula Vasan at <a href='mailto:pvasan@assetinternational.com'>pvasan@assetinternational.com</a>; 646-308-2742