A Pension Fund Divorce | Chief Investment Officer

Unipension, one of Denmark’s biggest pension managers, is to close down after losing two of its three primary clients and founding members.

The DKK 117 billion ($17 billion) group’s CEO Cristina Lage has resigned over the split. A clash of views among senior staff members led to the breakup, according to a statement by the two departing funds’ chairs.

The industry-wide pensions for Danish architects (Arkitekternes Pensionskasse) and veterinary surgeons (PJD) have quit Unipension—which they helped establish in 2008—over a disagreement about cost cutting and the overall direction of the partnership.

They had been unable to agree “to move fast enough in the direction we wanted,” said the leaders of the exiting funds.

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The two pensions take DKK 20 billion ($2.9 billion) in assets with them, and 18,000 members. Both are set to appoint Sampension as administrator and asset manager when Unipension shuts down at the end of 2016.

The decision leaves one retirement system—public-sector academics’ MP Pension—as Unipension’s only client. MP Pension is by far the biggest of the three funds at DKK 96.6 billion ($14 billion), according to its latest half-year report.

Each of the three participating funds had a 33.3% stake in Unipension and shared the costs, meaning PJD and Arkitekternes subsidized the much larger MP Pension.

In addition, they failed to agree on the creation of a “fund broker” arrangement, which the exiting funds believed would generated revenue and reduced costs. Unipension was founded in 2008 on the hopes that the three funds would move closer together. Instead, the chairmen said, the trio moved further apart.

CEO Lage resigned over what the company has described as a skilsmisse—literally, a divorce. Lage will exit early in the New Year, with chief finance officer Jens Munch Holst set to oversee the wind-up.

Tina Moses, president of MP Pension, maintained that the remaining fund was of sufficient size to continue to operate independently. She admitted that short-term costs may rise, but said MP Pension would “work to reduce extra costs” and implement “strategic initiatives around the future development” of the fund.

A former UK prime minister, sovereign fund CIO, ECB president, and State Department official have been tapped to join Bernanke on the ultra-elite advisory board.

PIMCO has appointed a five member-strong global advisory board including two ex-central bankers and a former UK prime minister.

Ben Bernanke, US Federal Reserve chairman during the financial crisis, will chair the group. He became an advisor to the Newport Beach, California-based firm in April this year.

Joining Bernanke are former European Central Bank (ECB) President Jean-Claude Trichet, ex-UK Prime Minister Gordon Brown, former CIO of Singapore sovereign wealth fund GIC Ng Kok Song, and Anne-Marie Slaughter, director of policy for the US State Department between 2009 and 2011. All held top level decision-making positions during the financial crisis.

Trichet led the ECB between 2003 and 2011, overseeing its immediate response to the global banking meltdown. He orchestrated a short-lived attempt to raise the currency bloc’s core interest rate despite critical debt problems in Greece, Portugal, Ireland, Italy, and Spain. Mario Draghi replaced him at the height of the Eurozone crisis.

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Gordon Brown served as the UK’s chancellor of the Exchequer, responsible for economic policy, for 10 years until succeeding Tony Blair as prime minister in 2007.

During Brown’s tenure in government, he claimed his policies would “end boom and bust,” but later backtracked. He retired as a member of parliament earlier this year.

Ng Kok Song led GIC’s investment team from 2007 to 2013. Earlier in his career, he acted as founding chairman of the Singapore International Monetary Exchange from 1983 to 1987.

Anne-Marie Slaughter is president and CEO of think-tank New America, and professor emerita of politics and international affairs at Princeton University. For two years until February 2011, she was director of policy planning for the US State Department.

PIMCO CIO Dan Ivascyn said the quintet was an “unrivalled team” that would provide “a valuable input to our investment process.” The group will meet several times a year, PIMCO said in a statement, as well as attending the group’s annual forums.