Money Manager Strives to Double Japanese Pension Assets

Dutch money manager Robeco Group aims to double assets from Japanese pension funds within two years, shifting investments away from traditional asset classes such as bonds and equities.

(June 1, 2010) — Within two years, Robeco Group, the Dutch money manager owned by Rabobank Groep NV, plans to double Japanese pension assets, which have been hit by two decades of waning markets and an aging population.

As funds seek to diversify investments away from traditional asset classes such as bonds and equities, Robeco, which has about $194 billion in total assets, aims to control a portion of Japan’s more than 60 trillion yen corporate pension market.

“We think this is the time to start tapping into the market,” Tanaka said in an interview in Tokyo with Bloomberg. “Pension funds are looking for products that have low correlation with market moves as they seek to dissolve their home-biased investments and battle low interest rates.”

Tanaka said to Bloomberg that Robeco’s Tokyo unit plans to hire one to two client service professionals this year in order to satisfy growing demand from Japanese clients.

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Since it opened in Tokyo in 2005, Robeco Institutional Asset Management B.V. Japan has grown assets from Japanese pensions to 60 billion yen ($657 million), investing them in a managed futures strategy run by Robeco’s Transtrend Inc. unit, Bloomberg reported. The strategy incorporates investment in financial assets ranging from equities to livestock and has returned 7.1% this year through April.

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

(June 1, 2010) – Charles Millard, the former head of the Pension Benefit Guarantee Corporation (PBGC), has been exonerated relating to his allegedly contact with investment firms during his tenure at the nation’s pension insurance fund.

In a letter addressed to Senator Chuck Grassley (R-Iowa), Rebecca Anne Batts, the PBGC inspector general, wrote that “my office has concluded its investigation with the United States Attorneys’ Office for the Southern District of New York, and no charges will be filed.”

The inquiry stemmed from “former Director Millard’s contact with the companies and executives involved with the award of the Strategic Partnership contracts,” Batts wrote. According to Batts’ 2008 report, Millard intervened in the evaluation of Goldman Sachs, JP Morgan Chase, and Blackrock at the same time as these firms were bidding for the right to manage a $2.5 billion chunk of PBGC’s assets. Millard was also accused of receiving assistance in finding a job for when his tenure was done from a Goldman Sachs employee. With the official exoneration from the Inspector General, however, no charges will be brought relating to either matter.

Before his term expired in January 2009, Millard proposed and received Board approval of a reform of the Corporation’s asset allocation. In February of 2008, the Secretaries of Labor, Commerce, and Treasury – the agency’s three-member Board – approved a move that would see its then-$55 billion allocated 45% to equities, 45% to fixed-income, and 10% to alternatives. While the plan was not implemented in its entirety before the end of his term – or, for that matter, before the equity crash seen in 2008 – Millard’s 20-month tenure saw the unfunded liability of the Corporation decrease from $18.9 billion to $11.2 billion.

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To contact the ai5000 editor of this story: Kristopher McDaniel at <a href='mailto:kmcdaniel@assetinternational.com'>kmcdaniel@assetinternational.com</a>