PGGM to Cut 200 Jobs | Chief Investment Officer

The investment manager for the second largest Dutch pension fund is to cut 200 jobs in an effort to cut costs, it has announced.

PGGM, which manages €178 billion on behalf of major pension PFZW and others, said it would reduce its workforce by 15% to try and cuts costs by €50 million a year.

“The Dutch pension market is becoming more dynamic and PGGM needs to have the flexibility to adapt,” said Else Bos, CEO of PGGM.

Bos said that the price of PGGM’s products had to be reduced because costs played an increasingly important role in pension funds’ considerations.

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She added that new services would also be brought online during what PGGM have termed “remodelling”. As the Dutch pension market has, in some instances, struggled to recover from the financial crisis, consolidation between funds has accelerated. PGGM—along with other providers—has been gearing up to attract smaller pensions to use its range of advisory, investment, and implementation services.

In June, Chief Investment Officer revealed that PGGM had created a fiduciary management arm enhance its services to its current clients and its offering to smaller peers.

A spokesman said all areas of the company could be hit by the job cuts, adding there may be compulsory redundancies. However, sources inside PGGM told CIO that staff had been well-briefed about the changes in the run-up to the announcement.

PGGM currently employs 1,500 who work in a range of investment-related sectors. The company was spun out of PFZW—the pension fund for healthcare workers—in 2009, according to a governmental decree.

The company, which scooped CIO’s prize for pension fund governance at the European Innovation Awards in May, said it would be consulting with Dutch trade unions at the end of the month.

The World Bank Group has announced a program to give global institutional investors access to the $1 trillion in infrastructure projects needed in developing nations through 2020.

The Global Infrastructure Facility (GIF) will be officially launched later this year “to deliver complex public-private infrastructure in low and middle-income countries,” with a focus on “climate-friendly” and trade-oriented investments, the international organization said.

“We have several trillions of dollars in assets represented today looking for long-term, sustainable, and stable investments,” said World Bank Group President Jim Yong Kim. “The real challenge is not a matter of money but a lack of bankable projects—a sufficient supply of commercially viable and sustainable infrastructure investments.”

According to the World Bank, private infrastructure investments in emerging markets and developing countries fell to $150 billion last year from $186 billion in 2012.

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The initiative earned the support of major asset management and private equity firms, pension funds, banks, and governments from around the world. GIF’s partners include BlackRock, Citibank, Caisse de dépôt et placement du Québec, the governments of Canada, Australia, Japan, and Singapore, and the European Investment Bank (EIB).

GIF “will also strengthen market investment in key infrastructure sectors and countries where such resources are lacking,” according Werner Hoyer, the president of EIB. “What we need are viable, bankable, and innovative projects which provide added value for investment and modernizing the economy.”

World Bank CFO Bertrand Badre said the project would “focus on the quality of infrastructure” rather than merely upping the amount invested.

The group said several projects had already begun.