Russell Investments Is Managing Nestlé’s Dutch Pension Fund

Russell Investments is the new fiduciary manager of Nestlé’s Dutch pension fund, following the Swiss food and drink company’s decision to cut its in-house division last year.

Russell has been running the $702 million Pensioenfonds Alliance investment portfolio since May, Pensioen Pro confirmed. In Pensioenfonds Alliance’s 2017 annual report, the business chose to ditch its internal fiduciary manager, Nestlé Capital Advisors. Nestlé also axed its in-house UK investment manager, Nestlé Capital Management, in March.

In addition, the company’s Ireland-based investment division, known as “Robusta,” has been delisted from the Irish Stock Exchange since last August. BlackRock has been running that division since May 2017.

It is not known if the Swiss-based Nestlé’s Capital Alliance is still in existence, despite Switzerland’s company register, Zefix, listing the fiduciary branch as operational.

For more stories like this, sign up for the CIO Alert newsletter. 

Alliance’s board nixed alternative fixed income investment plans as a result of the in-house removal, instead moving the money to corporate bonds. The fund, which also runs the benefits plans for Nespresso Nederlands and pharmaceutical company Galderma Benelux, also wants to increase its interest rate hedge from 45% to 75% of pension liabilities as part of a de-risking strategy.

Pensioenfonds Alliance is 111% funded, according to the plan’s annual report.

Nestlé has $130.8 billion in assets as of December 31, 2017.

Tags: Nestlé’, Pension, Russell Investments

The Endowment Index calculated by Nasdaq OMX fell for the second consecutive quarter, declining 0.41% on a total return basis for the three-month period ended June 30, after dropping 0.36% during the first quarter of the year.

Never miss a story — sign up for CIO newsletters to stay up-to-date on the latest institutional investment industry news. 

The index decoupled from the S&P 500, which gained 3.43% during the same period after losing 0.76% in the previous quarter. Year-to-date, the index has declined 0.77%, while the S&P 500 has gained 2.65% so far in 2018. The first half of the year has been a reversal of fortune for the index, which ended 2017 up 17.6%.

“The primary thematic economic news of the second quarter, including a strong US economy, rising domestic interest rates, global trade protectionism, and higher oil prices were reflected in the performance of the index’s constituents,” said Nasdaq OMX in a release. “Domestic equities and oil and gas were in focus, while emerging markets, particularly China, a primary target of US tariffs, lost favor.”

Despite ending the quarter lower again, 10 of the index’s 19 components posted gains during Q2, though only four gained more than 1%. The biggest gainers were commodities-oil and gas, which returned 17.20%, followed by domestic real estate, which climbed 8.83%. Domestic equity rose 3.90%, while commodities increased 2.30%.

Emerging Markets-China led the nine components that posted declines, tumbling 14.19% during the quarter, followed by emerging markets-equity, which shed 7.76%. Gold was off 5.59%, and emerging markets-fixed income ended the quarter off 4.19%.

The index represents an asset allocation used by major universities’ endowments, and its methodology is based on the portfolio allocations of more than 800 higher learning institutions managing over $500 billion in total assets. The asset allocation includes stocks, bonds, and alternative investments, such as hedge funds, private equity, and real assets.

Within each of the 19 components are more than 30,000 underlying securities, with a current target allocation of 52% alternatives, 36% equity, 8% fixed income, and 4% liquidity, which is represented by the SPDR Bloomberg Barclays 1-3 Month T-Bill ETF.

Tags: Endowment Index, Endowments, Nasdaq OMX, S&P 500