NETHERLANDS - The €4bn Dutch pension fund of paint giant Akzo Nobel reported a 4.1% return on its investments during the first quarter of 2010.

Its equity portfolio, which represents 31.8% of total assets under management (AUM), was the best performing investment class over the three-month period, returning 8.3%.

The pension fund's fixed income holdings, representing 52.6% of total assets, delivered 2.4%.

Its smaller allocations to commodities (5.6% of AUM) and real estate (9.9% of AUM), produced returns of 6.1% and 1.6%, respectively.

The pension fund hedged its investments against the US dollar, the Japanese yen and the British pound.

The first quarter results took the pension fund's cover ratio to 109%, up from an absolute low of 90% at the end of March 2009.

But this is still below its funding ratio at the end of the first quarter of 2007, which was 160%.

Meanwhile, preliminary figures showed that the €500m Dutch pension fund of publisher Reed-Elsevier (SPEO), returned 9% during 2009.

The Stichting Pensioenfonds Elsevier-Ondernemingen saw its cover ratio rise from 84% to 93%, which is still short of the ratio of 105% required by the financial assessment framework (FTK).

However, the scheme has already made a financial provision for increased longevity, equating to four percentage points of its cover ratio, officials at SPEO pointed out.

They also said the pension fund had highlighted the arrangements with its external asset managers to reduce the risks in its investment portfolio, and that it has further reduced the allocation to risky corporate bonds.

Moreover, the scheme indicated that it is reconsidering its active mandates, and has already changed one equity mandate into a passive one at the end of 2009.

A new policy framework, focused on the scheme's risk profile, will be implemented in 2010, officials added.
 

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