NETHERLANDS - APG Group has formalised a deal with the €1.6bn Italian pension administrator PensPlan which will initially see APG manage €100m in assets for the Italian provider.

Both parties have signed a letter of intent to improve the performance of Italian second pillar pension funds from the beginning of 2009.

Franck Erkens, spokesman at Cordares - recently merged with APG Group - confirmed the agreement with PensPlan is the result of Cordares' efforts during the past three years to penetrate the Italian market.

"The agreement is the first between a foreign player and a Dutch pension asset manager," stressed Adri van der Wurff, COO at APG Group.

Van der Wurff made it clear APG's cross-border focus will remain on Italy for the time being, to tap the network established by Cordares.

"However, instead of chasing specific deals, we will offer a wide range of services for pensions asset management," he added.

APG's aim is to widen the presence of its Institution for Occupational Retirement Provision (IORP) status across the European stage, even though APG acknowledges the concept is "much debated in the Netherlands".

So APG has unveiled an investment structure for Italian pension funds which are partially served by PensPlan, while the cooperation is said to provide PensPlan with access to the economies of scale in relation to risk management, asset pooling and fiduciary management.

According to Van der Wurff, APG and PensPlan have also agreed to look at the options of placing PensPlan's assets in a pension vehicle such as the API.

"This construction has attracted interest in Italy, because it offers ample space for investment while being under solid supervision," he explained.

"Dutch pension funds have a decades-long history and among Dutch pension management APG Group is of world class. With this collaboration, Italian pension funds can develop more rapidly and safely," suggested Gottfried Tappeiner and Michael Atzwanger, president and managing director of PensPan respectively.

PensPlan is a pension fund service provider across some of the smaller regions of Italy, as well as delivering risk management, manager selection and asset liability modelling to other pension funds and other institutional investors.

The PensPlan Profi fund was set up in 2006 at the initiative of South Tyrolean business associations by PensPlan's subsidiary PensPlan Invest. The company is based in the northern region of Trentino-South Tyrol, and has been set up by regional authorities to foster and develop additional pension schemes at a local level.

In contrast, APG Group consists of APG - the administrator and asset manager of the €170bn civil service pension fund ABP - and Loyalis, provider of the tax-friendly ‘levensloop', or life course schemes.

The group reently merged with Cordares, the main pensions provider for the construction industry and housing corporations.

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