UK - Cardano, the Rotterdam-based consultant specialising in derivatives and risk, is now actively competing against mainstream UK firms for investment consulting business.

It has just launched its investment and risk consultancy model in the UK following the official opening of its London office this week, which is headed by Kerrin Rosenberg, a former Hewitt partner recruited earlier this year.

The firm will use its affiliate Altis Associates, based in Zug, Switzerland, for manager selection and Cardano's existing derivatives and risk operations in Rotterdam.

It aims to provide a service similar to fiduciary management in the Netherlands, whereby pension funds outsource portfolio construction risk budgeting, manager selection, reporting and associated services to a specialist provider.

However, Cardano will not be using the term "fiduciary" to describe its service in the UK since, unlike in the US, trustees retain responsibility for the investment decisions made on behalf of the scheme. Instead, it is describing itself as an "investment and risk partner".

Rosenberg, who is CEO of Cardano UK, told IPE he aims to recruit a further 10-15 staff this year to work in the London office, including to provide additional support to Altis.

The service aims to compete both with traditional investment consultants and investment banks' dedicated advisory units for pension funds by providing what is in effect an in-house investment team for trustees of schemes that are not able to justify their own in-house operation.

"We want to replace the traditional consulting model where you have advice giving but not taking responsibility," Theo Kocken, CEO of Cardano told IPE.

"We are providing an option for trustees who are not large enough to set up their own in-house fund management. There is a huge difference between ourselves and the competition. They are advisers - their job is to give an opinion but they are not able to implement strategy," he continued.

"Banks are not trying to provide holistic, integrated solutions, they are providing advice on specific subjects," Kocken added.

"The biggest difference is that we are independent and we have people who are independent."

Rosenberg said Cardano's approach will be first to discuss objectives with clients: "In the UK, if you go to 99% of trustees of pension funds and ask them what the objective of their advisers is, they don't know," he commented.

Cardano already provides bespoke derivatives advice to Hermes, the in-house investment manager for the BT Pension Schemes and to Lloyds TSB. It is regulated by FSA in the UK and by the Dutch financial markets authority AFM in the Netherlands.

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