The €26bn Shell defined benefit pension fund has appointed BlackRock as its fiduciary manager. As a result of the move, Shell’s in-house asset manager Shell Asset Management Company B.V. (SAMCo) will lose its largest client.
In addition to providing strategic advice and management of the investment portfolio, BlackRock will select and monitor investment managers as well as carry out balance sheet and risk management, including interest rate and currency hedging, the asset manager announced in a press release this morning.
The switch to BlackRock does not affect the €600m defined contribution fund which is managed by Achmea Investment Management.
BlackRock will also provide support in the integration of responsible investment and in the transition to the new pension system, said Kenan Yıldırım, director of the Shell pension fund.
“In light of the developments regarding the Future Pensions Act [the new pension law] and the request from our social partners to make the transition [to the new pension system], the board has decided, after a careful selection process, to appoint BlackRock as fiduciary,” Yıldırım added.
BlackRock’s appointment should “safeguard the execution of the investment process and ensure that the costs and risks of the transition are carefully managed,” he said.
SAMCo bleeds assets
The decision by the Dutch Shell pension fund to move to BlackRock means Shell’s internal asset manager, which is based in The Hague, will lose more than a third of its assets under management (AUM) and its largest client.
Shell did not respond to requests for comment about the impact of the decision on SAMCo, which employed 142 people at the end of 2022 but has seen its AUM shrink fast since.
Last year, SAMCo moved the management of its private equity and infrastructure assets, worth several billion euros, to LGT Capital Partners, an alternative investment manager headquartered in Switzerland. Last February, Shell USA transferred $4.9bn (€4.4bn) in pension obligations to the US insurance firm Prudential.
SAMCo still manages the assets of the Shell pension funds in the UK, Germany, North America as well as two global funds for (former) Shell employees in the rest of the world.
SAMCo has not published AUM figures since 2022 (€68.7bn), but the transactions mentioned above combined with the loss of the Dutch pension fund and the fact that the UK fund is cashflow negative imply it has lost more than half of its AUM in the past two years.
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