The e505m, Brussels-based VKG/CPM pension fund for Belgian physicians, dentists and pharmacists has placed a further e65m – including new fund assets, with US manager Sanford C Bernstein to invest in global large cap equities.
The move continues a shift in management style for large cap equities - away from a regional approach to a global set-up, with active diversification between value and growth in a 50/50 split.
VKG/CPM says that applying a style-based investment approach in a global context enhances diversification, noting that growth and value tend to come in and out of favour at different times in different markets due to economic and corporate profit cycles.
Karel Stroobants, deputy general director of the fund, comments: “This approach gives our managers more latitude to add value. With a global approach, managers have greater room to emphasise or de-emphasise countries in addition to individual securities.
“The country or regional approach becomes less important as large companies operate world-wide. In addition, a global portfolio is more cost-effective. A larger pool of assets with a single manager means lower overall fees.”
Previously, Stroobants notes the fund had been allocated 70/30 between growth and value as an indirect result of having multiple regional mandates.
Bernstein has managed equities for VKG for five years within US, Japan and Emerging markets ex Asia regional mandates.
The US and Japanese portfolios will be merged in to the global value equities portfolio with an extra e20m being added from growth mandates and new cash. The emerging markets portion will stay separate.
Stroobants, adds: “Bernstein re-ceived this assignment primarily because of its experience in managing global equities. In addition, we wanted a manager we could count on, one that we’ve built a strong relationship with over time.” Hugh Wheelan