Interest of American asset managers in Dutch companies is growing

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The shareholders’ meeting of Heineken in the DeLaMar theater last year
NOS News
  • Charlotte Klein

    editor Economics

The shareholders of large Dutch companies are mainly large American asset managers. Only a fraction of the direct shareholders still reside in the Netherlands.

The NOS has mapped out who the shareholders are of ASML, Shell, Unilever, ING, Ahold Delhaize, Heineken, DSM and Philips, large companies with a Dutch background.

This analysis shows that the high profits of these companies hardly reach Dutch pensioners, but that wealthy private investors in particular benefit from them. They have much more shares in these large companies, while the pension funds spread their investments as much as possible to keep the risks low.

In addition, a lot of money is invested through American asset managers and that can lead to problems, experts say.

Here are the shareholders:

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Pension funds and individuals can invest their money in two ways: either directly themselves or through an asset manager. Such asset managers invest money from others, such as individuals, pension funds or insurers, and receive a fee for doing so. The largest three in the world are all American: Blackrock, Vanguard and State Street.

Small Dutch pension funds often do not have the resources to invest their own money and outsource it, larger pension funds such as ABP and PFZW do it both ways: they invest it through their own managers APG and PGGM and they have their money invested by others. Although they do the latter much less. The five largest pension funds together invest less than 400 million euros in Blackrock, Amundi and State Street.

Private investors are increasingly putting their assets in the investment baskets of the large investment funds.

Cheap and efficient

“There has been a trend for some time that more and more is being outsourced to asset managers and I expect this to continue for a while,” says Gerben Everts, director of the Association of Effectenbezitters (VEB). The main reason for doing that is cost – it’s cheap – and efficiency.

“That makes it very attractive for pension funds. BlackRock, for example, has an earnings model where they provide standard products for the lowest costs. Pensioenfonds ABP serves more than 2.5 million families in the Netherlands, for them the few percentage points that you save by spending your money spend sometimes mean a much higher benefit.”

The largest shareholders by company:

1 2 3
ASML Capital Research Global Investors: 15.79 percent Capital World Investors: 5.85 percent BlackRock: 5.56 percent
Shell BlackRock: 7.52 percent Vanguard: 3.33 percent Norges Bank Investment Management: 2.87 percent
Unilever BlackRock: 8.40 percent Vanguard: 3.19 percent Leverhulme Trust: 1.86 percent
Ahold Delhaize BlackRock: 5.89 percent Amundi: 3.39 percent State Street: 3.12 percent
Heineken Heineken Holding: 50.01 percent FEMSA: 8.63 percent GQG Partners: 1.89 percent
ING BlackRock: 5.51 percent Amundi: 3.09 percent Norges Bank Investment Management: 3.04 percent
DSM Capital Research Global Investors: 6.12 percent BlackRock: 5.88 percent Artisan Partners: 3.75 percent
Phillips BlackRock: 5.63 percent Artisan Partners: 5.10 percent T. Rowe Price: 4.94 percent

Pension funds therefore gain something by having their assets invested, but there are also caveats to this. Everts: “Some asset managers are becoming more and more powerful. BlackRock manages EUR 8050 billion, which means that they are in the top 3 of the largest investors in almost every large company. That can be a problem. How do you ensure that you serve the right interests if you also are the competitor’s largest shareholder?

As a result, it is practically impossible for a company like BlackRock to attach consequences to criticism as a shareholder, says Everts: “They can’t really ‘vote with their feet’, or walk away if you disagree with a company’s course.”

Surrender autonomy

That is also the concern of Hans Stegeman, Triodos’ chief economist. “By doing it through an asset manager, a pension fund surrenders part of its autonomy. The focus is then on money, and not on influence. So they give that away.”

Stegeman thinks that this will further reduce the influence of average employees and pensioners on large companies. “Not the lenders, but the asset managers are allowed to attend the shareholders’ meeting. So an extra link has been added to the system, while we know about the financial crisis: the more links, the less well the interests of those at the bottom of the chain are safeguarded. “

In addition, these asset managers often invest passively, says Stegeman, and that makes the influence even smaller. “With passive investing you follow an index, so a kind of average of a basket of shares. That’s cheaper, that’s why they do it, but you no longer have any insight into the results and behavior of companies in which you invest.”

Not for free

In addition, this system also costs money, Everts emphasises. It is true that most of the money that asset managers invest comes from pension funds – the pension pot is the largest pot of money in the world – but of course part of the money also goes to the asset managers themselves.

This is especially true for so-called private equity companies, private investors who invest with more risk in the hope of higher returns. For example, they invest more with borrowed money in young companies.

There, the return can be much higher with good results, but on the other hand, with bad results, the losses are also much higher. And last year it was announced that the Netherlands’ largest pension fund ABP alone had spent 2.8 billion euros on bonuses for the top people of these types of private equity companies.

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