Pensioenfonds Vervoer, the Dutch transport industry's pension fund is preparing to sue Goldman Sachs' Asset Management for €250m claiming it failed to properly manage its portfolio during the height of the crisis.
In 2008 the fund lost 14% of its value, which was 5.4 percentage points below the benchmark which Goldman Sachs' had set.
The case, which was submitted to the high court in London last week, is thought to be important as it could throw more light on how Goldman Sachs handled its customers' money in the run up to the crisis.
In a statement to the press the investment manager said: "We acted prudently and complied with our mandate, fulfilling our obligations to our client." It went on saying it would "certainly" contest any such claim made by the pension fund.
Earlier this year the firm was also sued by the largest fund in the Netherlands, ABP, in a bid to claim back an undisclosed amount of losses. The losses allegedly occurred from investments in residential mortgage-backed securities (RMBS), sold to the scheme by the manager.
Both cases can be very damaging for Goldman Sachs' reputation in the small but important market that is the Netherlands as the asset manager planned to open an office in Amsterdam this year to tap into its share of the Dutch pension industry, which is worth roughly €800bn.
On top of that, the mandate – which came to an end when the contract finished in 2010 – was the largest pension fund mandate for Goldman Sachs Asset Management in the Netherlands.
The losses, the after effects of the crisis and overall low discount rates have ensured that the coverage ratio of the fund has been hovering just below and above a 100% over the past two years, too low according to the standards set by the Dutch central bank (DNB) which requires a minimum of 105%.
Luckily for the scheme, the Dutch Pensions Minister Henk Kamp announced last week that the discount rates would be artificially lowered by the end of this year ensuring most funds will not have to cut their pay-outs or hand in strict three year recovery plans with DNB. To find out more click here.
First published 09.07.2012
azeevalkink@wilmington.co.uk
