NETHERLANDS - DNB, the supervisor of the Dutch pension sector, saidit is increasing its review of real estate transactions done by withDutch pension funds, on the back of fraud uncovered at the Philipspension fund, as well as increased volatility on the international realestate markets.
The main target of assessments will, accordingto the DNB, be to find out if there are conflicts of interest betweenthe pension fund management and the real estate parties involved.
Ina statement, David van As, DNB pension sector manager, said "atpresent, the DNB is assessing the situation at several Dutch pensionfunds. Our main focus in on the particulars of the respective financialtransactions done with the respective parties."
The DNB isspecifically reviewing the situation at six pension funds at present,but is also looking on a more general level at the management strategyof pensions fund in relation to real estate investments.
VanAs reiterated the "integrity research" by the DNB had already beenplanned before the crisis at the Philips pension fund emerged, however,he suggests the recent discovery of fraud has been given additionalfood for thought and has proven the DNB's approach is necessary.
VanAs also said it has become a necessity "as the risk profile of realestate investments is high". When asked about the main criteria behindthe assessment of a pension fund, Van As said only funds holding asubstantial real estate portfolio will be assessed, albeit noindication of volumes have been made by Van As.
The DNB officialalso stated it is not only pension funds which will be reviewed butthird-party asset managers also involved in the investment process.
Moreover,the Philips pension fund crisis has already resulted in more and morepension funds are selling off part of their own real estate portfolio. (See earlier IPE Real Estate story: Philips scheme dismantles real estate portfolio)
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