Large pension funds do not invest more effectively than smaller pension funds

Jacob Bikker () and Jeroen Meringa

Working Papers from DNB

Abstract: One of the key missions of pension funds is to maximise returns on pension investments. The five largest pension funds in the Netherlands allocate their assets differently among possible investment products compared to the smaller pension funds. This allocation strategy has positively impacted their net returns over the past decade without significantly increasing their risk exposure. Additionally, they benefit from economies of scale when investing their assets. However, these large pension funds have lost their returns advantage due to less effective interest rate risk hedging strategies. Furthermore, performance fees – paid almost exclusively by the largest funds – negatively impact net returns, except for fees associated with private equity and hedge funds.

Keywords: Pension fund investment returns; scale economies; investment allocation; pension funds size-return relationship; performance fees; consolidation (search for similar items in EconPapers)
JEL-codes: G23 (search for similar items in EconPapers)
Date: 2024-12
New Economics Papers: this item is included in nep-age
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.dnb.nl/media/0ssljik3/working_paper_no-822.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:dnb:dnbwpp:822

Access Statistics for this paper

More papers in Working Papers from DNB Contact information at EDIRC.
Bibliographic data for series maintained by DNB ().