ABP mandates State Street with US and Japanese assets

ABP, a pension fund for public employees in the governmental and education sectors in the Netherlands, has mandated financial services company State Street Corporation (State Street) to provide custodial and global securities lending services to ABP's United States (US) and Japanese assets. This mandate by one of the three largest pensions in the world is estimated to be worth $21 billion.

"A mandate of this magnitude marks an important extension of our successful relationship with ABP," notes Ronald E Logue, vice-chairman and chief operating officer of State Street. The global custodian's relationship with ABP started in 1991, when ABP appointed State Street as advisors on equity index management. In early 2001, ABP took a one-third stake in State Street Global Alliance, LLC, a jointly-owned subsidiary focused on partnering with innovative asset management specialty firms.

Ton Berendsen, member of the board of directors of ABP Investments remarks: "We have every confidence that State Street will provide us with the level of flexibility and global support we need to solve increasingly complex asset servicing challenges and to allow us to focus on our core business."

This mandate will allow State Street to continue the momentum gained in its two targeted high-growth markets of Europe and Japan. State Street established its presence in Japan in 1990 and has grown its number of employees from 40 in 1994 to almost 400 this year. The deregulation of Japan's pension market has been one of the growth factors.

ABP has assets amounting to 150 billion euros at the end of 2000, and more than one third of these assets are invested outside Europe. At year-end 2000, ABP's asset mix consisted of 52% fixed income, 39% equities, and 9% real estate. The strategy aim of the pension fund is to enhance investment returns through a decrease of fixed income in favour of equities, as well as an increase of the portfolio of long-term complex products such as structured finance, corporate bonds, mortgage portfolios and private equity.