Jean Frijns steps down this month as chairman of the Netherlands’ ABP Investments, the world’s second-biggest pension fund. Talk about leaving on a high note: ABP posted strong returns in 2003 and 2004 -- 11 percent and 11.5 percent, respectively -- which helped boost ABP’s funding ratio (assets to liabilities) to 120 percent, its best since 2001.
“We have been able to outperform in a consistent way,” says Frijns, 57, who has run the E170 billion ($220 billion) fund for 12 years. “We have built a very strong organization, and the broad strategy we have put into place is working.”
When he arrived at ABP, the fund for civil servants was still part of the Dutch government. ABP was privatized in 1996, and under Frijns’s direction it radically changed its asset allocation. Once 80 percent invested in domestic bonds, the fund now uses a sophisticated global investment strategy that is currently 40 percent bonds, 40 percent equities and 20 percent alternatives. In 2001, ABP became one of the first European pension funds to invest in hedge funds.
“It has been interesting, but it has also been challenging,” says Frijns, who will be succeeded by Roderick Munsters, CIO of Dutch pension fund PGGM. “During the bull market there was the worry that it was unsustainable. The bear market was far from pleasant, but worrying about something is not as bad as living through it.”
For his second act, Frijn will become chairman of the Dutch Corporate Governance Committee and move further into academia. Already a part-time finance professor at the Free University of Amsterdam, he will now develop a new graduate-level course on compliance for the school.
