Bespoke and multi-client asset pooling solutions

The earliest asset pooling solutions were tailor-made solutions created for the largest multinationals (Shell and Nestlé). These solutions required enormous investment in time and money. Such ‘one-off’ solutions are simply not affordable for smaller companies, which is one of the reasons why asset pooling has been slow to be adopted. With the development of multi-client asset pooling, companies no longer need to design their own solutions and instead have access to a ready-made solution at a fraction of the cost.  As a result, asset pooling is now within the reach of companies of all sizes .

Many ways to pool your pensions

Although the benefits of asset pooling may be clear, creating a cross-border asset pooling solution for the first time is a difficult process requiring considerable international expertise, and the variety of potential solutions make it difficult for companies to decide which solution may be appropriate for them.

Asset pooling solutions can be divided into two groups: single vehicle pooling, and data and administrative pooling. Under single vehicle pooling, we can understand IORPS and asset pooling solutions. Data and administrative pooling involve centralizing pension management, including the management of pension assets without actually pooling the assets into a single investment vehicle. Administrative pooling is a logical next step after global custody, but requires more internal organization, such as setting up asset management committees for hiring managers. Administrative pooling offers some – but not all – of the benefits of asset pooling and can be used as a first step towards full asset pooling.

The new generation of multi-client asset pooling solutions enables companies to bypass some of the difficulties of implementing administrative asset pooling and offers significant additional benefits.  

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