Pan-European fiduciary practice survey

28 May 2003

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A group of private equity firms and institutional investors cooperate to determine which leading fiduciary practice can create value and provide sustainable profitability for pension funds, life insurance companies, family offices, banks and endowments in an increasingly difficult market. Participating institutional investors include the Trade Union Congress, Dow Europe, The Royal Mail, the Dutch Railway Pension Fund, Asea Brown Boveri, the Swedish National Pension Fund and the Swiss Social Security. They have joined funds-of-funds such as Adveq (Switzerland), Fondinvest Capital (France) and Global Vision AG Private Equity Partners (Germany) as well as direct equity managers Schroder Ventures Life Sciences (UK), Sofinnova Partners (France), the ABN AMRO Capital Group (Netherlands, France and UK) and CDC Ixis Equity Capital (France).

The survey is also backed by a group of consultants, including the Swiss Capena Group, Professor Stefan Jugel in Germany and Capital Resource Advisors associated with RogersCasey in the USA, information providers such as PE Source and Investment & Pensions Europe as well as technology provider Netage Solutions. The target is to focus on the right issues and ensure maximum distribution of the results among institutional investors and general partners in late Summer 2003 when the survey will be completed and all participants will have been fully briefed.

According to RCP & Partners, the organizers of the survey, understanding value creation for institutional investors has become as important as securing performance, if only to better understand the asset class and what it contributes in an overall asset allocation strategy. This means that general partners must be able to understand how they create value, measure their value creation and report it in a meaningful way to clients. Fees and carried interest should reflect more finely value creation ability by general partners. Those who cannot properly define the value they create on a sustainable basis or align their fees according to performance will increasingly face problems in fund raising, argue the survey initiators.

The study aims at discovering which fiduciary practice is more likely to generate clear value creation patterns at the level of the fund manager or general partners. Such practice should act as a catalyst to deliver more sustainable performance and ease the way to fundraising, by making the asset class easier to understand. The survey's focus is on two aspects: a) Value creation practice involving the whole process of investing and enhancing the clients' capital; b) Value creation means covering the three most important features of protecting and measuring value creation through people, client care and risk control, all stemming from the organisational structure of the general partner. The study involves an Internet questionnaire with some 150 questions, most of which are closed, a list of required documents as well as direct interviews.

Contact RCP & Partners at Tel: +41 22 827 2317 in Geneva and ask for Jean-Francois Van Hollebeke or send an Email to: jfvh@rcp-partners.com