Two years of UK court dates await Dutch pension fund, GSAMI

The UK’s Commercial Court could take two years to settle a claim against Goldman Sachs Asset Management International (GSAMI) brought by Dutch transport sector pension fund Pensioenfonds Vervoer (PV).

The Court, tasked under the English legal system with hearing complex business and finance cases, has been approached by PV over a claim for €250m in relation to fiduciary failures it alleges were made by GSAMI.

Walter Brand, CEO of PV , said he would not comment further on case specifics on the basis of his own legal advice, but that all details of the case were in the claim filed with the Court.

The case number registered with the Court is 2012-924. However, when approached by InvestmentEurope the Court confirmed that while filed, the documents are not yet publicly available because they have not been accepted by all relevant parties. Once public, copies of the case can be obtained from the Court for a fee.

A report by Reuters pointed to the claim being broken down into two constituent parts. Firstly, a claim for €81m, relating to investments in sub-prime debt, and secondly a claim for about €160m relating to the length of time it took GSAMI to implement a mandate change to invest in high yield bonds.

Reuters quoted a Goldman Sachs spokesperson, who said: “We acted prudently and complied with our mandate, fulfilling our obligations to our client. We believe the claim is without merit based on the facts of the situation, and we will certainly contest it.”

A statement on PV’s website notes that GSAMI was its fiduciary between 2006 – 2010. The pension fund announced in September 2011 that it had appointed Robeco as “integral manager” of its €11bn in assets, with responsibility to select and monitor external asset managers, as well as provide strategic and operational advice.

It is understood that the key period of the claims relate to actions by GSAMI in 2007 – 2009, when the credit crunch and subsequent global economic crises hit the markets, resulting in losses associated with investing in certain types of assets, but also losses from failing to sufficiently swiftly adjust investments into other assets – the second part of the claim.

The type of case and nature of the claims being heard are reasons why it could take the Court such a long time to reach a decision, according to lawyers for PV Brown Rudnick. Typically, such complex cases require a considerable amount of disclosure, including, as may be the case here, around how, when and why certain types of derivatives and legal structures were used.

Previously, there was a rash of legal cases filed in English courts involving claims for damages linked to action or inaction by financial professionals during the period of credit crunch and subsequent economic and financial market crisis. This has abated somewhat because both the courts and lawyers are increasingly demanding that for cases to proceed there has to be an element of effective liability established. Earlier cases often relied on ‘hindsight’ arguments, which courts have indicated they do not like.

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