Germany’s largest public pension appoints F&C for investor engagement

Bayerische Versorgungskammer, Germany’s largest public pension fund, has appointed F&C Investments to provide shareholder engagement services for its equities and bond holdings.

F&C will provide its responsible engagement overlay program to help the €48bn scheme establish a sustainability strategy.

Last year F&C applied its program, established in 2000, to 1778 companies which either it or clients using its program own.

Total voting assets clients have in the program are €96.7bn, of which €8.4bn are with German clients.

F&C says clients are currently most concerned about the consequences of climate change, resources security, and lack of corporate governance reforms.

It continues a trend evident at both domestic and foreign institutional owners of corporate Germany, to engage more actively with company managers.

The BVK scheme’s goal is to improve corporations’ management of their ethical, social and corporate governance risks.

In April 2010 the pension became the first in Germany to sign up to the UN Principles of Responsible of Responsible Investment.

F&C will engage on its behalf with companies on issues from environmental impacts, climate change, to board composition and remuneration. F&C will also implement voting programs at all relevant shareholder meetings.

Daniel Just, BVK’s deputy chief exeuctive officer and head of capital investments, said: “With the newly implemented strategy, BVK is sending an important signal to the investment management industry. We hope to see substantial progress in our portfolio as a result of working together with F&C in this engagement program”.

Germany has been a hot spot for shareholder engagement this year ever since significant part-owners of Infineon Technologies threatened not to re-elect Klaus Wucherer as chairman in February – the first such event in a DAX 30 constituent.

Ken Altman, founder of US proxy solicitation firm Altman Group, dubbed it a “seismic shift in Germany regarding shareholder activism”.

Thomas Richter, managing director at Bundesverband Investment und Asset Management, says: “Taking note of investor rights through mutual funds is, for us, obligatory. Only when we practice and interpret broadly our fiduciary duty can we count on the lasting trust of investors.”

David Walker

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