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Cappital: ‘As a real pension investor, TKP Investments advises us well on lifecycles’

Cappital Premium Pension Institution now implements defined contribution plans for 200 employers and their 70,000 employees. Director Erik Hof recently sent his clients a cake to celebrate a milestone: after healthy growth, one billion in assets – managed by TKP Investments – has been reached. ‘We started with nothing and the interest in DC plans only increases every year.’

DC plan is modern and transparent

Founded in 2011 by TKP Pension, Cappital has now been active as a PPI for a good five years with Defined Contribution (DC) plans. With one billion euro in assets under management, it is one of the major PPIs in the market, which has reached a total extent of almost five billion. ‘We see the interest in the DC plan increase every year,’ says director Erik Hof. ‘It’s also a modern, transparent vehicle to which the pension sector will switch more and more, including the large companies that we focus on. Participants want more transparency on costs and returns and need more control over their money. Subsidization of the old by the young also concerns people; with an individual DC plan that is all arranged completely clearly. Due to the new regulations like the Wet verbeterde premieregeling (Premium Schemes Improvement Act) that make it possible to offer a variable pension benefit, it is also becoming a more and more worthy alternative.’

TKP Investments comes out of study of performance, costs and quality looking good

Cappital was obviously very familiar with TKP Investments via its founder TKP Pension when it joined forces with the fiduciary manager. ‘Via TKP Pension, various pension funds had already had good experiences with the way in which their DC plans were invested by TKP Investments. Basically, we built on the models that already sufficed very well before the PPIs were set up.’
The earlier family ties – TKP Investments arose from TKP Pension – do not prevent Cappital from acting independently with regard to TKP Investments as an external client. ‘We are free to move management elsewhere, and we leave that possibility expressly open. We do a study annually in which we monitor performance, costs and the quality of the recommendations among other things. TKP Investments repeatedly comes out of it well, and when that’s not the case, we discuss it with them.’

Manager selection ensures demonstrably better performance

With regard to performance, according to Hof, that is demonstrably better with fiduciary management via manager selection. ‘We are convinced that one manager can never be the best in all asset categories. Managers each have their own style, which does better in some periods than in others, and some managers have a model-based approach instead of a more fundamental approach. By choosing not just one, but multiple external managers, we can take advantage of the diversification benefits.’

Expert advice in the area of lifecycles

For Cappital, it is at least as important that TKP Investments is a real pension investor. ‘We see that from the recommendations, for example on lifecycles. They are highly skilled in modeling them according to the required risk and return profiles of all the participants. Due to changing market conditions, it is necessary to review the lifecycles regularly. And the PPI market is also fairly dynamic; there is stiff competition, on the quality of lifecycles too. Then it’s good that the experts from TKP Investments have timely recommendations on possible adjustments in the portfolio.’

A partner you can build on

Cappital started in 2011 with a blank piece of paper, so to speak, and has been able to keep its organization lean and efficient, with eight FTEs now. A condition for this is that it has to be able to build on partners like TKP Investments. The experts from TKP Investments visit Cappital’s clients regularly, where they act as a source of information for employers and participants, who have sometimes set up a pension committee for the DC plan. ‘The pension is of course an important employment condition, and the investments are an essential component of that. Thanks to TKP Investments, we can explain clearly what we do and how we do it. They’re pleasant, capable people and the turnover is small there; as far as I’m concerned, it’s a partner you can build on.’

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