Vanguard launches $10bn pension pooling fund

“The Vanguard Group has entered the pension asset pooling marketplace with more than $10bn assets under management in the Vanguard Common Contractual Fund,” the Valley Forge, Pennsylvania-based firm said.

The fund is an open-ended fund umbrella structure domiciled in Ireland and established under UCITS III guidelines, the firm said.

It cited economies of scale and tax transparency as key advantages of the CCF. Vanguard Investments’ Brussels-based executive director Francois Passant told IPE that Vanguard had “done its homework” on the CCF and its rival, the Luxembourg FCP (Fonds Commun de Placement).

He declined to name the clients or say how many there were. He said the new CCF was for multinationals facing pension pooling issues or for large local in-country pension funds.

“It targets large domestic and multinational pension funds.”

The move was a logical one for Vanguard, which only manages institutional assets in Europe, Passant said. Plus it already has relationships in the US with multinationals via 401(k) plans. “It’s a natural extension for us.”

The CCF comprises multi-currency share classes of index and enhanced equity portfolios.

In January Vanguard said it had more than $15bn under management in Europe.

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