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Just after we learned that GSAM CEO Jim O'Neill is going to leave GSAM, we also learned about this nasty court case between GSAM and one of the Netherlands' larger pension funds (Vervoer, for the Transport and Logistics sector, with AUM of Euro 11 billion).
Taking into account that the role of a fiduciary manager is about TRUST.... this is a nightmare for every asset manager. Of course it is also a nightmare for the suffering pension fund.
There are of course always 2 sides to this:
1) Pension Funds are led by professionals who supposedly should know about markets and strategic allocations as well. And to a certain extent also have at least some ideas about manager selection. We know the people at Vervoer and they are indeed professionals.
2) Whatever you believe and whoever you think is right, fact is that GSAM did suffer a few bad years in the Netherlands with almost all pension funds not doing well. That does create opportunities to (mis)use hindsight. Definitely true.
3) On the other hand, there are also other cases out there in which the main issue was that something was wrong with the relationship between GSAM and some of its main clients. Well, when we observe smoke, there might be a fire not too far away.
Bottom-line is that we do respect Vervoer as a good pension fund and GSAM as a good asset manager. LMG will therefore carefully follow this case.
In this particular case I sense that the truth will most likely lie somewhere in the middle. But the end responsibility does in all cases remain with the pension plan that assigns a fiduciary manager and asset managers.