Investment Beliefs that Matter: New Insights into the Value Drivers of Pension Funds

34 Pages Posted: 8 May 2010

See all articles by Kees C. G. Koedijk

Kees C. G. Koedijk

Tilburg University - Department of Finance

Alfred Slager

Tilburg University - TIAS School for Business and Society

Rob Bauer

Maastricht University

Date Written: May 8, 2010

Abstract

A direct relationship between the observed investment beliefs held by pension funds and performance measures is tested using an international sample of pension funds. Investment beliefs address strategic choices in the investment philosophy and process that affect the future performance of the fund. Data from over 600 funds between 1992 and 2006 show that the debates in the pension fund industry address the relevant issues: active management, alternative and new, innovative strategies. The addition of these activities does not necessarily improve the overall performance of a fund, and it may eventually offset the fund’s cost and net returns advantage due to its size. We find that the beliefs to which a fund adheres affect its success; the thorough consideration of the relationships between beliefs is equally important.

Keywords: Investment, Performance, Pension Fund, Governance, Strategic Management

JEL Classification: D23, G23, G31, G34, L21

Suggested Citation

Koedijk, Kees G. and Slager, Alfred and Bauer, Rob, Investment Beliefs that Matter: New Insights into the Value Drivers of Pension Funds (May 8, 2010). Available at SSRN: https://ssrn.com/abstract=1603262 or http://dx.doi.org/10.2139/ssrn.1603262

Kees G. Koedijk (Contact Author)

Tilburg University - Department of Finance ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31 13 4663048 (Phone)
+31 13 4662052 (Fax)

Alfred Slager

Tilburg University - TIAS School for Business and Society ( email )

Warandelaan 2
TIAS Building
Tilburg, Noord Brabant 5037 AB
Netherlands

Rob Bauer

Maastricht University ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands
+31 43 3883871 (Phone)

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