Long-Term Investing by Pension Funds. How to Effectively Design and Implement Mandates: A Dutch Case Study

Abstract

Pension funds are increasingly trying to embed long-term investing choices within their portfolios. Many publications focus on the rationale for long term investing; however, it remains unclear what long term investing actually is, what sets it apart from the current way of investing, and how it should add value. The purpose of this paper is to provide a practical framework for pension fund trustees aiming to bolster and implement long term investing. In doing so, the paper’s contribution is that we choose the trustee’s perspective, build on different existing election and monitoring frameworks, and argue that pension boards have more instruments at hand to implement long-term investing.

Keywords: Pension Fund, Asset Management, Investment Mandate, Long-term Investing, ESG, Investment Process, Investment Governance, Selection and Monitoring, Organizational Design

JEL Classification: D81, G10, G11, G23, G41