The average return on segregated pension funds fell by 5.1 per cent last year, the first drop in seven years, according to benefit consultants, Mercer. The pension funds of larger companies are often segregated and individually managed by asset managers, unlike the unitised pension managed funds used by smaller firms.
Mercer's survey analysed the performance of around 200 pension funds with an asset base of more than €26 billion (£20 billion). Bank of Ireland Asset Management was the best performing segregated fund manager, recording a loss of just 1.5 per cent last year, well below the average.
By contrast, Setanta Asset Management, with its overweight position in equities, was the worst performer, losing 8.4 per cent, followed by Friends First with a loss of 6.9 per cent.
"There is little doubt that investors will be glad to see the back of 2001," said Mr Eamonn Liddy, senior investment analyst at Mercer. "After a year of deteriorating economic conditions and global uncertainty, the average Irish pension fund posted a negative return for the first time since 1994."
Mercer said the highest-ranked managers last year were those who maintained relatively high weightings in fixed interest and property, although stock and sector selection also proved crucial. Defensive sectors like financials and pharmaceuticals boosted the returns of funds that were biased towards them, such as Bank of Ireland.
Measured over three years, Montgomery Oppenheim headed the list with a return of 8.5 per cent while Eagle Star came last, producing a return of just 2.3 per cent compared with an average 5.4 per cent.
Over a five-year time frame, Bank of Ireland was again the top performer with a return of 14 per cent while Standard Life brought up the rear, gaining just 11.6 per cent compared with an average of 13 per cent.
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