LONDON (Reuters) - European pension schemes are scrambling to assess their potential losses from the alleged $50 billion fraud by prominent Wall Street trader Bernard Madoff.
Some of the largest pension schemes in Europe told Reuters on Tuesday they were exposed to Madoff’s asset management firm via fund of funds structures.
Possible losses by fund managers and banks range from a few million dollars to the $3.05 billion potentially faced by Santander, Spain’s largest bank.
Dutch fund manager Mn Services, which manages the assets of some pension schemes, said it had some exposure through one of its investment funds that had invested through Madoff’s firm.
“We think it is not a big amount,” a spokesman said.
The country’s largest pension schemes, the 195 billion euro ($266.4 billion) ABP and the 81.9 billion euro PFZW, avoided exposure.
“At the bottom-up level people pay a lot of attention to stock-picking ... but much less attention is given to top-down analyses and choosing the right manager,” consultant Erik van Dijk of Dutch firm Compendeon said.
A fund manager for Austria’s largest pension fund, the 4 billion euro VBV Pensionskasse, said the scheme had also been hit indirectly through its hedge fund managers, EIM Group and Reichmuth.
Reichmuth, a Swiss private bank, said its fund of funds had an exposure of about $325 million, while EIM told Le Temps it had a $230 million exposure.
Another large Austrian scheme, the multi-sector 2.5 billion euro APK Pensionskasse AG, which manages the Thomson Reuters’ pension scheme in the country, said it had not invested through Madoff’s firm.
“It was not so much that the returns were too good but there was no convincing explanation as to how the returns had been achieved without interruptions,” said APK Chief Executive Christian Boehm.
The Italian pension regulator, Covip, told Reuters that pension schemes set up after 1993 are not allowed to invest in hedge funds, but schemes set up before the 1993 reform could be exposed.
The regulator is investigating which pensions schemes could be exposed and expects to report in a few days.
Reporting by Cecilia Valente, additional reporting by Marina Ciaramidaro and Gilbert Kreijger; Editing by David Cowell