The rise of pension fund capitalism in Europe: An unseen revolution?

New Political Economy

Volumn 13, Issue 3, 2008, Pages 249-270

  Dixon, Adam ^a  

^a UNIVERSITY OF OXFORD   (United Kingdom)

Author keywords

[No Author keywords available]

Indexed keywords

CAPITALISM; PENSION SYSTEM;

EURASIA; EUROPE;

EID: 52049118377     PISSN: 13563467     EISSN: 14699923     Source Type: Journal    
DOI: 10.1080/13563460802302560     Document Type: Article

References (96)

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14. Dutch pension funds, such as ABP, have become some of the most sophisticated and active pension-fund investors in world, warranting their inclusion alongside Anglo-American pension funds.
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46. For a more complete understanding of these instruments and how they work, see John Hull, Options, Futures and Other Derivatives (Prentice-Hall, 2005).
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58. See Gordon L. Clark & Tessa Hebb, 'Pension Fund Corporate Engagement: The Fifth State of Capitalism', Relations Industrielles/Industrial Relations, Vol. 59, No. 1 (2004), pp. 142-71. Here, I must mention that some scholars may perceive that the type of pension fund, either DB or DC, has an important effect on the turnover rate of capital and whether the capital is 'patient' or 'impatient' vis-à-vis the firm - that is, the fund/firm relationship. This is evident in the work of Michel Goyer, who argues that DB pensions represent 'patient' capital whereas DC pensions represent 'impatient' capital.
59. See 'Varieties of Institutional Investors and National Models of Capitalism: The Transformation of Corporate Governance in France and Germany', Politics & Society, Vol. 24, No. 3 (2006), pp. 399-430. One problem with this approach is that the distinction between DB and DC has become less relevant globally as many DB pensions have closed and/or are being replaced with hybrid forms. More importantly, this approach fails to recognise that many, if not most, DB pension funds because of size constraints delegate investment management to outside managers, as do the FRR and the ERAFP. These outside managers include the mutual funds, hedge funds and private-equity funds which represent the 'impatient' capital in this theoretical approach. So, for example, a public DB pension may have a low turnover rate, a sign of 'patient' capital, in its direct equity investment but also have portions of its allocation invested in hedge funds or private-equity funds with high turnover rates that also engage firms.
60. Regarding this view see Michael C. Jensen & William H. Meckling, 'Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure', Journal of Financial Economics, Vol. 3, No. 4 (1976), pp. 305-60.
61. For a more thorough discussion on the theory of the firm in contemporary corporate finance, see Luigi Zingales, 'In Search of New Foundations', Journal of Finance, Vol. 55, No. 4 (2000), pp.1623-53.
62. FRR, 'Proxy Voting Guidelines', Unofficial Translation, April 2007.
63. Official translation from FRR of, 'Decree No. 2001-1214 of 19 December 2001 pertaining to the Fonds de réserve pour les retraites', Journal Officiel de La République Française, 2001.
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68. See Mike Burkart & Samuel Lee, 'The One-Share, One-Vote Debate: A Theoretical Perspective', European Corporate Governance Institute Finance Working Paper Series, No. 176 (2007).
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72. for reference to recombinant capitalism see Colin Crouch, 'Models of Capitalism', New Political Economy, Vol. 10, No. 4 (2005), pp. 439-56.
73. O'Sullivan, 'Acting Out Institutional Change'.
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75. ERAFP Investment Policy, 14 June 2006.
76. 'Décret n̊2004-569 du 18 juin 2004 relatif à la retraite additionnelle de la fonction publique. art. 29, Journal Officiel de la République Française, 2004.
77. Code de la Sécurité Sociale, R731-25 & R731-26.
78. 'Arreĉté du 26 novembre 2004 portant application du décret n̊2004-569 du 18 juin 2004 relatif a' la retraite additionnelle de la fonction publique. art. 19', Journal Officiel de La République Française, 2004.
79. Author's translation of: 'Décret n̊2004-569 du 18 juin 2004 relatif a' la retraite additionnelle de la fonction publique. art. 29', Journal Officiel de la République Francaise, 2004.
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86. See OECD, '2006 Survey of Investment Regulations of Pension Funds' (OECD, 2007).
87. In an interview with ERAFP representatives held in Paris in late November 2007 it was suggested, in concurrence with the analytical logic of this section, that the rapid growth of the fund's assets would likely induce change in fund's asset management and investment strategy. I follow the methodology of 'close dialogue' and maintain the anonymity of those interviewed. See Gordon L. Clark, 'Stylized Facts and Close Dialogue: Methodology in Economic Geography', Annals of the American Association of Geographers, Vol. 88, No. 1 (1998), pp. 73-87.
88. Author's translation of French president Nicolas Sarkozy's speech at the US Congress, 7 November 2007.
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