REPLY/NPRF: I read with interest your Current Account column on April 26th. It stated that Irish fund managers who lost out in the bidding process for the National Pensions Reserve Fund (NPRF) are doubtless "bemoaning the nuisance. . . that is the EU Public Procurement Directive".

The article suggests that because Irish asset managers were awarded "only" €2.4 billion (the correct figure is €1.87 billion) out of a total of €8 billion, they are less than pleased and are blaming, in some way, the Procurement Directive. Nothing could be further from the truth.

Firstly, around a quarter of the NPRF funds are under the control of managers based in the Republic. Given that Irish managers manage only a fraction of the €33 trillion that makes up the global asset management industry this is a satisfactory outcome, particularly given the number and size of global investment management companies, from other major financial centres, who bid for different parts of the mandate.

In general, the mandates on offer required specific expertise, and a level of experience and track record related directly to these specific mandates. Many asset managers, which have operated successfully to the mandate requirements of their Irish clients, did not have that full track record. Nobody in the Irish asset management business thought that all or even a large part of these monies would be managed by Irish companies for this reason, not least because it was anticipated that the advisers would, both wisely and sensibly, spread the risk across the global industry.

Investment managers such as KBC Asset Management, based in Dublin and owned by Europe's eighth-largest fund manager, KBC in Belgium, has a natural European bias. To suggest we have a problem with the EU's procurement policies shows a lack of understanding on behalf of the correspondent. We regularly seek fund management mandates both within the Republic and further afield that are awarded under the same procurement rules. Far from being upset, it is genuinely pleasing to see the adoption of the procurement policy in our industry, which allows for a fair and open tendering process.

The article states that, for many years, the management of Irish pension funds has been with "a very cosy club" and that trustees owe it to their members and pensioners to expand their horizons in the selection process. But it is a truly global business. There was a time when Irish managers were favoured over external competition but it was when the majority of assets of such funds were denominated in Irish pounds, and Irish managers clearly had the specific expertise required at the time.

Irish managers are among the most global thinking of all their peers in other financial centres; the removal of exchange controls in 1989 placed an immediate onus on such managers to develop their expertise in cross-border asset management, to cover equity and bonds in all the leading markets.

I had been hoping, as I had seen evidence of it in our own business, that one of the benefits of the past 20 years of progress in the Republic was that we had stopped knocking ourselves and criticising success, and that there was a reasonable "Team Ireland" approach when it came to Irish businesses competing on the international stage. If our locally based competitors in the asset management industry do well internationally, then we are pleased for them, as it all helps to confirm our view that Irish professionals are well able to compete with their international peers. There is clear evidence of such success, which we applaud.

The Irish asset management industry has developed very successfully from very small beginnings over the past 25 years and has served the Irish investor very well. As an industry group, we have made a major contribution to the development of the national savings industry, particularly in the field of pensions.

The strong regulatory environment has seen the avoidance of many of the scandals that have bedevilled our industry in other financial centres. We are well placed to build on our success and continue to develop the appropriate level of expertise, which will allow us to continually compete for, and hopefully win, the right to manage a share of the growing NPRF.

Gavin Caldwell is chief executive of KBC Asset Management