September 2020

first_imgIn the UK, the reduction was 2 percentage points. However, a slower rate than previously seen, given average equity allocations, fell by 27 percentage points over the last 10 years.A decrease in exposure to domestic equities continued as European funds diversify, and was matched with an increase to emerging markets.Almost half of the European funds now have allocations to these markets, a 13 percentage point increase from last year.The predicted shift of scheme fixed income allocations towards corporate bonds has also yet to materialise on a macro level.However, Mercer singled out Germany, the Netherlands and Sweden as markets where this was prominent.The UK’s shift to using index-linked instruments continued, with the proportion of fixed income assets matching inflation now 69%, up from 55% over the last two years.Overall, the funds allocated 13% to domestic equities, 21% to non-domestic and 52% to fixed income.Alternatives grew to 9% while property made up 3% of allocations. However, the impact of these asset classes varied significantly across the 14 countries.Swiss funds allocated 14% of assets to real estate, while Danish funds 20% to alternatives.In comparison, French schemes only allocated 1% to each and held 22% in domestic equities.Belgium still remained the country with the highest average allocation to equity, followed by Ireland and Sweden.Norway and Germany led the way in terms of fixed income, with schemes allocating more than 65% of assets.Within alternatives, 41% of the funds had allocations to real assets, such as core property and infrastructure, with an average allocation of 6%.Growth-orientated fixed income allocations were held by 27% of schemes and mainly consisted of emerging market debt and high yield.Almost a fifth (17%) held hedge fund allocations. However, Mercer reported no fund-of-funds searches for the second year running, as schemes tire of the double-layer fee approach and allocate directly.Mercer saw a 3 percentage point increase in the proportion of schemes conducting LDI strategies from last year, but stressed this was dominated by schemes larger than €500m.Only 12% of funds said they had not considered the strategy at any level, a figure that hit 29% last year.Mercer’s European director of strategic research, Phil Edwards, said that, despite the relatively small increase in LDI use, the management of risk remained a concern for trustees.“The complexity and governance challenges around LDI may have acted as a barrier for smaller schemes in the past,” he said.“Given the range of pooled and delegated LDI approaches now available, we expect to see the gap in take-up between large and small schemes reduce over time.” The proportion of European pension funds ruling out implementing liability-driven investment (LDI) strategies has plummeted over the last year as awareness increases, research shows.Mercer’s annual European asset allocation survey found increasing allocations to matching assets, typically used in derivative-based LDI strategies.Overall, the consultant’s research, conducted across 1,200 schemes in 14 European countries, found a return towards the alternative asset class, after seeing a fall in the year previous.It also reported a slowdown in the falling exposure to equity markets, with the average allocation only falling by 1% across Europe.last_img read more

first_imgMalaysia’s Employees Provident Fund (EPF) has reported a record 58% year-on-year surge in return in the first quarter of the year, driven by equity investments.For the quarter ended 31 March, investment income reached MYR8.8bn (€2bn), compared with MYR5.6bn in the corresponding quarter in 2013.About 52% of the fund is invested in fixed income instruments, 43% in equities and the rest in money market instruments, real estate and infrastructure.Overseas exposure constitutes 21% of total investment assets. Returns from the fund’s global investments make up about 27% of all income generated.As at March 31, investment assets stood at about MYR600bn, an 11.3% increase from the year-earlier period.During the quarter under review, the fund’s equity portfolio was the biggest contributor, generating an investment income of MYR4.8bn, compared with MYR1.9bn in Q1 2013.Chief executive Datuk Shahril Ridza Ridzuan said: “High trading volume and liquidity in the equity markets, particularly global developed markets, provided us with timely opportunities to realise gains from earlier equity investments.“In addition, we benefited from a steady stream of dividends received from the listed companies we invested in.”Income from real estate and infrastructure increased by 37%, while returns from loans and bonds climbed 4%.The EPF said the marginal increase in income was primarily due to maturing investments reinvested at lower rates given the low interest rate regime.Income from Malaysian government securities and equivalents increased by 4%, while money market instruments contributed almost MYR80m in the quarter under review.Commenting on the outlook for the rest of the year, Shahril said: “Although we are optimistic the Malaysian economy will record better growth this year on expectations of export recovery supported by resilient domestic demand, we remain vigilant, particularly over the uncertainties surrounding the movements of capital as long-term interest rates adjust following recovery in key markets.”last_img read more

first_imgHe also warned that asset managers were facing increased scrutiny from regulators, as the authorities feared that some products might suggest a liquidity that did not really exist.A similar concern was voiced at the Swiss Pension Conference outside Zurich a few weeks ago.However, Joachim Fels, managing director and global economic adviser at PIMCO, warned that, while the banking system had become “much more stable” in recent years, it was now more vulnerable when it came to liquidity shocks, as banks were holding more capital in reserve.According to the results of PIMCO’s latest Secular meeting held on the long-term economic outlook each May, institutional investors are likely to continue to have to search for alternatives to traditional bonds in the years to come.PIMCO’s analysts predicted that the neutral, real base rate for government bonds in developed countries would hover around 0% over the next 3-5 years, once central banks found the “right level” to balance out investments and savings.“We have probably seen the bottom of the trough regarding interest rates in Europe now,” said Bosomworth.PIMCO’s analysts estimated that basic yield would only be increased by an inflation premium, most likely the 2% set by the European Central Bank as target inflation, and a duration premium of 0.5-1% for 10-year-bonds on average.Nevertheless, Fels said he did not anticipate a “great rotation” from bonds into equities, predicted by many in the current low-interest-rate environment.“Some investors shifted a part of their portfolios into equities, but volatility remains a problem for many,” he said.Bosomworth added that not all companies could “get money on the stock markets”, while governments had to continue to issue bonds.He pointed out that, even with low interest rates, there was still demand for government debt.Fels added: “Government bonds with low yields can be compared with an insurance premium, [where] investors pay for the low default risk.” The debate over institutional investors’ increasing role in providing finance for long-term projects has “steered in the wrong direction”, according to Andrew Bosomworth, managing director at PIMCO Germany.He said the term ‘shadow banks’, used for these investors by some critics and regulatory authorities, was an “exaggeration” and argued that institutional investors bore no resemblance to the unregulated banks for which it was coined decades ago.Austria’s finance minister recently repeated criticism voiced by the International Monetary Fund that unregulated institutional investors risked “distorting” the lending market.PIMCO’s Bosomworth, however, pointed out that, because banks could no longer provide capital on the same scale as they did before, “someone else has to step in”.last_img read more

first_imgPension funds should be able to finance UK infrastructure through a bond aimed solely at the industry and offering a yield above the prevailing market rate, Alan Rubenstein has suggested.Speaking in a personal capacity, Rubenstein, chief executive of the Pension Protection Fund (PPF), suggested the pension bond as one way to support the defined benefit (DB) industry in the UK, with assets ringfenced into a sovereign wealth fund.In a debate at the National Association of Pension Funds annual conference in Manchester, former pensions minister Steve Webb urged the industry to focus on the risk-sharing made possible by his defined ambition agenda, while Bill Galvin, chief executive of the Universities Superannuation Scheme, argued it was vital to be honest about the role played by trustees in tackling the DB challenge.Rubenstein argued that the pension bond he proposed dealt with the industry’s hunt for yield but also helped the UK government in its attempts to secure financing for infrastructure projects. “My idea is that these bonds would be long term, say 30 years,” he said.“They might be inflation-linked, or they could be fixed. But, crucially, they would pay a yield that is perhaps 1% above current – instead of 2.5%, in Gilts perhaps 3.5%.”He argued they would only be sold to pension funds, with income ring-fenced to rebuild infrastructure.“Frankly, if we can rebuild our schools, our roads, our hospitals at this kind of rate, we will be getting a good deal,” he said.“If [chancellor of the Exchequer] George Osborne really wants £20bn (€27bn) quickly for infrastructure, this would be the way to do it.”Rubenstein argued that it would help address the problem of pension scheme underfunding and held out the possibility that if deficits improved markedly, it could spell the end of the PPF levy, set at £615m for 2016-17.“I’m asking you to support pension bonds, build a better Britain and save DB pensions,” he said as he concluded his presentation.Webb struck a note of caution, however, questioning whether Rubenstein’s argument that the pension bond was in the interest of inter-generational solidarity rang true.In a good-humoured rebuttal that eventually saw Webb’s call for collective defined contribution voted the best proposal by the audience – 56.6% to Rubenstein’s 43.4% – the former MP noted that the debt incurred through the bond would need to be paid off by future generations, at a higher rate than the UK currently borrows.Webb hypothesised how a conversation on the proposed pension bonds would occur in the Treasury.“I don’t think I could go the chancellor and say ‘You know you can borrow at next to nothing at the moment, do you like to pay more for your borrowing for infrastructure?’” he said.“I don’t think I’d even get through the door. It’s a lovely idea, but it won’t happen.”last_img read more

first_imgThe asset manager owned by 32 London pension funds has hit back at reports that it advised against investing in UK infrastructure in case of a change of government.The London CIV – an asset pooling initiative for the UK capital’s local government pension schemes (LGPS) – is currently exploring how to provide its member funds with access to infrastructure, and was asked to present its work so far to the London Borough of Camden’s pension committee at a meeting on 29 November.According to a report published by the council, the London CIV said two existing options for LGPS funds to invest in infrastructure were too focused on UK assets.The Camden report said: “The CIV… believes it would be imprudent to expose the London pension funds to regulatory and political risk at a time when… UK political risk is heightened in the aftermath of the Brexit vote, and relatedly, a potential future change of government could lead to a sharp repricing of core infrastructure assets due to concerns over renationalisation and regulatory changes to existing contracts.” Subsequent UK media reports linked the comments to the rise in popularity of the Labour Party, led by Jeremy Corbyn – an advocate of public ownership of infrastructure assets.In a statement on its website, the London CIV said: “London CIV wishes to clarify that it has not issued and will not issue any advice to London boroughs about the impacts of a Labour government led by Jeremy Corbyn on any investments including infrastructure.”The London CIV’s initial research – according to Camden’s report – had ruled out investing in the Pension Infrastructure Platform because it was too small and focused solely on the UK. Another pension-fund-only vehicle, GLIL, was also ruled out as it did not have a sufficient track record and was also focused primarily on the UK. However, the CIV also highlighted low expected returns on UK infrastructure, meaning the asset class did not compensate for the political risk involved “particularly when compared to the (net) returns on similar assets overseas”. Camden’s report stated that, “as the CIV’s product suite is built out, and, if valuations become attractive, the CIV would welcome the cross-pooling approach to infrastructure in the UK”.GLIL – a joint venture between the Greater Manchester Pension Fund and the London Pensions Fund Authority with backing from three other LGPS funds – could be a future option for infrastructure investment for the CIV, the report said. One of the main reasons for the UK government’s push for LGPS pooling was to increase capacity for infrastructure investment. Camden’s £1.3bn (€1.5bn) scheme is considering a 5% allocation to the asset class.The London CIV has established a working group to assess its approach to infrastructure. Ryan Smart, infrastructure investment analyst at the CIV, has created a long list of roughly 100 managers, according to the report from Camden, as the pooling vehicle sought to provide options for the eight London boroughs actively seeking an allocation.The CIV aimed to reduce the list down to 20 and appoint an independent adviser to help select managers, Camden said.last_img read more

first_imgIn contrast, low-volatility manager Quoniam performed worst, it said.The pension fund credited its currency hedge for contributing 3.1 percentage points to its overall gain of 7.5%. The €25.5bn pension fund of Dutch banking group Rabobank has slashed its equity holdings by almost 5 percentage points in favour of government bonds and credit.In its annual report, it indicated that its decision had been triggered by the growth of its equity portfolio, which yielded 9.2% last year.It reduced its equity exposure to 38.2% at the end of 2017.Emerging markets in particular performed well, the scheme said, with asset manager Fidelity outperforming its benchmark by almost 6.7% while focusing on quality and growth. Rabobank’s headquarters in Utrecht, NetherlandsRabobank’s 40.4% fixed income allocation gained 0.2% overall, largely due to its credit holdings, which benefited from a reduced risk premium as a result of improved economic conditions, as well as the ECB’s quantitative easing programme.With a yield of 8.6%, infrastructure had performed well for the fifth consecutive year, according to the Rabobank Pensioenfonds.It cited “enthusiasm among governments embracing new projects” as well as the development of data sets and benchmarks.Rabobank has targeted a 2.5% allocation to infrastructure, which it expects to achieve by 2020.The scheme attributed the 0.2% profit from its private equity holdings predominantly to the J-curve effect of the portfolio, which is still under construction, as well as the currency effects of the US dollar.Commodities and high yield credit returned 5.9% and 6.2%, respectively.The annual report showed that residential property had significantly contributed to the 8.7% gain on the scheme’s overall property portfolio, which made up 10% of its total assets. Portfolios managed by Syntrus Achmea Real Estate & Finance and Bouwinvest Residential Fund delivered 19.5% and 15.6%, respectively.It added that it wanted to make 15% of its residential property energy-neutral by 2030.The Rabobank scheme also reported that it had divested its Dutch office and retail holdings, and that it was planning to gradually sell out of its international funds.The pension fund said its sponsoring employer had made an additional contribution of €160m to guarantee that annual pensions accrual could be maintained at 2%, as a consequence of an agreement with the trade unions when it switched to collective defined contribution arrangements in 2013.It granted its participants a 0.2% indexation last month. At June-end, its coverage ratio stood at 117.7%.Last year, the scheme saw a sharp decrease of the number of active members, which dropped by 4,600 to 27,924 in the wake of reshuffles within the business.As a result of the falling number of contributing employees, administration costs rose from €236 to €241 per participant and the number of pensioners’ representatives on the board and the accountability body had increased relative to workers’ delegates, the scheme said.last_img read more

first_imgWouter Koolmees, social affairs ministerDuring the parliamentary debate, the Christian Democrats (CDA), the opposition left-wing green party GroenLinks, labour party PvdA and religious right-wing party SGP collectively filed a motion calling for the government to assess how healthy life expectancy was developing.They also asked for alternative options for linking retirement and life expectancy, as well as how to finance them.Prime minister Rutte said that discussions were not dead, but didn’t make clear how the process of pensions reform should be continued.Wouter Koolmees, minister for social affairs, said the government would assess the situation and he would inform parliament of further developments in January. Without agreement between the social partners on reform, cuts to pension payments remain possible for some schemes from 2020.Both the party for the elderly, 50Plus, and GroenLinks announced that they would table bill to allow for a longer recovery period for pension funds, to provide the social partners additional leeway for drawing up a new reform plan. The Dutch government must slow down the rate at which it plans to increase the state pension age, politicians have argued.During a debate in parliament yesterday about the collapse of the negotiations around a new pensions agreement, all political parties concluded that the plan to raise the official retirement age in line with longevity from 2022 was not tenable.Under the current arrangements, the retirement age for the Netherlands’ state pension – the AOW – is to rise from 65 in 2017 to 67 and three months in 2022. It will subsequently increase by one year for every year of additional improvement in life expectancy.However, linking the AOW age to life expectancy angered trade unions, which argued that this would be too fast for workers in hard physical jobs. They have lobbied to freeze the AOW age at 66. Dutch prime minister Mark Rutte, while acknowledging the overwhelming demand from political parties, contended that only a new government could alter the disputed policy.center_img Mark Rutte: Changing state pension policy would be too expensive“It would be too expensive and would cause a large shift on the budget that could only be agreed during the formation of a new government,” he said.Rutte suggested that, during the recent negotiations, the cabinet had offered what unions and employers had drawn up in a draft agreement that leaked to the press in May.The draft agreement at the time indicated that the social partners had opted for collective pension arrangements, offering fewer guarantees than the current DB plans but with more scope for indexation. However, it did not mention the unions’ demands related to AOW, the discount rate for liabilities, or pensions for self-employed workers.Academics back up union concernsSeparately from the political debate, several experts on ageing have concluded that a solution must be found for workers in physically demanding jobs, as they were likely to experience fewer years of healthy retirement than those with other kinds of jobs.At a meeting of pensions think-tank Netspar in Rotterdam, academics presented surveys showing that the difference in life expectancy between lower and higher educated workers was increasing.“The question is whether the current rise of the state pension age is fair in this context,” said Dorly Deeg, professor of epidemiology and ageing at VUmc in Amsterdam.She added that an increasing number of people aged between 65 and 75 were suffering from at least two chronic illnesses.“The uniform rise of the AOW age is at odds with the consistent difference of life expectancy and healthy longevity between the lower and higher educated,” said Wilma Nusselder, senior researcher at Rotterdam’s Erasmus Medical Centre.Several presentations highlighted that less educated people not only faced a lower life expectancy, but also usually lacked the financial means to retire earlier. Nusselder noted that the difference between lower and higher educated workers had also been observed in other countries.Joop de Beer, researcher at the Dutch Demographic Institute (Nidi), suggested that the AOW age should rise by one month per year in order to prevent a continuing discussion on the issue.Politicians demand more informationlast_img read more

first_imgBefore MN, Cartigny worked in various investment roles at ABN AMRO Asset Management. He currently also serves as a board member of DUFAS, the Dutch fund association, and as vice chairman of the Institutional Investors Group on Climate Change.  Vækstfonden — The DKK9.6bn (€1.3bn) Danish Growth Fund has appointed Rolf Kjærgaard as its new chief executive. He was previously the state financing fund’s CIO and, as of 2 July, has replaced its most recent chief executive Christian Motzfeldt, who announced in February he wanted to step down after working for the fund for 18 years.Kjærgaard has worked at Vækstfonden for almost 18 years, as CIO for the last four. Prior to this, his professional roles included that of national expert for the EU Commission and special consultant for the Danish Ministry of Industry, Business and Financial Affairs.State Street Corporation – Jörg Ambrosius has been promoted to head of the asset manager’s UK, Europe, Middle East and Africa business, succeeding Liz Nolan, who earlier this year became head of State Street’s global delivery team. Ambrosius was most recently co-head of State Street’s global services business in EMEA and head of its global sovereign wealth servicing business. In his new role he will also serve on the asset manager’s management committee. Ontario Teachers’ Pension Plan – Jo Taylor has been named the Canadian pension fund’s new president and CEO, effective 1 January next year. Currently executive managing director, global development, he will succeed Ron Mock, who retires at the end of 2019 after almost two decades at the now $191bn (€167bn) pension fund.Taylor joined Ontario Teachers’ in 2012, and in his current role is responsible for overseeing the investment teams operating in its international offices, setting strategy, and reviewing investment proposals, among other tasks.Dalriada Trustees – Judith Fish, formerly head of pension risk at Santander UK, has joined the firm as a professional trustee. Fish left Santander at the end of June and has previously also worked at HSBC Actuaries and Consultants, which was acquired by JLT, and Deloitte. She has more than 25 years of experience in pensions, serving as a trustee, scheme actuary, corporate adviser and employer.Insight Investment  – Andrew Stephens is the asset manager’s new head of distribution for EMEA. He joined from BlackRock, where he spent 19 years, most recently as head of UK institutional client business.Gresham House – The specialist alternative asset manager has hired Catriona Buckley as institutional business development director. She joined from Fidelity International, where she was responsible for manager research and field consultant engagement with global and domestic investment consultants in the UK, and for direct client relationships in Ireland. Before joining Fidelity she was client director at Pioneer Investments, now Amundi.  Osmosis Investment Management – The sustainable investment specialist has announced three new appointments, including Anthony Chisnall as product distribution manager and Susan Hunnisett as a new member of the investor relations team, with a focus on European business development. Chisnall’s previous roles include head of marketing and investor relations for Gulf International Bank Asset Management while Hunnisett worked for European equities specialist SW Mitchell Capital before joining Osmosis.Global Reporting Initiative (GRI) –  An organisation providing a framework for sustainability reporting, GRI has recruited Marco van der Ree for the new position of chief development officer, which he will take up on 15 July. According to the GRI, he will lead work to diversify and implement the organisation’s fundraising strategy and oversee outreach to institutional, foundation and public donors. Van der Ree was previously director for  business development and fundraising for the European Institute of Innovation and Technology’s Climate Knowledge Innovation Community. Swiss Life Asset Managers  – Nelufer Ansari has been named head of ESG, a new role in which she will be responsible for extending the company’s sustainable investment approach to all asset classes and countries in which it operates. She will assume the task in her role as head of strategic and special tasks, which she has held since March, and will also be responsible for developing a cross-border ESG strategy spanning all products for the manager. Ansari started her career at BEOS, which has been part of Swiss Life Asset Managers since 2018. MN, GSAM, Vækstfonden, State Street, Ontario Teachers’, Dalriada Trustees, Insight Investment, Gresham House, Osmosis IM, GRI, Swiss Life Asset ManagersGoldman Sachs Asset Management (GSAM) – Gerald Cartigny is set to leave MN, the €135bn asset manager for Dutch sector pension schemes PMT and PME, to become head of GSAM’s client business in Belgium, the Netherlands and Luxembourg as of the beginning of October.Cartigny will have spent seven years at MN, becoming its chief investment officer in 2014. In a statement about his time at MN, Cartigny highlighted the manager’s work on socially responsible investing, saying that this had been fully integrated into the investment approach and that MN was “internationally recognised as a leader in ESG integration”.At MN Cartigny also oversaw the merger of its individual asset management and fiduciary management groups into a single unit.  last_img read more

first_imgLocated 90km north of Brisbane on the Sunshine Coast, construction has just kicked off at Caloundra Cay. When complete, the resort will comprise 270 single and double-storey homes, with 13 different home designs, all named after island locations. The first residents will be welcomed in September 2018.Ms Baldwin said tropical-themed resorts could be found everywhere but there was nothing quite like Caloundra Cay. CARIBBEAN DREAM: Located 90km north of Brisbane on the Sunshine Coast, construction has just kicked off at Caloundra Cay.Construction has started on the Sunshine Coast’s latest retirement living offering for the over 50s.Palm Lake Resort’s latest offering, Caloundra Cay, will be a high-end, Caribbean-themed resort. Think tropical island resort pools complete with swim-up cocktail bar and sunken fire pit.This is not the tropical experience you might think. Palm Lake Resort regional sales manager Brittany Baldwin said instead of Balinese and Asian influences, Palm Lake Resort looked further afield for unique inspiration – all the way to the cool Caribbean. “Think colonial plantation homes, British imperialism and island textures,” Ms Baldwin said. The proposed Caloundra Clay club house.“This is Hemingway meets Ralph Lauren and India Hicks.“Even the name is exotic.More from newsParks and wildlife the new lust-haves post coronavirus17 hours agoNoosa’s best beachfront penthouse is about to hit the market17 hours ago“Caloundra Cay (pronounced key) conjures visions of impossibly white coral reefs and sand islands of the Caribbean, speckled like jewels in the azure ocean, with palm-fronded interiors.” >>FOLLOW EMILY BLACK ON FACEBOOK<< center_img When complete, the resort will comprise 270 single- and double-storey homes, with 13 different home designs, all named after island locations.“Our combined design teams spent months researching and defining the right influences,” she said.“The heart of our resort will be our world-class country club, in the grand tradition of colonial West Indies architecture.“A mix of island stone, heavy timber, rich leather and rattan, this club will be unlike anything seen before in an over-50s resort.”As well as a swim-up pool bar and firepit, the resort would feature indoor and outdoor swimming pools, tenpin bowling alley, luxury cinema, tennis courts, Milon gym, an eight-rink undercover lawn bowls green, library, arts and craft room, dance floor, virtual golf simulator and woodworking room.last_img read more

first_imgSeventy potential buyers checked out 95 Sinnamon Rd, Sinnamon Park.The renovated five-bedroom house in Windermere Estate had two registered bidders and was passed in at $980,000.More from newsDigital inspection tool proves a property boon for REA website3 Apr 2020The Camira homestead where kids roamed free28 May 2019NGU Real Estate agents Emil Juresic and Nhan Tran worked with one of the auction bidders for three weeks to secure the sale at $985,000 as a cash unconditional offer. It turns out the gavel wasn’t the best way to sell this stunning home with its roomy tool shed, luckily, it wasn’t the only tool in the shed.A THREE week negotiation has secured the sale of 95 Sinnamon Rd, Sinnamon Park, after it was passed in at auction. SEE WHAT ELSE IS FOR SALE IN SINNAMON PARK There are tools in this room too, but some rooms don’t need to brag.Seventy parties went through the property prior to auction including three interstate buyers.“The buyers put their offer in after the auction and then it took three weeks to sell,’’ Mr Tran said.CoreLogic data shows the median house price in Sinnamon Park is $732,500, a 4.8 per cent increase in the three months to August.center_img The suburb is split into the Windermere and Edenbrooke estates where properties can sell for well over $1 million, and the more established areas where houses can still be found in the $500,000s to $700,000s.“There are determined buyers in the market,” Mr Tran said.“Certain properties are taking longer to sell but if you have the right buyer you’ll sell.” <<>>last_img read more