first_img“Infrastructure is an increasingly important asset class in portfolios, with its attributes for matching long-term liabilities particularly compelling,” he added.The £45m mandate will see a significant increase in the City of London Corporation Pension Fund’s infrastructure exposure.According to its 2011-12 annual report, it had combined private equity and infrastructure holdings of only £8.6m at the end of March last year, accounting for just over 1% of the fund’s £614m total portfolio.Annabel Wiscarson, executive director for business development at IFM Investors, said the firm would remain focused on European and North American projects.She also said she viewed the establishment of the Pensions Infrastructure Platform, the vehicle under development by the National Association of Pension Funds (NAPF) and Pension Protection Fund (PPF), as “complementary” to the approach taken by IFM.“Obviously, we’ve known about the PIP now for a year and a half or so, and all we keep seeing is them having a very similar philosophy to us – long-term ownership of infrastructure, conservative gearing,” she told IPE.“So, if anything, we are very happy to align ourselves with the PIP because it’s exactly how we started and how we continue to invest in infrastructure. We’ll be complementary with them.”PPF chief executive Alan Rubenstein recently said the PIP’s founding investors had shown a “willingness”, and the NAPF’s head Joanne Segars said she expected the fund to launch by the end of the year. The City of London is set to grow its infrastructure exposure, awarding Australia’s IFM a £45m (€53m) mandate to be split between the £720m local authority’s pension fund and a maintenance trust.IFM, jointly owned by 30 Australian Superannuation funds, will invest the mandate in core equity infrastructure holdings on behalf of both the pension fund and the local authority’s £470m Bridge House Estates, used to pay for the maintenance of local bridges.They previously won a £35m mandate from the Leicestershire County Council Pension Fund.Paul Mathews, corporate treasurer at the City of London Corporation, welcomed the ability to invest in a pre-existing portfolio of cash-generating assets based partially in the UK.last_img read more


first_imgThe Pensions Trust has therefore updated its Statement of Investment Principles and voting and engagement policy to make reference to climate change risks.It will also incorporate climate change risk analysis and reporting requirements into new mandates where appropriate and make sure this is part of the discussion during manager update meetings.The third part of its policy is about actively engaging with the wider investment community and policymakers on climate change.As part of this, The Pensions Trust – which has been a signatory to the UN-backed Principles for Responsible Investment (PRI) since May 2010 – has decided to become a member of the Institutional Investors Group on Climate Change (IIGCC).The pension scheme received an A rating in the Asset Owners Disclosure Project (AODP) survey 2013-14 on the management of climate change risks and opportunities for pension and superannuation funds.The Pensions Trust now ranks 17 out of 458 asset owners on the Asset Owners Disclosure Project’s list of top-rated asset owners, up from 92, a C rating in 2012.The top-rated asset owners are those that score AAA to A.Stephen Nichols, chief executive of The Pensions Trust, said: “The Pensions Trust is thrilled to receive an A rating in the AODP survey. The potential impact of climate change is a key focus area for the Trust, and this achievement recognises the work being undertaken to ensure regulatory risks from climate change are considered in investment decisions, and further reinforces the Trust’s commitment to being a responsible investor.” In other news, European investors worth €7.5trn have urged policymakers to act quickly on climate proposals by the European Commission (EC).Stephanie Pfeifer, chief executive of the IIGCC, said about the publication of the EC’s 2030 energy and climate proposals: “[The] proposals are an important first step to restoring investor confidence in the EU’s vision for a low-carbon energy future. A 40% emissions reduction target is the minimum necessary to keep Europe on course for a low-carbon economy, as outlined in the EU’s 2050 Roadmap. Achieving this target is well within member state capabilities and crucial for long-term policy certainty.”Pfeifer said plans for reform of the Emissions Trading Scheme (ETS) had been long awaited and that the establishment of a reserve mechanism that could support a strong carbon price was a welcome move. However, she said investors would like more clarity on how this reserve mechanism would bring about a meaningful carbon price over the long term.She added: “A well-functioning ETS, which puts a high and stable price on carbon, is critical to delivering investment in low-carbon and renewable technologies. The separate target for renewable energy must therefore be designed so it complements the broader mix of EU climate policies. National governments will now discuss these proposals ahead of a meeting of leaders in March.“Investors need policy fixed for the long term to plan multi-decade energy investments. The longer policy is delayed, the more severe Europe’s energy investment challenge becomes. Policymakers should act with urgency and waste no time in turning these proposals into legislative reality.”Lastly, a survey by extra-financial analysis provider Vigeo on governance structures and corporate responsibility has found significant differences between countries and sectors.European companies are most advanced regarding the supervision of corporate responsibility by their board of directors and within their audit and control systems, according to the study, while North American companies are more advanced in the integration of corporate responsibility criteria within their executives’ remuneration.Companies operating in highly regulated contexts, or in sectors exposed to stakeholder scrutiny, are those that strive most to demonstrate corporate responsibility is actively supported by their directors.Vigeo’s study provides a list of companies whose governance structure is more advanced in the leadership and control of corporate responsibility processes. Fouad Benseddik, director of methodology and institutional relationships at Vigeo, said: “Although much remains to be done, innovative practices identified by Vigeo show that tools and processes exist that will facilitate the implementation of corporate governance.”Vigeo carried out the study based on the assumption that corporate responsibility is more credible if supervised by a governance structure.Within the study, the supervision by the board of directors, the perimeters of the audit and internal control and the inclusion of corporate responsibility criteria in executive remuneration are compared between regions and sectors.The survey was based on its rating of 1,223 companies listed in North America, Asia and Europe. The £5.7bn (€6.9bn) UK occupational pension fund The Pensions Trust has announced it has adopted a climate change policy to help ensure climate change risk is explicitly considered throughout the investment process.Its policy is firstly about understanding how exposed its portfolio is to climate change. This will include a review of its portfolio to understand where there might be value at risk, which will be used to inform its future investment strategy.The second part of its policy is about making sure new and existing investments are managed in way that takes account of climate change risks.last_img read more


first_imgAmundi – Peter Brackett has been appointed head of global consultant relations for the French asset manager. Brackett joins the firm from American Century Investments, where he helped build the UK institutional business. He also held similar roles at Morgan Stanley Investment Management, and was previously an investment consultant at Aon Hewitt. He will be based in London and will look to develop Amundi’s reputation among consulting firms.IFM Investors – John Carey has been appointed as investment director for European infrastructure debt at the Australian firm’s London office. Carey will be responsible for the origination, analysis and execution of debt investments made in the UK and Europe. He joins from Moody’s, where he was a senior analyst in infrastructure finance. He also has experience with Barclays, in infrastructure finance, and KPMG.GAM – Gary Singleterry and Tom Mansley are set to join the Swiss asset management group after it acquired Singleterry Mansley Asset Management, of which they were principals. Alongside the founders, the entire investment team will also transfer across to GAM. The pair founded their firm in 2002, which has AUM of around $400m (€294m). Its consolidation into GAM is expected to complete later this month. Vervoer, De Eendragt, KPMG, Amundi, IFM Investors, GAMVervoer – The €15.8bn pension fund for private road transport in the Netherlands, has appointed Marjolein Sol as its new CIO, effective 1 August. Sol is to succeed Patrick Groenendijk, who recently started as practice leader at Northern Trust’s Chicago-based fiduciary management team. From 2012 to 2013, Sol was a board member at Mercurius, the pension fund for financial services – including communications watchdog AFM and Euronext – which is currently in the process of liquidation. Before then, she was CIO at Syntrus Achmea Asset Management and senior adviser at insurer Achmea. Vervoer’s new CIO has also been business leader for IC Benelux at consultant Mercer, director of fixed income and equities at the €158bn asset manager PGGM and head of credit derivatives at Rabobank.De Eendragt – Philip Menco has left as director of the €1.5bn life insurer and pensions provider De Eendragt Pensioen. He has been succeeded by Albert Bakker, a former interim manager and senior programme manager at insurer Achmea. Menco is still deciding on his next opportunity, he said. At the same time, André van Vliet has succeeded Tom Nieuwenhuizen as CFO at De Eendragt. Nieuwenhuizen is to fully focus on the company’s clients.KPMG – Julie Patterson is to join the global accountancy and consultancy firm as a director in its European financial services regulatory centre, covering the investment management industry. Patterson is known for her prior position at the Investment Management Association, where she was director of regulatory affairs for investment funds and retail. Patterson spent 15 years at the IMA before deciding to join KPMG, representing fund managers through a raft of new regulatory changes.last_img read more


first_imgAlongside Ivascyn’s promotion to CIO, the firm announced a slight restructure to its investment board, which was initially arranged after the departure of Gross’s heir-apparent and then chief executive Mohammed El-Erian.In a turbulent year for PIMCO, El-Erian unexpectedly left the firm in January, without reason, leading to a reshuffle at the top with Gross remaining as CIO but supported by several deputies to mitigate what the firm described as “key-man risk”.Since El-Erian’s departure, the firm and Gross’s flagship Total Return Fund suffered significant outflows.Now that Gross has the left the firm he founded in 1971, Andrew Balls is now global CIO, Mark Kiesel CIO of global credit, Virginie Maisonneuve CIO of equities, Scott Mather CIO of US core strategies and Mihir Worah CIO of real return and asset allocation.Douglas Hodge and Lew Jacobs remain as chief executive and president, respectively.Mather, Kiesel and Worah will now be portfolio managers for Gross’s former Total Return Fund, where he managed more than $200bn (€158bn) in assets.Saumul Parikh and Mohsen Fahmi join Ivascyn as managers for the Unconstrained Bond Fund.PIMCO said all changes were effective immediately as Gross begins his new role with Janus later today.Chief executive Hodge said the succession plan has been in development for some time to help create a seamless transition in the portfolio management team, and they are a continuation of the plan set out after El-Erian’s departure.“We have passed the torch of leadership to a team of investors who are among the very best in the investment management industry,” he said.“[The appointments] reflect our long-held belief that the best approach for PIMCO’s clients and our firm is to evolve our investment leadership structure to a team of seasoned, highly skilled investors overseeing all areas of PIMCO’s investment activities.”Gross sold PIMCO to the Allianz Group in 2000.Chief executive of the German insurer, Michael Diekmann, wished Gross the best of luck and affirmed its commitment to PIMCO’s leadership team.“We join our PIMCO colleagues in recognising Bill Gross for his accomplishments over the 43 years since PIMCO’s founding” he said.“The management and investment structure put in place in January, as well as the thorough succession planning, gives us complete confidence in PIMCO’s investment and executive leadership team.”Gross will start at Janus today and then take the reins of the recently launched Janus Global Unconstrained Bond Fund and its related offshore fund, to be launched soon.Based in a new Janus office to be set up in Newport Beach, California, Gross will be responsible for the company’s global macro fixed income strategies.This will be separate but complementary to Janus’s existing credit-based fixed income platform, which has been built up under Gibson Smith, the company’s fixed income CIO. PIMCO, the US bond house, has moved quickly to quash market concerns after replacing outgoing CIO Bill Gross with Daniel Ivascyn.Gross announced last week he was leaving PIMCO to join rival California-based asset manager Janus Capital Management, starting today, and leading an unconstrained bond portfolio next week.Market reaction was severe as the share price of PIMCO’s German parent, Allianz, plummeted, knocking billions off the insurance giant’s value.In reverse, the share price for Janus Capital Management soared by 30% as investors anticipated Gross’s move would lead to significant inflows for the asset manager.last_img read more


first_imgThreadneedle Investments is set to rebrand its organisation in the coming months to strengthen ties with its US affiliate, Columbia Management.According to Threadneedle, the new brand, Columbia Threadneedle Investments, will allow the companies to take a larger share of growth in the asset management industry, while offering clients access to both organisations.Both managers are currently owned by Ameriprise Financial.It is also expected to allow the firms to strengthen business models in the Asia Pacific, Latin America and the Middle East. The pair have around $505bn (€427bn) in assets under management (AUM), with the US-based Columbia accounting for around 70% of assets.Despite the new brand, the company said the investment strategies, philosophies and processes of both firms would not change.Threadneedle chief executive Campbell Fleming said: “Under the new brand, we become a global group, presenting our combined resources, investment perspectives and expertise.”Elsewhere, UK defined benefit (DB) pension fund investments returned an average of 11% over the course of 2014, according to State Street Investment Analytics (SSIA).It said this was the third consecutive year of strong investment results for DB schemes, but the latest set of results saw greater focus on fixed income holdings.“In the two preceding years, a high equity allocation was beneficial, but in 2014, it was funds that held a relatively high proportion of their investments in bonds that will have performed best,” SSIA said.Average exposure to equities fell to 43%, while SSIA said bond markets went from steadily positive performance to surging in August, as the Bank of England committed to low interest rates.UK index-linked bonds returned 20%, despite falling inflation, while UK Gilts also provided a boost, with the average fund returning 18%.“This reflects the relatively high weighting amongst pension funds of longer-dated Gilts,” SSIA said.“The FTSE 15 Year Index returned a remarkable 26%. While the strong results from bonds were positive for the asset valuations of pension funds, they had the opposite effect on the liabilities, as yields fell by almost a third from this time last year.”UK equities returned just over 1% over 2014 after a late rally in values, with European equities providing flat returns.last_img read more


first_imgLocal council pension funds from London and Manchester have created a £500m (€654m) investment vehicle for infrastructure and alternative assets, amid increasing collaboration between London and Northwest England.The special purpose vehicle will be jointly owned by the Greater Manchester Pension Fund (GMPF) and the London Pension Fund Authority (LPFA) and look to boost the funds’ below-benchmark allocations to alternatives.The £13bn GMPF invests £130m in the asset class, around £260m below its target allocation, while the £4.9bn LFPA currently allocates £170m (3%).Both pension funds will put £250m into the fund, which they said would have a fairly liberal definition of infrastructure, including property, utilities, listed infrastructure and core and non-core assets. The co-owned vehicle will see the funds analyse opportunities and make investment decisions jointly using pre-existing internal capabilities and expertise.Councillor Kieran Quinn, chair of the GMPF, said his fund had been doing deals on a smaller scale for two decades and that investors felt able to approach it with opportunities.“What is different about this fund is it takes away one of the constraints to [investing in infrastructure],” he said.“When the chancellor goes seeking resources to invest in UK plc, he rarely knocks on pension funds’ doors. So what we are trying to say here is that we can do things differently and scale up the opportunities.”Chief executive of the LPFA, Susan Martin, said the vehicle would be able to seek out appropriate risk/return investment opportunities using the shared resources of the funds.“£500m is a game-changing amount,” she said. “Both funds already have opportunities brought them, so we can share that deal flow and assess it without resources. I would imagine we would get more interest, and be more attractive, working together.”The vehicle will look to make investments over the next four years, with a Manchester and London focus, but assessing all viable opportunities.Quinn added: “There are some bigger transnational schemes we think we can assist with.“It is about being able to knock on the door. Some say you cannot knock on the door with £500m, but we are saying we have the resources to start ensuring people look to us for solutions.“That might be about creating a larger entity by encouraging other pension funds to come forward and join us.”GMPF neighbour, the Lancashire County Pension Fund, and the LPFA also recently announced an asset-liability management partnership, creating a £10bn investment fund.This will see the two pension funds pool assets and jointly manage liabilities while merging governance and administration.Martin said the entirely separate arrangement with Lancashire was significantly more complicated than the infrastructure fund.“As part of the pooling of the assets [with Lancashire], the LPFA and GMPF tie-up will come through the asset-liability management,” she said. “But they will be separate organisations.The LPFA was originally one of 10 founding members of a similar fund led by the Pension Protection Fund (PPF) and the National Association of Pension Funds (NAPF).However, the London fund left the Pensions Infrastructure Platform (PIP) citing cost issues and expected risk/return profiles.The BAE Pension Fund and the BT Pension Scheme also left for similar reasons.“This is different in many ways to the PIP, as it is not setting up and resourcing a new company,” Martin said.“It is taking current expertise and doing things direct and as co-investment. The risk/return is slightly different.”The LPFA, GMPF and Lancashire all advocated greater collaboration between local government pension schemes (LGPS) in a recent government consultation.The UK government is expected to shortly announce its decision on whether to mandate LGPS funds to passively invest all listed assets using collective investment vehicles.Quinn added: “The challenge that was set by government was collaboration, and how we have met that is by making that significant statement that we are up for this.”last_img read more


first_imgGermany’s ministry for labour and social affairs (BMAS) is considering a relaxation the minimum guarantee offered by Pensionsfonds.In a letter to stakeholders, BMAS proposed changes that would allow greater flexibility for the pension payout phase.Another proposal currently being discussed would allow certain employees to opt out of the protection offered by the insolvency fund PSV.In Germany, defined contribution (DC) funds have to be set up with a minimum guarantee, or Beitragszusage mit Mindestleistung, and if a Pensionsfonds is used as a vehicle the pay-out phase has to contain an insurance element. At present, Pensionsfonds are hardly used upon retirement, but rather as a financing instrument for pension pay-outs.The new proposal by the BMAS aims to change the norm by allowing the application of a 0% discount rate on all pensioners’ assets in Pensionsfonds.Employers would only be required to top up assets if returns fell below the minimum discount rate of 0%.Thomas Jasper, head of retirement at Towers Watson in Germany commented: “As stated in the proposal, this [approach] can really help Pensionsfonds to increase efficiencies and opportunities in the asset allocation and with it the chances of a higher pension for members.”The new law would allow Pensionsfonds to make full use of the regulatory freedoms in asset allocation which they can currently only apply to active members’ assets.Stephan Hebel, from the pensions department at Mercer in Germany also welcomed the proposal. “This is also a chance for employers to allow Pensionsfonds to try and generate higher pensions without a higher risk of top-ups.”He added the proposal was a “sensible evolution of the Pensionsfonds”, which was hindered in its development by the current regulation.Jasper was also convinced the change would be a “major step towards increasing the attractiveness of the Pensionsfonds”.A third expert did not want to go on the record before the end of the consultation phase on the new proposal on 10 September.She pointed out the proposal would only change the supervisory framework but not the legislation regarding workers’ rights:“Volatile pension pay-outs are something very unusual for Germany,” she stressed.On the other hand she noted the new regulation would allow Pensionsfonds to have one portfolio both for active as well as retired members.This would help save costs, also because providers would not have to hire an insurer to handle its payout phase.Hebel saw the proposal as part of the preparations for new industry-wide pension plans proposed by social minister Andrea Nahles earlier this year.Nahles has encouraged employers and employees to set up Pensionsfonds or Pensionskassen to create industry-wide pension plans with only minimal guarantees. The second part of the proposal by the BMAS would allow workers to individually opt out of PSV-protection if their employer went insolvent.“This makes sense in cases where the pension promise is already fully insured by a reinsurer, maybe if it is an old contract with interest rates of up to 4%,” Hebel pointed out.It would also help the PSV lower its admin costs by not having to take on members covered by a reinsurer’s contract.The experts all stress it was currenty unclear when the new proposals would be implemented.Some have speculated the changes could be integrated into the revised supervisory regulations brought about by the implementation of the portability directive and scheduled for this autumn.last_img read more


first_imgUnipension said: “The pension funds’ solvency continues to be very good, which gives them the opportunity to maintain their investment strategy in spite of the turbulence on investment markets in recent weeks.”In the first half, markets had been characterised by a moderate rise in global equities markets, while yields on Danish and German government bonds had generally fallen in the first quarter, but then risen strongly in most of the second quarter, Unipension said.All three pension funds had seen a rise in contributions in the six-month period.AP’s overall contributions grew to DKK157.4m (€21.1m) in the first half, up DKK7.8m or 5.2% from the same period last year, while MP Pension’s contributions were up DKK75m or 4.2% at DKK1.86bn.PJD saw its contributions grow DKK6.8m or 3.8% to DKK183.1m.Active membership at the pension funds grew by 1.7%, 2.2% and 1.0% respectively, according to the funds’ annual reports Investment returns at the three professional pension funds run by Denmark’s Unipension slipped lower in the first half of this year, but the provider was able to maintain its investment strategy due to its stable solvency position.Reporting results for the six months from January to June, Unipension said the Architects’ Pension Fund (AP) made a 4.4% return on investments before tax between January and June this year, while MP Pension, which covers academics in Denmark, produced 4.2%.Meanwhile, the Pension Fund for Agricultural Academics and Veterinary Surgeons (PJD) returned 4.5%.The returns compare with the first half of 2014, when the pension funds produced 6.1%, 6.3% and 6.4%, respectively.last_img read more


first_imgSPF, the €14.5bn pension fund for the Dutch railways sector, is to introduce three variants for accrual in a bid to keep pensions provision affordable for each of its 69 participating companies.It said companies would be given the choice between different accruals against different contributions within its collective defined contribution arrangements.The three alternatives are SPF’s response to the increasing price of pensions arising from low interest rates, as well as the accounting rules of the new financial assessment framework (nFTK) and the ultimate forward rate (UFR) as part of the discounting mechanism for liabilities.The most generous option offers an annual pensions accrual of 1.875% against a contribution of 24% and a franchise – the amount exempt from both pensions accrual and premium payment – of €12,642. Both other alternatives provide for an accrual rate of 1.563% against a 20% premium but under franchises of €12,642 and €13,545, respectively. Currently, SPF charges all participating employers a uniform contribution of 20% for an annual accrual of 1.875% and against a franchise of €13,449.The new rules are set for the next five years, but the social partners have decided that the accrual rate could be adjusted earlier – due to changing interest rates, for example.SPF said it would also adhere to new rules for indexation allowing for part or full inflation compensation if funding is at least 110% or 124.5%, respectively. As of the end of October, SPF’s coverage ratio was 109.9%.As a consequence, the scheme said, participants cannot expect full indexation for the foreseeable future.The social partners in the railways industry have agreed that any future rights cuts will be no more than 1.5% per annum. SPF has 72,275 participants in total, with more than 29,000 active workers and 25,290 pensioners.Recently, the €5bn pension fund PNO Media announced that it would introduce a contribution based on the age of a company’s staff, rather than charge an average premium, with the view to becoming more attractive as a pensions provider.For the same reason, it will also add defined contribution arrangements to its existing defined benefits plans.last_img read more


first_imgAccording to search QN-2219, the asset owner is “benchmark agnostic but will either use S&P/TSX/MSCI World” or a combination of these.It is looking for an investment process that actively integrates environmental, social and governance considerations – with an environmental focus.Applicants should also have “an advanced process” for shareholder stewardship activities, such as voting and shareholder engagement.Interested parties should have at least $1bn in assets under management in all/large-cap equities and a track record of at least three years.Applicants should state performance, gross of fees, to the end of June.The currency preference is for Canadian dollars, but the investor will consider other currencies “with the proper risk oversight”.The deadline for applications is 23 September. The IPE news team is unable to answer any further questions about IPE Quest tender notices to protect the interests of clients conducting the search. To obtain information direct from IPE Quest, please contact Jayna Vishram on +44 (0) 20 7261 4630 or email [email protected] Canadian investment consultancy Proteus Performance Management has put out to tender a $10m (€8.9bn) diversified equity mandate for a Canadian asset owner, using IPE Quest.The asset owner is seeking proposals for equity pooled fund-management services for Canadian and global equities.It is aiming to hire at least one provider to manage a portion of its equities.The management can be active or passive.last_img read more