Month: September 2020

first_imgAP7 operates as a state-owned alternative to the private investment funds in Sweden’s first-pillar premium pension system.Its Såfa fund has 3m customers, and is composed of AP7’s “building-block” equity and fixed income funds, with the proportions depending on customer age profiles.AP7’s net profit dipped slightly to SEK63.26m in 2013 from SEK64m.Its equity fund generated an investment return of 34% in 2013, up from 18.5% in 2012.In absolute terms, the fund ended the year with a profit of SEK41.99m, up from the previous year’s SEK18.01m.Total assets rose to SEK173.5bn from SEK123.3bn.The bond portfolio, meanwhile, produced a total return of 1.8% in 2013, which AP7 described as a positive result given that market yields had fallen over the year.Last year, the bond fund returned 2.8%.In absolute terms, the bond fund made a profit of SEK160,195, compared with SEK187,155 the year before.Total assets in the bond fund rose to SEK12.69bn from SEK8.87bn. Sweden’s seventh AP fund (AP7) has said it produced a 32% return for savers in its balanced Såfa pension fund, which it said beat the average return of 16% of competitor funds in the premium pension system.Richard Gröttheim, deputy director at AP7, said: “The fact Såfa did so well is down to the large equity exposure.”Leverage also provided an extra boost that was hard to beat in the good times, he said.Fees have been cut for the second year in a row, he said, falling to 0.12% as of 1 January, from 0.14% in the equity fund and to 0.05% from 0.08% for the fixed income fund, he said.last_img read more

first_imgAt the same time, the project meets the demands the pension fund made of its real estate investments, he said.He said it was a high-quality construction in an attractive location with a good tenant on a long lease.The new property is part of the new Esbjerg Strand project, where many other businesses would build their offices.Work is scheduled to start in June this year, and the building ready for occupation by January 2016.PensionDanmark is also investing DKK126m to build a new office for Alfa Laval in the city of Aalborg.PensionDanmark said this would be its first real estate investment in Aalborg and would supplement its existing holdings, which were spread geographically in the Copenhagen area, Aarhus, Odense and the Triangle Region (Trekantområdet) of east Jutland.Construction is set to start this month, with the building scheduled to be ready for occupation in April 2015.PensionDanmark said it had already invested more than DKK12bn in Danish commercial and residential property and aimed to invest a further DKK2bn a year in property in the next few years. Labour-market scheme PensionDanmark is investing DKK381m (€51m) in two office building projects in Jutland.The pension fund said it was putting DKK255m into constructing a new headquarters for engineering firm Semco Maritime in Esbjerg.PensionDanmark said this was its first real estate investment in the west Jutland port.Torben Möger Pedersen, the pension fund’s managing director, said: “With the Semco Maritime headquarters, we are spreading our property portfolio more broadly.”last_img read more

first_imgIts €1bn in equities produced 3%, while unlisted holdings returned 6.4% and real estate 9.9%.The R1 fund, with close to €1.6bn in assets, found less success with its bond holdings.The €1.2bn allocation returned 0.88% through to December 2013, as the overall portfolio provided 5.8%.Its €195m in equities produced a 5.9% return as the fund saw losses on its real estate portfolio.Unlisted assets returned 6.8%.The €3.9m Corum Co fund, made up entirely of bond holdings, returned 6.65% as the fixed income portfolio provided 5.4%.UMR operated two of its own equity portfolios, the Select Europe fund and the UMR Select OECD fund.The select fund saw returns hit 20.74% over the course of 2013, as OECD allocations returned 12.23%.UMR said the Europe fund remained overweight euro-zone equities, as allocations to the currency zone reached 15%.It’s OECD Select fund saw its returns come from its 60% allocation to North American equities, primarily US consumer stocks and listed real estate investments.The fund also retained 22% allocations to emerging markets, with a direct 2.8% allocation to local Chinese listed entities.Across the two funds, UMR’s allocations over 2013 leave it with 50% in European equities, 28% in the US and 11% in emerging markets, with the remainder in Japan, Australia and Canada.The UMR Select Alternative fund returned 5.83%, as the pension reasserted its commitment to unlisted investments, including 3.4% of the Corem fund, in both private equity and infrastructure. France’s €7.6bn multi-scheme UMR saw positive returns over 2013 on the back of fixed income and equity investments, as some real estate holdings failed to contribute.Comprising three funds – Corem, R1 and Corem Co – UMR saw strong returns from the equity portfolios it manages as a whole.The €6.1bn Corem fund returned 5% over the course of the year, with its €3.4bn in bond holdings supplying 5% returns.With around 300,000 members, two-thirds of which are still active, the fund maintains a higher equity and growth asset allocation compared with its peers.last_img read more

first_imgThree London boroughs that currently jointly manage £2.3bn (€2.9bn) in local authority pension assets are to review their resource-sharing arrangement.The London borough of Hammersmith and Fulham (H&F), which in May’s local elections went from being run by the Conservative Party to being a Labour Party borough, said a review of all its joint services with two neighbouring councils would look to improve performance.The borough currently jointly administers a number of its services with Westminister and Kensington and Chelsea councils, which have local authority pension schemes (LGPS) worth £880m and £630m, respectively.Hammersmith and Fulham’s own £763m LGPS currently shares a treasury department with the two other councils, with the officers conducting the required due diligence for all asset management and other mandate awards. However, decisions on where each individual fund should invest remains with the local council, although all three have a number of providers in common.The review will be led by Andrew Adonis, a transport secretary under former Labour prime minister Gordon Brown.A spokesman for H&F confirmed that all areas of cooperation would be reviewed, including the tri-borough treasury set-up, but said it was too early to provide details.In a statement on the review, the council said it would examine the potential for widening its model of cooperation beyond the three local authorities.Adonis stressed the need for value-for-money arrangements due to the restricted budgets facing councils.“The tri-borough arrangements are innovative but it is right that, after more than two years of operation, there is an independent review,” he said.“I hope we will be able to compare and contrast with other effective organisations and offer some useful insights and proposed ways forward.”In a report presented at H&F’s most recent pensions committee, the council noted it was happy with the “benefits of resilience and sharing of ideas” since the tri-borough treasury team had been in place since 2012.“It is also leading to more competitive fees from external providers through joint procurement and common mandates where they are appropriate for each fund,” it said.In addition to cooperating on investment management matters, two of the boroughs are undertaking a joint tendering exercise to appoint a new custodian, while all three are advising London Councils on the proposed launch of a London-wide common investment vehicle (CIV) for the capital’s LGPS.A move away from the cooperative approach on pension matters is unlikely despite the review, as the three councils have often been championed as an example of how cooperation can lower costs for the LGPS.Additionally, the Department for Communities and Local Government recently concluded a consultation that looked at greater efficiencies within the LGPS, with one of the suggestions being the launch of a limited number of LGPS-wide CIVs.last_img read more

first_imgDanish pension fund ATP is the latest scheme to sell its holding in Irish low-cost airline Ryanair as a dispute over whether local airline staff should be included in higher-paying Danish collective bargaining wage contracts has escalated.ATP sold off the DKK25m (€2.4m) in Ryanair stock it held at the end of last week, a spokesman for the DKK750bn pension fund confirmed.The exposure had been held indirectly through an external manager, he said.The move was a business decision, he said, adding that ATP did not make the specific factors in individual investment decisions public. At the beginning of this year, Industriens Pension decided to exclude Ryanair from its investible universe, selling off around €60,000 of the airline’s shares, which it had in a passive investment portfolio run by an external manager, a spokesman for the DKK137bn labour-market pension fund said.“We find the management’s business practices and unwillingness to engage in dialogue very problematic,” he told IPE.“Such behaviour also constitutes a business risk we do not want to take.”The pension fund had tried to discuss this with Ryanair through its external ESG adviser, the spokesman said.PensionDanmark, which manages DKK171bn of labour-market pensions money, made the decision back in September to exclude Ryanair and sold its exposure of around DKK50m then.Jens-Christian Stougaard, director at PensionDanmark, told IPE: “The decision to exclude Ryanair was made on a basis on their unwillingness to comply with ILO (International Labour Organization) conventions 87 and 98, as well as pending trials, which can have a negative effect on the company’s business model.”Convention 87 covers freedom of association and collective bargaining, while convention 98 deals with collective bargaining.Stougaard said the pension fund’s service provider had had conversations with Ryanair for several years on these issues.“Even though the company has been open to dialogue, it has not made any satisfactory changes and is not willing to change since the basis of their low-cost business is having the crew operate on Irish contracts of employment,” he said.Ryanair only conducted collective bargaining with its employee representative committees, which deprived staff of the option of bargaining through a union, he said. “We prefer to stay invested and work for change, but sometimes the dialogue is not fruitful, as in the case of Ryanair,” Stougaard said.Ryanair, meanwhile, remains defiant in the face of the pension fund divestments in Denmark.“There are plenty of buyers out there who would be only too happy to buy these shares, which have risen by 19% since 1 January this year,” a spokesman for the company said.“Ryanair is an Irish registered airline, and our pilots and crew operate on Irish registered aircraft in full compliance with EU law.”He said the company had made a formal complaint to the EU Commission about the “multiple breaches by Denmark of fundamental freedoms that are protected by EU law”.He said the mayor of Copenhagen and municipalities involved were breaking EU law by banning their staff from choosing Ryanair’s lowest-fare flights and their case for doing so was baseless.LO, the Danish Confederation of Trade Unions, said it was now awaiting the judgment from the Labour Court to a case LO filed, which was heard on Monday.The dispute centres around Ryanair’s refusal of the Flight Personnel Union’s request for a collective agreement for flight crew staff working on the new air base the airline announced it would set up in Kastrup Airport in Copenhagen from the end of March 2015.last_img read more

first_imgThe run-up to UK’s general election on 8 June may very well be dominated by one topic – Brexit – but that has not stopped the country’s pension funds from listing their preferred priorities for the next government.The Pensions and Lifetime Savings Association (PLSA) has called for political parties to include six pension-related topics in their manifestos, including helping defined benefit (DB) schemes to merge, increasing the minimum contribution for auto-enrolment schemes, and simplifying the state pension.Graham Vidler, director of external affairs at the PLSA, said: “The next government needs to consolidate the growth of workplace pensions, increasing the reach of automatic enrolment and setting out a plan to raise contribution rates. It also needs to make it easier for schemes to make DB pensions sustainable.“Above all, it needs to build public confidence in the system, helping the industry fight scams and deliver the retirement choices savers want, while resisting the temptation for further raids on the pensions tax relief piggybank.” The UK’s first-pillar pension system has already hit headlines since prime minister Theresa May called the election two weeks ago.Of particular focus is the so-called ‘triple lock’, which promises an increase every year based on inflation, average earnings growth, or 2.5%, whichever is highest. Recent reports have suggested that this could be changed to reduce the financial burden of the state pension.A government-commissioned report by John Cridland, former director general of the Confederation of British Industry, recommended that the triple lock be scrapped and the state pension age increased to 68. It is due to rise to 67 by 2028 under current legislation.The PLSA said the state pension was “affordable without further increases to the state pension age” but agreed that the triple lock should be replaced with “a simpler, fairer, and more affordable uprating mechanism” linked to average earnings growth.Consultancy firm Mercer also backed calls for parties contesting the general election to be explicit in their plans for the state pension. Tony Wood, UK leader of Mercer’s health and benefits business, said John Cridland’s review “goes to the heart of many of the core issues raised in the current election campaign”.“However there appears to be a distinct lack of commitment to the recommendations,” he added. “People need to plan well in advance, to be able to make the most of living and working longer, and it is imperative that all the recommendations of this review are addressed by those forming our new government and not kicked into the long grass.”The government was due to discuss the state pension next week, but parliament has been dissolved ahead of the 8 June poll and no more policy work will take place until the next government is formed.The PLSA listed five more areas of focus, including DB scheme consolidation. The trade body is a vocal advocate of schemes working closer together to reduce costs and improve governance, and has proposed the creation of “superfunds”.It said: “The government should bring forward legislation to reduce burdens and enable pension schemes to share services or to merge, delivering better returns, saving money, and improving governance. This will mean a greater chance of members receiving their benefits. It will free employers to focus on corporate growth and it will return public confidence to the system.”On auto-enrolment, the PLSA called for overall minimum contributions to be increased to “at least 12% of salary” by 2030, as well as extending the policy so it applies to workers aged between 18 and 21, self-employed people, and people in multiple jobs.The trade body also recommended an authorisation regime for pension funds to reduce the risk of members transferring into fraudulent schemes. It called for improved help for members at retirement, and for the next government to review the pension tax relief system to ensure it is sustainable and incentivises saving.last_img read more

first_img“Regulation attempts to manage schemes from the centre by mandating the individual processes that schemes undertake but has not delivered the necessary improvements,” it said. Joe Dabrowski, head of governance and investment at the PLSA, said: “Regulatory oversight should […] focus on ensuring the right people are appointed to governance positions and let them take decisions in the best interests of their scheme.“We believe this would deliver the high standards of governance necessary to give pension scheme members security and confidence in their pension fund.”The PLSA suggested that the regulatory approach to pension fund governance in the UK could take inspiration from the country’s corporate governance regime, which was a principles-based, input-focussed approach.“Corporate governance in the UK is well-regarded internationally and the high profile scandals that pre-dated the Corporate Governance Code have become much less common,” said the trade body. “Pension funds could similarly gain from a move in regulatory focus towards governance inputs.”It added that while the UK’s corporate governance regime was subject to intense media and political interest, pension fund governance was subject to comparatively little scrutiny.Commenting on the PLSA’s pronouncements, a spokesperson for TPR said it wanted those running pension schemes to be “a knowledgeable, empowered first line of defence for scheme members”.“We will be focusing on making our expectations clearer, taking action against poor governance and encouraging consolidation where appropriate,” it said.It will not be imposing new or higher standards of governance, however. It will soon be launching a campaign focussed on the fundamentals of good governance, according to the spokesperson.In the longer term, it intends to streamline and consolidate its existing stock of guidance and improving its website in a bid to provide further clarity about its expectations.Last month TPR published a revised description of who it considers to be a professional trustee, saying this paved the way to build standards and accreditation for professional trustees through the Professional Trustee Standards Working Group. The UK pensions regulator should change its approach to ensuring good pension fund governance from one focussed on processes to people, according to the country’s pensions trade body.Releasing a discussion paper on what constitutes good pension fund governance, the Pensions & Lifetime Savings Association (PLSA) said it depended on the people who provide it.The Pensions Regulator (TPR) should therefore concentrate on ensuring that individuals who are appointed to boards and committees have the appropriate knowledge and experience, according to the PLSA.It said this is not TPR’s current approach, and that its discussion paper suggests this is focused on process rather than people. This had not worked so far, according to the PLSA.last_img read more

first_imgThe World Trade Center in AmsterdamFinancial publication FD reported that platforms including CBOE, LSE Turquoise, Tradeweb and Bloomberg could move to Amsterdam, and that several providers of benchmarks and indices had also shown an interest.This could involve financial giants such as like Standard & Poor’s and Dow Jones moving to the Dutch capital, FD reported, as well as up to 23 parties trading for their own account. Currently, only four of these operate in the Netherlands.Van Vroonhoven cited “an almost invisible rotation in the European capital markets”, and also predicted that organisations relocating to the Netherlands would also attract other service providers.“Moreover, it will enhance access to capital markets for Dutch schemes and other asset managers,” she said.The migration of financial trade infrastructure would also offer proper guarantees for “uniform and effective supervision”, Van Vroonhoven continued, as well as “high standards for governance and the protection of investors”.She said that an extension of the regulator’s tasks, investments in additional capacity, expertise, support services and IT systems would be necessary.According to Vroonhoven, companies were focused on the Netherlands and weren’t shopping around in Europe “as applying for a license is complex and time consuming”.She acknowledged that these changes could be limited if the UK and EU opted for a “very soft” Brexit – or no Brexit at all. “But as things stand, we can’t expect this,” she said.Several other European cities have been attempting to lure London-based financial services companies, including Paris and Frankfurt. Luxembourg and Dublin have already experienced inflows of capital and company staff as asset managers in particular have moved to safeguard their EU businesses. The Netherlands is to become the European centre for trading in equity and bonds after Brexit, the Dutch Financial Markets Authority (AFM) has claimed.It said that it has been in “150 substantial discussions” with players from the UK interested in obtaining a license for doing business in the Netherlands.“We expect that between 30% and 40% of the European trade in financial instruments is to move to the Netherlands,” said Merel van Vroonhoven, chair of the AFM.Currently just 5% was based in the Netherlands, she said. An AFM spokesman said subsequently that transactions were expected to increase from 2m to 20m per day, with daily volumes expected to rise from €2.2bn to €14bn.last_img read more

first_imgSweden’s KPA Pension has bought a large office property in central Stockholm from Nordic real estate investor Areim for SEK4.3bn (€403m).In addition, Swedish pensions and insurance group Folksam – KPA’s parent company – has announced an increas to its expansion target for its overall real estate portfolio to SEK20bn over the next few years, after it previously announced a target of SEK10bn. The figure includes KPA Pension’s assets.Michael Kjeller, Folksam’s head of asset management and sustainability, said real estate offered risk diversification to the group’s total asset portfolio, meaning it had been able to increase the return without affecting the level of risk.“However, we still have a need for investment, which is partly due to large net inflows of insurance premiums, and it is against this background that we are setting our new expansion target,” he said. The office property KPA Pension is buying is located at Brädstapeln 16 in Stockholm’s Kungsholmen district. It comprises 36,700sqm of leasable space and was originally built for Swedish non-life insurer Trygg Hansa in 1975.KPA, which runs local authority pensions, said the real estate deal was the third largest ever completed in Sweden. Chief executive Britta Burreau said it increased the property proportion of the fund’s portfolio to 9.2%, up from 7%.KPA Pension said ownership of the property would come into its hands on 1 November.Folksam said it had purchased SEK17bn of properties, including KPA Pension’s latest acquisition, since it began the expansion of the portfolio in 2016. The market value of its real estate portfolio stood at SEK43bn following the Kungsholmen purchase.last_img read more

first_imgGrande is the only applicant mentioned who has significant experience of top leadership at NBIMThe investment strategist, on the other hand, is someone who can give advice to the Finance Ministry on how to develop the asset allocation for the fund, Henriksen said.“Trond Grande most definitely falls into the first category,” he told IPE, adding: “He is effective at execution and has done a superb job as deputy CEO.”Choosing Grande would probably signal that there would be no major shifts in the investment strategy of the GPFG, he said.“And, in particular, that we can not expect that the manager, Norges Bank, promotes such initiatives vis-a-vis the Ministry of Finance, which decides the investment strategy,” said Henriksen.Although the job of CEO at NBIM is one of the most powerful money management roles in the world, one source in executive search warned that securing it was not without its career risks – especially for younger professionals with a longer path ahead of them.“One thing you have to consider is reputation risk here. If something does not go according to plan – for example in tech, cyber security or decisions related to investment or decarbonising – and it’s on your watch, you could find it hard to get a job anywhere else,” the source warned.But is it also possible that the new CEO will be someone who is not even on the applicant list just published. When asked by IPE whether this could happen, a spokesman for Norges Bank said: “It is always possible for the executive board to consider applications after the deadline.” Yngve Slyngstad announced last October that he would step down after 12 years as chief executive. He will carry on working at the organisation and relocate to London.The all-male list of contenders includes Thorbjorn Gaarder, whose occupation is listed as chief credit officer; Jake Tai, a senior consultant in a financial services advisory business from Singapore; sales manager Yngvar Willy Andersen, and senior investments project manager Pål Renli from Snarøya in Norway.Other candidates are Anders Halberg, a director residing in the UK, and Olav Bø.Alongside Grande, Bø is the only other employee of Norges Bank on the list, and is currently executive director of markets and ICT.But Grande is the only applicant mentioned who has significant experience of top leadership at NBIM, and according to one Norwegian source with knowledge of NBIM’s practices, his appearance on the list probably means he has effectively been chosen already.Grande was appointed deputy CEO in February 2011, and regularly appears as the most senior leader of NBIM at press conferences, for example.He originally joined NBIM in November 2007 as global head of risk management, and between October 2014 and January 2016 he had day-to-day responsibility for the real estate organisation.Before joining NBIM, Grande spent 11 years at the asset management arm of Norwegian financial group Storebrand, in roles including senior vice president finance and senior vice president financial risk management.According to Espen Henriksen, associate professor of Financial Economics at BI Norwegian Business School, Norges Bank is likely to have considered three very different profiles for the job of CEO in its recruitment process – the manager, the stock picker and the investment strategist.The first is a good administrator but not someone who necessarily has fund management skills, he said, in line with the oil fund’s first chief executive, Knut Kjaer.Slyngstad is an example of the second type, being experienced in asset management, he said. The manager of Norway’s giant sovereign wealth fund has published a list of the eight candidates applying to be its next chief executive officer, including the current deputy CEO.Norges Bank Investment Management (NBIM), which manages the NOK10.5tn (€1tn) Government Pension Fund Global (GPFG), said eight people had applied for the top role by the deadline of 21 February.It named seven of them but withheld the name of one applicant who it said had been granted exemption from public disclosure.“Norges Bank is now proceeding with the recruitment process,” NBIM said.last_img read more