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Equity boosts 2013 returns at ABP despite losses in infrastructure, commodities

first_imgThe €309bn Dutch civil service scheme ABP said it plans to stand by its strategic investment plan for 2013-2015, focusing on an asset ratio of 40% fixed income and 60% securities, as it announced annual investment returns of over 6%.Over the course of 2013, ABP said slightly increased its equity and government bond allocation at the expense of inflation-linked investments and alternatives, according to its annual report.During 2013, the civil service scheme reduced its hedge on part of the main currencies, but decided to maintain the 25% interest cover on its liabilities.The pension fund attributed its annual result in part to a 22.1% yield from developed market equity, which generated an out-performance of 2.2 percentage points due to quantitative and fundamental strategies in place. The 17.5% return on private equity was due to favourable conditions for the listing of companies, ABP added. In contrast, it lost 6.1% on equity emerging markets, with holdings in Latin America performing worst and losing 16.9%.Inflation-linked bonds returned -4.1%, according to ABP, which noted that Italian government paper generated a positive result. It lost 3.9% on commodities, in part thanks to disappointing results of precious metals, it said. The scheme’s property portfolio delivered 1.3% on balance, chiefly due to a 3% profit of its 24% holdings of tactical real estate. Strategic property – meant to create additional value in the long run – produced gains of 0.8%.Hedge funds investments yielded 1.8%, with credit-related equity and reinsurance the most successful strategies, the pension fund added.Last year ABP incurred a 3% loss on its GTAA, “following unusually low volatility on equity markets, leading to a very low return at one manager,” said ABP, adding that the manager’s contract has now been terminated.It did not provide further details.It attributed the 0.7% loss on infrastructure to a combination of a weak worldwide economy, increasing red tape as well as the depreciation of the Australian dollar and the Indian rupee.The civil service scheme reported asset management costs of 76 basis points, and said it had spent €89 per participant on pensions administration.The Algemeen Burgerlijk Pensioenfonds closed the year 2013 with a funding of 105.9%, which was insufficient for inflation compensation. As a result, the indexation in arrears has increased to 9.24%.Its annual report further showed that the actual retirement age of its participants has increased from 59.3 to 63.5 since 2006.ABP has 2.8m participants in total, 1,096.000 of whom are employees and 793,000 are pensioners.last_img read more

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IBM scheme in Netherlands reports 3% loss over 2013

first_imgThe Dutch pension fund of IT giant IBM has reported a 3% loss over 2013, despite a positive return on its investments of 0.3%.In its annual report, the scheme attributed the performance to the effect of rising interest rates on its interest swaps and swaptions, which it uses to hedge the interest risk on its liabilities.However, it said the positive effect of the adjusted discount rate on its nominal funding largely offset the impact of rising rates.Its coverage ratio fell by 1.2 percentage points to 121.9% at year-end but is still 97.4% in real terms. The pension fund’s financial position enabled the scheme – also known as SPIN – to grant participants in its defined benefit plans an indexation of 1.73% and 2.13%. Following the new discount rate – the three-month average of interest rates plus the ultimate forward rate – it reduced its interest hedge from 100% to 90%. SPIN manages pension assets of €3.9bn, largely in defined benefit arrangements, with €300m in a defined contribution plan, and has 14,165 participants in total. Its assets have been invested in a 70% fixed income portfolio and a 30% securities portfolio.The scheme said last year’s rate increase caused a 2.6% loss for participants in the last of the five age groups in its defined contribution plan due to the large proportion of fixed income in their investment mix.“However,” the SPIN board added, “the increased interest rates also had the benefit that retiring participants could purchase a better pension from insurers with their accrued assets.”The youngest age group in SPIN’s defined contribution scheme – with 90% equity allocation – saw its investments return nearly 19%.The IBM scheme, which did not disclose specific investment results, also confirmed that it replaced French government bonds with Dutch ones last year.SPIN said it planned to review its investment mix due to low interest rates and the effects of rising rates and inflation on indexation.It added that it also wanted to assess the investment portfolio for its DC plan extensively.SPIN will also examine whether the pension fund’s structure needs to be adjusted for a “proper implementation” of the DB and DC scheme, and said it would look in particular at costs, governance and risk management.The scheme reported administration costs of €588 per participant and said it spent 0.46% of its assets on asset management last year.last_img read more

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Italian roundup: Minibond, Pioneer, BNP Paribas, Prometeia, PensPlan, Fondo Pegaso, Groupama

first_imgItalian asset manager Pioneer Investments has launched a €200m, five-year mini-bond fund to invest in Italian small and medium enterprises (SME).The closed fund, named Pioneer Progetto Italia, will invest in credit securities issued by firms with revenues between €10m and €100m and a minimum rating of B-.In a statement, Pioneer said that the fund would focus on companies with a “stable competitive position, credible growth pans, positive economic and financial parameters and that seek to finance further expansion, including on international markets”.The fund will have an option to continue operating for two years after the end of the five-year term. The minimum deposit is €150,000 and proceeds will be distributed annually to subscribers. There are four financing rounds of five months each until the fund reaches maximum capacity. Eidos Partners is advising Pioneer with the selection of firms that will issue the mini-bonds.Cinzia Tagliabue, chief executive of Pioneer Investments, said: “We believe we can contribute to the development of a direct brokerage network between asset management and investment that supports the Italian system.”Earlier this month, BNP Paribas Investment Partners Sgr, the Italian asset management arm of French bank BNP Paribas, announced that it had completed the first closing of BNP Paribas Bond Italia Pmi, another closed mini-bond fund that will invest in Italian SMEs.In the first round of financing, the fund raised €56m and targets an overall target of €150m. The fund has a seven-year term and the minimum deposit is €1m. Marco Barbaro, CEO of BNP Paribas Investment Partners Sgr, told Italian media that the fund has identified seven potential issuers of credit. Advisory firm Prometeia will assist the subscribers of the fund with further due diligence on the recipients.Pioneer Investments, which is owned by Italian banking group Unicredit, says that the mini-bond market is growing, with 30 funds launched – including one by PensPlan Invest – on the Extramot Pro segment of Borsa Italiana, the Milan Stock Exchange, since the creation of mini-bond by Italian lawmakers at the end of 2011.The market is now worth €12m and consists of securities with a 7-year term and coupons between 3% and 10% (6.5% on average).Mini-bonds were created by the ‘Development Decree’ of 2012 introduced by Mario Monti’s government, as a measure to encourage lending to SMEs.The measure has been the object of a passionate debate within the Italian institutional investor community, with critics arguing that pension funds and other investors should not step in to finance small and medium enterprises to make up for the lacking appetite for credit by the banking sector.In other news, Groupama Asset Management has won one of three mandates advertised by Fondo Pegaso, the second-pillar fund for employees of Italian utility companies.Groupama was awarded a global balanced mandate to manage a portfolio of global fixed income and equities for the €670m fund.last_img read more

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EC unveils version 2.0 of strategic investment fund, with COP21 links

first_imgThe European Commission has announced new measures intended to boost public and private investment in Europe and beyond, including beefing up the European Fund for Strategic Investments (EFSI) with a greater focus on clean energy and other environmental objectives.The plans were unveiled by Commission president Jean-Claude Juncker in his “State of the Union” speech to the European Parliament yesterday, 14 September, with the Commission then providing more details.The EFSI is a key vehicle for implementing the Commission’s Investment Plan for Europe, formerly known as the Juncker plan.It is a joint initiative with the European Investment Bank (EIB), which is the main investor. The Commission is proposing to double its duration and financial capacity.The EFSI was initially established for three years, with the aim of mobilising at least €315bn in investments in its first three years (2015-18), with “maximum” private sector contributions.The Commission is proposing to extend the EFSI to reach a target of “at least” €500bn in investments by 2020, with the member state contributions.“And,” said Juncker, “we will work beyond that to reach €630bn by 2022.”Some €116bn in investments has been mobilised so far under the EFSI.EFSI2.0, as the Commission refers to the beefed-up fund, will focus “even more on sustainable investments across sectors to help to meet COP21 targets and help the transition to a resource efficient, circular and zero-carbon economy”.At least 40% of EFSI-approved “infrastructure and innovation” projects “should contribute to climate action in line with the COP21 objectives”, according to the Commission.The EFSI’s increased firepower, however, will not solely be for more environmental projects.The Commission is also proposing to increase to €1bn the total amount of financing for social enterprises and microfinance, from €193m.It said this was expected to mobilise almost €3bn in overall investment.The envisaged new-and-improved EFSI is also intended to have a broader geographical and sectoral reach and offer more transparency on investment decisions and governance procedures.The Commission is going “global” with its investment plan for Europe, as Juncker put it, launching a €44bn plan for Africa and “EU Neighbourhood” countries.Member states and other partners are encouraged to match the EU’s contribution to the new External Investment Plan (EIP). “The logic is the same that worked well for the internal Investment Plan,” said Juncker. “We will be using public funding as a guarantee to attract public and private investment to create real jobs.”The Commission said the EIP would contribute to achieving the UN Sustainable Development Goals (SDGs), which are becoming more of a focus for some large European pension fund investors.CMU agenda Juncker also emphasised the “urgent” need to “accelerate” the Commission’s capital markets union (CMU) project to free up non-bank financing of the European economy.“The Commission is putting a concrete roadmap for this on your table today,” he said.This is based on “accelerating the delivery” of already-announced initiatives, such as new securitisation rules, and “new and substantive” proposals the Commission wants to make by the end of the year.This includes steps to unlock private investment in infrastructure and SMEs by amending insurance legislation and banking legislation.For insurers, this will involve amending Solvency II rules to reduce capital charges.“New legislative initiatives may also be warranted in the future for other priorities,” said the Commission.This includes “a possible framework for an EU personal pension product”, it said.The Commission is consulting on this at the moment.Also as part of its CMU project, the EU executive announced that it would establish an expert group to develop a European strategy on sustainable finance “to support green technologies and ensure the financial system can finance growth in a way that is sustainable”. It will adopt non-binding guidelines on the methodology companies should use to report to investors and consumers on environmental, social and governance issues and said it was “assessing the follow-up” to its recent consultation on long-term and sustainable investment.last_img read more

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PLSA taskforce urges action to fix ‘inefficient’ UK defined benefit system

first_imgAn industry taskforce investigating defined benefit (DB) pension funds in the UK has pointed to consolidation and a more flexible approach to benefit changes and scheme resolution as potential remedies for a system it says is not “fit for the future”.The taskforce was created in March this year.Announcing its interim report at the Pensions and Lifetime Savings Association (PLSA) annual conference in Liverpool today, Ashok Gupta, chair of the group, said: “The current state of DB poses a significant risk to members’ benefits for all but the most strongly funded schemes.”He suggested the current system was a risk to the wider economy and a burden on people outside DB schemes. He added that, in 2015, companies paid around £31bn (€35bn) into their DB schemes, with £11bn of this serving as deficit-recovery contributions.“That money could have been spent elsewhere in their businesses – for example, on wages, business investment, dividends or pension contributions to employees in DC schemes,” he said.He said it was “time to act” because the current system “is not fit for the future”, and its inefficiency is affecting scheme members, sponsors and even more people outside those schemes.The taskforce has come up with four main findings:The system is too fragmentedThe regulatory approach to scheme resolution is inflexibleThe approach to benefit design and benefit change is too rigidThe approach to pension scheme risk-bearing is “sub-optimal”It called for solutions to these problems to be investigated, such as scheme consolidation or a more flexible approach to benefit design and benefit changes.Joanne Segars, chief executive at the PLSA, said the taskforce’s work had helped quantify the scale of what was already a known problem for DB schemes.“The system we have is not working as well as it could – it is inflexible and costly,” she said. “It only allows for binary outcomes of complete success or complete failure.”The next phase of work for the taskforce will be to collaborate across the pensions and investment sector with the government, regulators, social partners and industry to develop recommendations to support the sustainability of DB pensions.Its final report is to be published in March 2017.The state and future of DB pension schemes is a hot topic at the moment as a result of high-profile insolvencies and the impact on deficits from low Gilt yields, with the UK work and pensions select committee’s related inquiries into BHS and wider DB pension regulation keeping the matter high on the agenda.The new UK pensions minister Richard Harrington yesterday told delegates at the PLSA annual conference in Liverpool that the government would soon be launching a consultation – a Green Paper – on DB pension schemes.Consolidation was one of the measures he flagged as a possible way of dealing with some of the problems the sector faces.Not everyone agrees, however, that there is a DB affordability crisis.The executive director at The Pensions Regulator recently said talk thereof was overblown and that the pension fund deficit figures often reported in the media were misleading.Earlier this week, the deputy governor of the Bank of England is reported to have told the work and pensions select committee that the central bank’s quantitative easing policy was not materially harming businesses with DB pension schemes.last_img read more

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Irish pension fund deficits soar to €6.8bn

first_imgConor Daly, partner at LCP, said: “These rises bring challenges, both for the companies themselves and the members … many companies have committed to funding proposals that have been approved by the Pensions Authority.“Market conditions could result in those going off track by year-end 2016 and may require re-negotiation with pension scheme trustees and approval by the Pensions Authority for 2017.”In July, less than a month after the UK voted to leave the European Union, the Bank of Ireland pension fund reported a €460m increase in its deficit.The sudden spike in shortfalls – which for some pensions reached record highs – could hurt dividend payouts and force financial services companies to hold higher regulatory capital, Daly added.Pension funds that avoided wind-up during the 2008 financial crisis might soon come under renewed pressure as the cost of sponsor contributions mounts.In addition, members will “undoubtedly have to take some of the pain”, Daly said, including potential benefit cuts or scheme closures.In its report, LCP said the volatile nature of Irish deficits showed that many companies had yet to implement effective de-risking programmes.LCP analysed the balance sheets of 26 Irish public and state-owned companies with “significant” DB assets to determine the impact of contributions and deficits on sponsor covenant.The consultant found that, last year – a period in which deficits substantially reduced – sponsors contributed on average more than double the amount necessary to cover benefit accruals in an effort to plug shortfalls.Two companies, C&C Group and DCC, contributed more than 10 times benefit accrual.The 26 firms contributed an aggregate €1.16bn to their pensions during 2015.At the end of 2015, only one sponsor – building materials company Kingspan Group – had a surplus in its pension fund.Across the channel in the UK, research by Hymans Robertson indicated that market movements in the wake of the US presidential election helped reduce the UK’s aggregate DB deficit.The consultant estimated a reduction of £35bn (€40.7bn) to bring the shortfall to £825bn as of November 15.Calum Cooper, partner at Hymans Robertson, said: “If the experience of the past year, and particularly the past six months, teaches us anything, it’s that deficits can be extremely volatile.“But these huge gyrations in headline funding figures should not knock schemes off course. A long-term focus needs to be maintained through short-term political fog and uncertainty.” Irish pension schemes’ funding plans may come unravelled in the coming months due to spiralling deficits, consultant LCP has warned.The combined shortfall of Irish defined benefit (DB) pensions ballooned in the first nine months of 2016 to €6.8bn, according to LCP estimates.Falling corporate bond yields, quantitative easing in Europe and the impact of Brexit caused Ireland’s aggregate shortfall to more than double since the end of 2015.Equity gains this year and a bond market rally following the US election earlier this month softened the blow but only marginally.last_img read more

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Deficit payments ‘eat into wage growth’, think tank claims

first_imgBen Franklin, head of economics of ageing at the ILC, argued that deficit reduction contributions had “acted as an opportunity cost” for companies as they were forced to support pensioners instead of investing in their existing workforce.“This situation will not change overnight,” Franklin said. “Based on conservative assumptions about future life expectancy and mortality, we estimate that DB pensions will continue to be paid out well into the latter half of this century.“We call on government, regulators, and industry to devise solutions that move away from simply securing full member benefits and towards those that build in a recognition for the wider societal and economic challenges associated with continued DB pension deficits.”The UK government plans to issue a green paper next year proposing reforms for the DB sector to make it more secure, after the high-profile collapse of the British Home Stores high street chain left its pension scheme in limbo. The Pensions Regulator is currently attempting to secure funding to avoid the scheme having to enter the Pension Protection Fund, where a majority of its members would be forced to take a 10% cut to their benefits.This week a group of politicians issued a wide-ranging report, designed to feed into the government’s discussions, that criticised the regulator and called for radical rule changes to secure DB pensions. The proposals including removing barriers to consolidation and making it harder for employers to shirk their responsibilities towards DB pension funds.The ILC’s data comes from a study to published in January: “The End of the Beginning? Private defined benefit pensions and the new normal”. Deficit reduction contributions have taken almost £100 (€118) a year away from potential wage growth, according to a think tank’s research.The International Longevity Centre (ILC) analysed data from the Office for National Statistics to calculate that the average UK salary would have been 6%, or £1,473, higher at the end of 2015 if money diverted to plug defined benefit (DB) pension scheme shortfalls had been put towards wages.The ILC also estimated that wages were falling as a percentage of total employee compensation as more cash was diverted to pension funds.The ILC said: “While some of those pension contributions will be for current employees, and therefore represent deferred consumption, around half has been for servicing the deficits of DB pensions which have since closed to new members.”last_img read more

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Alternative assets ‘cheaper than their reputation’, says consultant

first_img“In light of the considerable competition we expect more products to come to the market at these prices,” Siglo pointed out.In a market comment (available in German), the investment advisors spoke of a “(r)evolution” (sic) in the alternative space: “Asset managers in that segment have heard the criticism about fees and transparency and have reacted to it,” the consultancy said. “The information made available on demand is impressive and much better than for investments in traditional asset classes.”However, Siglo noted that there were still some negative examples of untransparent and expensive managers in the alternative segment.The most recent Swiss Pensionskassen statistics collected by Credit Suisse showed an increase in alternative assets to 6.86% at the end of 2016.However, this “record high” to a very large part comprised hedge funds, private equity and commodities. Statistics on the use of “new” alternative asset classes like loan funds are still rare. Mostly, they are only used by larger Pensionskassen.Siglo emphasised that Swiss investment regulations for Pensionskassen demanded a spreading of risk.“It seems paradox for investors to exclude the whole range of alternatives in general arguing costs and transparency when trying to fulfill this useful stipulation,” the group addedAlternative asset managers offering products in Switzerland have come under pressure since a decree on cost transparency demanded all Pensionskassen report their fees and costs for asset management services. Competition has pushed down fees for senior secured loan funds to between 0.3% and 0.7% annually without performance fee in Switzerland, according to a consultancy firm.Swiss investment advisory group Siglo said institutional clients had secured low fees for the asset class and argued that “exchange-traded funds are not cheaper and stay well behind the (hardly replicable) indices in their returns”.Siglo said: “Alternative assets are still perceived as being expensive and untransparent but advanced Pensionskassen are demonstrating impressively how such investments can push diversification and returns.”For trend-following (CTA) funds the advisers reported fees for “good funds” between 0.5% and 1% annually prior to performance fees.last_img read more

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People moves: Mercer appoints CEO for Switzerland [updated]

first_imgABP – The €389bn Dutch civil service scheme has appointed Philip Stork as board member as of 1 October, following his nomination by the pensioners’ representatives in the scheme’s accountability body. Stork succeeds Michael Damm who died at the end of last year.Currently, Stork is a professor of financial markets and instruments at Amsterdam’s Free University and is also a trustee at Vervoer, the €23.5bn industry-wide pension fund for private road transport. Earlier in his career, he was head of derivatives and managing director for investment banking at Fortis and its predecessors. He was also a member of the executive board at Van der Hoop Bankiers.Allianz Global Investors – George McKay, co-head of the asset manager will retire in April next year, it was announced today. He will step into a non-executive vice chair role upon relinquishing his executive duties. Karen Prooth has been appointed AllianzGI’s new global chief operating officer. She will join in November from BlackRock, where she was most recently global platform head for ETF and index investments. She also used to be global co-COO of iShares. McKay has also been fulfilling the role of global head of distribution, and Tobias Pross will replace him in this role from next April. Pross is head of EMEA at AllianzGI and a member of its global executive committee. McKay is currently co-head of the firm alongside CEO and CIO Andreas Utermann.Candriam Investors Group – The asset manager has named Koen Van de Maele as global head of investment solutions and member of its executive committee. He was previously deputy chief investment officer at Candriam, where he has worked for 16 years in various roles. In his new position, van de Maele is in charge of the design of tailor-made investment solutions, periodic product portfolio review and product innovation, as well as the development, under the IndexIQ brand, of the group’s European exchange-traded funds business.KAS Bank/Simplitium (updated) – Stewart Bevan and Tom Hibbard have left the UK subsidiary of Dutch custodian bank KAS Bank to join Simplitium, a fintech firm. Bevan was a product manager at KAS Bank and Hibbard a business development manager. The pair played a key role in creating a cost transparency dashboard for the pensions industry that KAS Bank launched earlier this year. At Simplitium, they will continue to work on transparency solutions for pension schemes. Bevan is a member of the Financial Conduct Authority’s working group on institutional costs disclosure, chaired by Chris Sier.Separately, KAS Bank today announced plans to create a dedicated fintech innovation division to “radically transform” governance technologies available to UK pension schemes.Eaton Vance – Thomas Body has joined the asset manager as business development director for Germany and Austria, with a view to managing a new office in Frankfurt. The appointment is part of Eaton Vance’s efforts to strengthen its team in the region to meet growing client interest, the firm said. Body joins from Aberdeen Standard Investments where he was head of business development for financial institutions in Europe. He is responsible Eaton Vance’s client relationships with German pension funds, investment consultants, insurance companies and institutional fund buyers.Actuarial Association of Europe (AAE) – Thomas Béhar is the association’s new chairperson, succeeding Kristoffer Bork. Esko Kivisaari was elected vice chairperson. A French national, Béhar was president of the French actuarial association from 2006 to 2010, and again from 2012 to 2016. AAE has also adopted a new strategy and governance structure, which sees the board of directors no longer comprising the committee chairpersons but acting as a separate body with nine elected members. Béhar has said he wants to extend the AAE’s relationship with European institutions so that they can better understand the soundness of decisions from an actuarial perspective.Unigestion – Alexandre Déruaz has been appointed head of portfolio construction for the firm’s equities products. He joins after a 10-year spell at Lombard Odier, where he was most recently head of systematic equities and alternatives. He was also previously head of the firm’s smart beta arm. Déruaz has also worked at Union Bancaire Privée and BNP Paribas.Cardano – The fiduciary management provider has hired Cédric Bucher as co-head of defined contribution (DC), alongside Ralph Frank. He joins from Architas, part of AXA, where he was head of Architas UK funds. He moved to Cardano at the start of September and will focus on the commercial development of Cardano’s DC business. The group was recently appointed by NEST to offer general investment advice and support with fund manager search and selection exercises.Hermes Investment Management – The asset manager wholly owned by the BT Pension Scheme has appointed Silvia Dall’Angelo as senior economist. She joins after 10 years at hedge fund Prologue Capital. Eoin Murray, head of investment, said Dall’Angelo’s “insight, knowledge and expertise will be a tremendous asset to the business”.Carbone 4 – The French carbon analytics company has appointed Matthieu Maurin as managing director of its subsidiary, Carbone 4 Finance, which is dedicated to developing carbon data solutions for finance institutions. Maurin was previously a director in the sustainable finance team of BNP Paribas’ investment bank. French pension funds ERAFP and FRR have both used Carbone 4.Schroders – The UK listed manager has named Reto Schwager as CEO of Schroder Adveq, the firm’s recently acquired private equity specialist arm. He will join on 1 January, taking over from Sven Liden. He was previously at financial services group Orix Corporation where he was global head of private equity at Robeco and member of the executive committee of RobecoSAM. Schwager has also worked at Partners Group and was chairman of AIG Investment (Europe).JP Morgan Asset Management – JPMAM’s Global Insurance Solutions Group has hired three staff to its client advisory and strategic analytics teams. Mark Oldcorn has joined as head of international insurance solutions, Charles Matterson as head of UK insurance solutions and Jinglun Yao as an associate within the institutional strategy and analytics team.Oldcorn was previously group relationship manager at Deutsche Börse, and will be responsible for building and maintaining relationships with insurance companies outside the US. Matterson joins from Schroders where he was a client director. In his new role he will focus on relationships with UK insurers. Yao was previously an intern at JPMorgan Market Risk Quantitative Research.Hamilton Lane – The private markets specialist has hired Nick Kavanagh to its London office as a vice president on its co-investment and secondary teams. He joins from Singapore’s Temasek, and has also worked at Pantheon Ventures and Gresham Private Equity. Mercer, ABP, AllianzGI, Candriam, KAS Bank, Simplitium, Eaton Vance, Actuarial Association of Europe, Unigestion, Cardano, Hermes, Carbone 4, Schroders, JPMAM, Hamilton LaneMercer – The consultancy giant has hired Samuel Lisse as CEO of its Swiss business. He joins from Vita Collective Foundation, a provider of occupational retirement funds, where he was CEO for six years. Lisse has also worked at Alexander Forbes Financial Services in South Africa as pension fund leader, and has held positions at Assurinvest and Swiss Life Pension Services. He takes over from Catherine Schoendorff who has left to pursue new projects, Mercer said.Separately, Aled Jones, principal in the consultancy’s responsible investment team, has left the company, a spokesperson has confirmed. He had been at Mercer for just over six years. Before joining Mercer Jones worked for the London Pension Fund Authority and before that at the Pension Protection Fund, in both cases developing and implementing the funds’ responsible investment strategies. He has also worked at Innovest, Jupiter Asset Management and F&C Investments.Netherlands’ Ministry of Social Affairs – Jetta Klijnsma, state secretary for pensions at the Dutch ministry of Social Affairs, has been nominated as the new Royal Commissioner of the province of Drenthe. Since 2008, Klijnsma has been state secretary in two consecutive cabinets under prime ministers Jan-Peter Balkenende and Mark Rutte. Under Rutte, she was responsible for the update of the pensions system as well as raising the retirement age for the state pension.last_img read more

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Mandate roundup: German fund in €1bn LDI search on IPE Quest

first_imgThere is to be no exposure to non-government related companies unless the exposure can be classified as money market positions.More information about the mandate is available via IPE Quest. Interested parties have until 8 January to apply, and should state performance gross of fees to 31 October 2017.Also on IPE Quest, a large Swiss pension fund is searching for a large cap domestic equities manager for a CHF550m-CHF600m (€471m-€514m) passive mandate.According to search QN-2384 the benchmark is the SPI20. Managers should have at least CHF10bn of assets under management, and CHF5bn for Swiss equities.A track record of five to 10 years is preferred, but three years is the minimum.The asset owner does not want a tracking error of more than 0.2%.The deadline for applications is 15 December.A Scandinavian foundation has put out initial feelers for a global large cap equities mandate via IPE Quest’s Discovery service. It is considering investing $30m (€25.4m) in an active fund, according to DS-2382.The portfolio should be diversified with at least 20-25 stocks from several sectors and regions. The foundation has said it prefers a flat fee.IPE Quest mandate searches from a central and eastern European pension fund close on Friday, while the deadline for a €10m Irish residential property mandate is on 18 December.The IPE news team is unable to answer any further questions about IPE Quest, Discovery, or Innovation tender notices to protect the interests of clients conducting the search. To obtain information directly from IPE Quest , please contact Jayna Vishram on +44 (0) 20 3465 9330 or email [email protected] . ERAFP currency hedging mandateIn France, €28bn public service pension scheme ERAFP has tendered out foreign exchange hedging mandates for around €2bn.The hedging strategy should be passive and, where applicable, dynamic.In a statement, it said the macroeconomic situation in recent years had brought to light the importance of currency risk incurred by investors in their portfolios.“In this context,” it added, “management of foreign exchange hedging for the assets in ERAFP’s consolidated portfolio has three main objectives: first, reduce the overall exposure to foreign exchange risk by decreasing the exposure to foreign currencies; secondly, better coordinate foreign exchange hedging and, lastly, reduce the cost of this hedging.”It wants to select three investment companies: one active manager and two on standby.The selected active contract holder will be tasked with creating and managing a mutual fund for managing the foreign exchange risk of ERAFP’s assets; the notional amount hedged at the start of the mutual fund’s life is expected to be around €2bn.The submission deadline is 19 January. A German pension fund has launched a tender for a €1bn liability-driven investment (LDI) mandate using IPE Quest.According to search QN-2385, the pension fund wants to hedge this portion of its liabilities, of which it has €3bn, against changes in interest rates.It wants the manager to use government bonds – invested as buy-and-maintain assets – and swaps to complete the hedge.It has specified that the portfolio be managed in a risk-controlled manner “in the sense that no active bets on the movements and shape of the interest rate curve or currencies will be taken intentionally”.last_img read more

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