Economou to step down at Switzerland’s CERN next year

first_img“My mission was create a portfolio that could deliver the highest possible return relative to the risk acceptable to CERN. “We now have a risk-based approach that is designed to deliver just that – i.e. the smoothest possible path towards CERN’s objective.”He said he had initially set out to accomplish this task in three years during his first mandate, but that, “due to the complexity of having representatives of 20 countries and some 15 groups of stakeholders”, it took him four years in the end.Economou said he was considering setting up an investment consultancy with a strategy based on the “CERN model”, and that he would decide on his next move some time this year.Last month, the industry veteran was appointed chairman of the investment committee at the pension fund for Switzerland-based Lombard Odier, which cited Economou’s experience in setting risk budgets as “a valuable complement.”He also serves on the $58.4bn (€43bn) Virginia Retirement System’s investment advisory committee. Théodore Economou, chief executive and CIO at the CHF4bn (€3.3bn) European Organisation for Nuclear Research (CERN) Pension Fund, has confirmed he will not seek re-appointment to his current position, whose tenure ends in August 2015.Economou said he would stay on as chief executive at CERN for the next 14 months and that he expected to be involved in the selection of his successor.He is currently serving his second three-year term as CIO.“I was brought in [at CERN] in 2009 with a clear mission, which has now been successfully accomplished,” he told IPE.last_img read more

Read More →

Higher-risk, equity-weighted pension funds peform best in Latvia

first_imgLatvia’s 23 mandatory second-pillar pension funds returned an average 5.24% in 2014, up from 2.29% in 2013, according to data from the Association of Commercial Banks of Latvia (LKA).The best annual returns were generated by higher-risk, equity-weighted plans (5.52%), followed by balanced funds (5.28%) and conservative, bond-weighted ones (4.57%).For the higher-risk funds, the main asset allocation shifts included increasing the share of equity and equity funds from 27% to 32% of the portfolio, while reducing the bond and bond fund share from 57% to 54%.The conservative funds, meanwhile, raised the overall bond and bond fund share from 82% to 85%. By geographical distribution, Latvian investments accounted for 42% of second-pillar investment, followed by Eastern Europe at 17%.Assets increased over the year by €328m to €2.1bn, of which €92m were investment gains, while membership grew by 2% to 1.25m.Asset growth should accelerate in 2015 as contribution rates – which remained unchanged, at 4% out of a total 20% in 2013-14 – rise to 5%.The five open and one closed third-pillar funds increased their average return from 2.23% to 5.33%, with the riskier funds generating 6.62% and the balanced ones 4.91%.Assets increased by €45.1m to €280.7m, of which €9.4m were investment gains, and membership by 17% to 235,000.The total level of contributions soared by a historic high of 19% to €51.1m.The rising interest in the third pillar came primarily from individual account members, whose contribution levels grew by 26% in 2014, while those from employers fell by 4%.The LKA noted that public sector employers, in particular, have limited scope to contribute to their workers’ pension plans.Have a look at Rachel Fixsen’s article on one Latvian pension fund’s search for size and scale in the January issue of IPE magazinelast_img read more

Read More →

NEST tenders standalone emerging market bond mandate

first_imgThe mandate would initially form part of a pooled fund, but in its tender the fund said that it might transition to a segregated mandate at a later point.Fawcett added: “An active management approach can take advantage of opportunities while managing the portfolio risk by avoiding unattractive or risky borrowers.“By having an investment universe of both hard and local currency debt, the manager will have the ability to invest in the most attractive areas of the market.”The tender comes two years after NEST sought managers for a “relatively cautious” emerging market equity mandate, to which it eventually appointed Northern Trust Asset Management and HSBC Global Asset Management.Fawcett has previously told IPE the fund would be shifting from multi-asset mandates to single-asset mandates as it grows in size, as the change will allow it to exert greater control over asset allocation.It has seen its assets grow to £535m (€728m), up from £104m in April 2014.Interested managers have until 14 October to participate.Read about how NEST views smart beta in IPE’s September issue The UK’s National Employment Savings Trust (NEST) is tendering for an emerging market bond manager to further diversify its default fund.The defined contribution (DC) master trust’s CIO Mark Fawcett said emerging market bonds were increasingly finding a place within pension portfolios as they offered “attractive” yields in the prevailing low-yield environment.“We think it’s appropriate to have emerging market debt among the growing number of asset classes NEST can call on to deliver better retirement outcomes for our members,” he added.The actively managed portfolio would be allowed to seek exposure to both hard and local currency debt, and a spokesman for NEST told IPE it did not have preference for sovereign or corporate bonds, instead preferring to see what asset managers submitted.last_img read more

Read More →

Norway’s domestic government pension fund loses 2.2% in Q1

first_imgThe loss on equities was 0.7 percentage points slimmer than that indicated by the reference index for this asset class.The bond portfolio produced a 1.6% investment return, on the same level as the benchmark.Svarva said uncertainty linked to oil prices and the international economy continued to hit developments on the equity market in the first quarter.“We [are] committed to an active and responsible management to produce good results, but we are also prepared for the fact there may be periods where it will be more difficult to achieve outperformance,” Svarva said.Folketrygdfondet said it also published a report that found its active management had improved the relationship between risk and return compared with the benchmark, and that the excess return it had reported was not due to chance.The report – aimed at providing a broad foundation for understanding and evaluating the results of the investment management of the fund – showed different risk and cost-adjusted returns, according to Folketrygdfondet.“Even when we take account of different risk levels and costs, the GPFN has outperformed the reference index set by the Ministry of Finance,” it said.The GPFN – together with the much larger Government Pension Fund Global or former oil fund, whose assets totalled NOK7.08bn at the end of March – form Norway’s overall Government Pension Fund.The GPFN invests solely in equities and bonds – with respective strategic allocations of 60% and 40% – and its investment is limited to Norway and the Nordic region. Norway’s domestic government pension fund, the smaller counterpart of the giant former oil fund, saw its assets shrink in the first quarter of this year by around NOK4.5bn (€487m) after investment losses of 2.2% but said it did outperform its reference index by 0.4 percentage points.Olaug Svarva, chief executive at Folketrygdfondet, which manages the Government Pension Fund Norway (GPFN), said: “After a dramatic start to the year, with big falls in share prices, interest rates and the price of oil, the stock market rebounded at the end of the quarter.”The NOK4.5bn loss reduced the fund’s total assets to NOK194bn at the end of March from a level of NOK198.5bn at the end of last year.Even though the fund’s equities portfolio suffered a 4.8% investment loss in the first quarter, it was this asset class that contributed most to the overall outperformance over the three-month period, Folketrygdfondet said.last_img read more

Read More →

Norwegian oil fund cuts 10 more companies over coal activities

first_imgThe latest companies to be excluded by NBIM are:CEZ (Czech Republic)Eneva (Brazil)Great River Energy (US)Otter Tail Corp (US)HK Electric Investments & HK Electric Investments (Hong Kong)Huadian Energy Co (China)SDIC Power Holdings Co (China)PGE Polska Grupa Energetyczna (Poland)Korea Electric Power Corp (Korea)Malakoff Corp (Malaysia)The two companies put on observation are both US-based: NorthWestern Corp and Portland General Electric Company.The SWF said it divested from 23 companies on the basis of ESG assessments in 2016, and that it had sold off a total of 210 companies over the last five years on such grounds.Separately, NBIM said it questioned firms about environmental, social or governance (ESG) issues in more than 1,500 company meetings last year.Publishing its 2016 report on responsible investment, NBIM said good corporate governance and sustainable business practices were in the GPFG’s long-term interest. In a recent interview with IPE, NBIM’s chief executive Yngve Slyngstad said that in 2017 the investment manager expected to have nearly 4,000 meetings with companies. It held 3,790 meetings with 1,589 companies last year.“In nearly half of those meetings, we raise issues on governance, environmental, and social issues,” he said.Chairman of the NBIM executive board Øystein Olsen, who is also governor of the central bank Norges Bank, added: “That does not mean that regularly we go public with any of these issues, but we do actually discuss them with the companies.”NBIM said it aimed to vote at all general meetings, and that during 2016 it had voted at 11,294 shareholder meetings around the world.“We are a large global investor with minority ownership in almost 9,000 companies,” Slyngstad said, adding that insight was a prerequisite for responsible management. “Good corporate governance and sustainable business practices will contribute to higher long-term returns”, he said. Norges Bank Investment Management (NBIM), the manager of Norway’s giant sovereign wealth fund, has excluded 10 more companies from its portfolio because of their involvement in coal business, and put another two under observation.The latest exclusions bring the total number of companies outlawed by the NOK7.6trn (€850bn) Government Pension Fund Global (GPFG) because of coal to 69, with a further 13 firms placed under observation.The move came as a result of the manager’s third round of analysis of businesses that may be affected by its coal criterion, NBIM said. All of the latest companies to be excluded are unlisted subsidiaries that issue bonds.Green bonds were excepted from the analysis, NBIM said, as well as subsidiaries deemed to have significant renewable energy activity.last_img read more

Read More →

German regional ministers relaunch push for auto-enrolment

first_imgCountries such as Sweden and the UK had had good experience with state-organised funds, according to the ministers. Thomas Schäfer, the Christian Democrat finance minister for the state of Hesse, has previously cited NEST in the UK and AP7 in Sweden as examples. Ministers in the German federal state of Hesse have relaunched a drive for the introduction of auto-enrolment to boost private pension saving.A resolution to support their idea was brought to the upper chamber of parliament, the Bundesrat, at the end of March. It was promptly assigned to various of the upper chamber’s committees, which have postponed debating the proposal. IPE understands this is normal procedure. Under the Hessian ministers’ proposal, employees would be automatically signed up for a private pension unless they were sufficiently covered by a workplace pension or opted out of the private scheme.The government would create a fund to be the default provider and investor of individuals’ savings unless they chose an alternative. Thomas Schäfer, Hesse finance ministerCredit: Martin Kraft Speaking at an industry conference in Berlin earlier this year, Schäfer also said there was a positive precedent for auto-enrolment in Germany, citing the growth in the number of so-called “mini-jobbers” paying social security contributions since this became the default several years ago.Ministers have also proposed for the default investment product to come with limited guarantees, in return for higher equity exposure and the prospect of higher returns. Currently, state-subsidised private pension savings products have to guarantee the contributions that have been paid in.The state-backed fund would make investments that meet minimum environmental and ethical standards and, for cost reasons, would mainly invest passively. The government would not be allowed to intervene in the fund’s investments.Under the proposals, the scheme would offer savers a cost-efficient and transparent product and compete with private providers on the open market. It and other providers meeting pre-determined criteria would be included in a list to be maintained by a neutral state body. The envisaged national pension savings scheme would be implemented by means of salary sacrifice. For those on a low income, the state would pay a large part of the contributions using the existing system for paying contributions to state-subsidised third-pillar, or “Riester”, products.Trade bodies criticise plansVarious trade associations expressed opposition to the Hessian government’s plan. BVI, the German fund management association, said a state pension fund would distort competition and was unlikely to be cheaper than other products on the market.GDV, the insurance trade body, also came out against the Deutschland-Rente proposal. It said making it a legal requirement for employers to auto-enrol individuals into funded private pensions was challenging from a regulatory and bureaucratic standpoint.It also argued that the Hessian government’s concept did not offer a solution for individuals that were not in stable employment.The current state-subsidised private pension system definitely needed improvement, added the GDV, but efforts should focus on existing, easy-to-implement suggestions. Heribert Karch, chief executive of MetallRente and chair of the German occupational pensions association, was a strong critic of the Deutschland-Rente when it was first put forward by the Hessian ministers.Deutschland-Rente: Take twocenter_img The proposal brought to the Bundesrat last month was based on ideas that go back to 2015, when Schäfer and his fellow regional government ministers Tarek Al-Wazir and Stefan Grüttner first presented the idea of a national private pension savings scheme.The Deutschland-Rente idea came to nothing, however, and reform efforts in the intervening years instead culminated in legislation introducing the possibility of industry-wide defined contribution schemes.  The Hessian ministers have argued that Germany’s recent pension reform – the Betriebsrentenstärkungsgesetz (BRSG) – would probably not be enough to bring about comprehensive pensions coverage, in particular for employees in small and medium-sized businesses that were not signed up to industry agreements.The BRSG came into effect at the start of this year and German unions and employer representatives have asked providers to give them breathing space to negotiate on new pension plans.Schäfer has previously said that existing private pension products tended to be too complex and too expensive for the return they offered. Promoting a standardised Riester pension is one of the policies in the coalition government’s programme .last_img read more

Read More →

Aon sets up German pension fund, DAX companies top up funding

first_imgAon has become the third investment consultancy to set up a Pensionsfonds in Germany, after Willis Towers Watson in 2013 and Mercer in 2017.  The vehicle, UnitedPensions Deutschland AG, has been approved by supervisor BaFin, and takes to 33 the tally of Pensionsfonds on the German market. Aon has a pan-European pension vehicle operating from Belgium that bears the name ‘UnitedPensions’, but a spokeswoman for Aon Germany confirmed that “UnitedPensions Deutschland AG is a completely separate and independent entity”. “There are some similarities but given the very different legal framework it has to be set up very differently and it also only operates in Germany,” she added. UnitedPensions Deutschland is headed by Rafael Krönung, who has been with Aon in Germany since 2004 as an actuary.The new entity was set up in November last year and has no clients as of yet. Rafael Krönung, AonHowever, the spokeswoman told IPE “there is a lot of interest from companies and there is a bigger response than we expected”.A Pensionsfonds is one of the vehicles a company can use to move pension liabilities and assets off its balance sheet. It was introduced in 2002 and designed to be attractive to companies financing direct promise (Direktzusage) pensions via book reserves.In a press release Aon noted that companies were interested in external service providers “to save costs, outsource administration, clear their balance sheets from pension reserves or to ensure professional investment”.Discount rate lowers pension liabilities for DAX companiesOverall, the biggest 30 German companies listed on the Frankfurt Stock Exchange have around €368bn in pension liabilities still on their books, according to Mercer.According to its most recent DAX pension funding survey, the value of the companies’ liabilities had decreased by around 2% year-on-year, mainly because the discount rate used to calculate the value had increased slightly.However, a direct year-on-year comparison is difficult as the composition of the DAX index changed over the course of last year.There is, however, a general trend, which also showed a decrease in pension assets reported by the companies.Given volatile equity markets, pension assets held by DAX companies are estimated to have declined by 3%, according to Mercer.The average funding level decreased slightly, from 69% to 68%, as some companies opted to make top-up payments to compensate for capital market losses.Nevertheless, the consultancy stressed this was still an above-average funding level, especially given the fact that there is no legal obligation to fund pension promises.In Germany companies pay into the PensionsSicherungsVerein, a lifeboat fund that takes care of pension liabilities in case of insolvencies. However, over the last years more and more companies have opted to fund their pension liabilities and accrue some pension reserves.last_img read more

Read More →

You could become a multi-property landlord with just one property purchase

first_imgInside one of the units at 40 Barker St, East Brisbane.More from newsParks and wildlife the new lust-haves post coronavirus17 hours agoNoosa’s best beachfront penthouse is about to hit the market17 hours ago Apartment two has a similar floorplan with an entry into a kitchen featuring an abundance of benchtop and storage space. Two bedrooms and a bathroom with a combined shower and bathtub sit either side of the kitchen, while open-plan living and dining rooms occupy the house’s centre. There is a sleep-out with a separate entry. 40 Barker St, East Brisbane.YOU could become a multi-property landlord with just one property purchase.An entire block four units on a 810sq m block at 40 Barker St, East Brisbane is being offered for sale.The deal offers prospective buyers either a rental income or the chance to redevelop the site.All four apartments have rear and front entries and updated kitchens and bathrooms, while three also have private courtyards. Apartment one has a main entry into its dining room, which connects to a nearby bedroom and living room. A kitchen sits next to the living room and features its own entry, along with ample cabinetry and benchtops and high-quality appliances.This residence also has a second bedroom, a bathroom with shower bath and outdoor courtyard. The kitchens have been updated in 40 Barker St, East Brisbane. Apartment three has a main entry from a patio, which leads into open-plan living and dining rooms adorned with polished timber floors and neutral tones. The adjoining kitchen features ample cabinetry and stainless-steel appliances, including a built-in rangehood.Sliding doors connect the kitchen to a laundry and bathroom with a combined shower and bathtub. Two bedrooms sit next to the living and dining rooms, while the living room flows out to a timber deck surrounded by trees. Apartment four is the only residence with three bedrooms, two of which sit next to the open-plan dining and living rooms and a kitchen with modern benchtops and stainless-steel appliances. The third bedroom is near a laundry and bathroom with a combined shower and bathtub and separate entry. Listing agent Madi Roche or Ray White called it a fantastic opportunity to secure a solid investment.“These three two-bedroom and one three-bedroom flats are tenanted, providing a gross income of approximately $71,000 per annum,” she said. “There is also a unique and rare opportunity to reinstate this Queenslander into an innovative family house.” DETAILS 40 Barker St, East BrisbaneAuction: On site, July 28, 2pmAgent: Madi Roche and Cathy Roche, Ray White East Brisbanelast_img read more

Read More →

Townsville’s ten hottest suburbs

first_img30 Riverwood Drv, Idalia sold for $710,000.TEN Townsville suburbs have defied the softening of the property market to record price growth during the last five years.The semirural suburb of Black River had the biggest increase of 13 per cent when comparing the median house price in July 2013 to July 2018.Black River’s median house price is sitting at $390,000 compared to the Townsville average of $331,500. Ray White Geaney Property Group agent Sean Breitkreutz is selling 9 Greengum Court in Black River. More from news01:21Buyer demand explodes in Townsville’s 2019 flood-affected suburbs12 Sep 202001:21‘Giant surge’ in new home sales lifts Townsville property market10 Sep 2020McGrath Townsville agent Karyn Voevodin outside of 30 Riverwood Drive. Picture: Shae Beplate.She said the new owners loved the house itself as well as the location and Idalia had taken off with retail developments like The Precinct and Fairfield Central flourishing. “Idalia is really close to the city as well as the hospital so there is lots of professionals that live in the area,” she said.“It’s also near cafe’s and restaurants while the shopping is fantastic.“Being a newer suburb it has a really fresh feeling about it and it’s also really pretty with all the parks.”The ten suburbs that recorded positive price growth between 2013 and 2018:1. Black River houses +13%2. Thuringowa Central units +8.3%3. Oonoonba houses +7.5%4. Saunders Beach houses +7.3%5. West End houses +6%6. Belgian Gardens houses +5.9%7. Idalia houses +2.9%8. Nelly Bay houses +2.5%9. South Townsville houses 0.9%10. Pimlico houses 0.2%Source: CoreLogicData current to July 2018 9 Greengum Court, Black RiverHe said the semirural lifestyle had made Black River a desirable place to live and had helped price growth.“I’ve had lots of out of towners looking at this property (9 Greengum Crt) who are wanting to come to Townsville and are looking for somewhere quiet to live,” he said.“Out at Black River you have peace and quiet and you’re not living on top of your neighbours and you have space to have a shed, a pool and a big backyard when you can teach your kids how to ride a motorbike.“Also because it’s close to the highway it’s really only a 20 minute trip into the city and then with the Ring Rd the hospital and Lavarack barracks are real accessible.”Units in Thuringowa Central had the second biggest five year price growth going up 8.3 per cent followed by houses in Oonoonba with a 7.5 per cent increase.Idalia also made the top ten with a median house price of $490,000.While the median price only went up 2.9 per cent in the past five years, the suburb recorded a 22.5 per cent rise in the 12 months up to July 2018.McGrath Estate Agents Townsville agent Karyn Voevodin sold 30 Riverwood Drv in Idalia for $710,000.last_img read more

Read More →

Honey, I gave up the prize home

first_imgMr Driver had won a multimillion-dollar six bedroom, three bathroom Yandina Creek home on the Sunshine Coast — where he just happened to be moving for work within days.“We were in the middle of an argument, me and the old boy, nothing serious — I wanted to go to Bunnings to get PVC pipes to put my fishing rods in, while he said you’re trying to save money, just wrap it in a towel. Then the phone rang.” Not a bad view from the Pyrmont property which will be drawn tomorrow.“We literally packed our bags with clothes and stuff and drove to Krissy’s mum and dad’s house, spent the night there and 10a, I found all the paperwork and the house was ours. It was a bit surreal.”Mr Driver said there was never any likelihood that the young family would keep the home though — they needed the cash.“I had to ask dad to buy some beers to celebrate,” he said.“We were always going to sell it. We only had two kids at the time and they were still young, one was one and half, learning to walk, the other was three and there were 87 stairs in the whole house. It was great to live in it (for three months), a beautiful, beautiful house.” Video Player is loading.Play VideoPlayNext playlist itemMuteCurrent Time 0:00/Duration 0:58Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -0:58 Playback Rate1xChaptersChaptersDescriptionsdescriptions off, selectedCaptionscaptions settings, opens captions settings dialogcaptions off, selectedQuality Levels720p720pHD432p432p216p216p180p180pAutoA, selectedAudio Tracken (Main), selectedFullscreenThis is a modal window.Beginning of dialog window. Escape will cancel and close the window.TextColorWhiteBlackRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentBackgroundColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentTransparentWindowColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyTransparentSemi-TransparentOpaqueFont Size50%75%100%125%150%175%200%300%400%Text Edge StyleNoneRaisedDepressedUniformDropshadowFont FamilyProportional Sans-SerifMonospace Sans-SerifProportional SerifMonospace SerifCasualScriptSmall CapsReset restore all settings to the default valuesDoneClose Modal DialogEnd of dialog window.This is a modal window. This modal can be closed by pressing the Escape key or activating the close button.Close Modal DialogThis is a modal window. This modal can be closed by pressing the Escape key or activating the close button.PlayMuteCurrent Time 0:00/Duration 0:00Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -0:00 Playback Rate1xFullscreenHow much do I need to retire?00:58 The current RSL Art Union draw 366 pits a Noosa property versus a Pyrmont one. Luke Driver had two children when he won this RSL Art Union prize home almost two years ago. He knew they would not be able to keep it. Picture: SuppliedHe was in disbelief when told by an RSL Art Union staff member. “I was shaking. I asked my father dad ‘is this real?’. He snatched the phone off me because of the look of shock on my face, he thought something had happened to one of the kids.”It took the officials two hours to convince the pair that it was indeed real.More from newsParks and wildlife the new lust-haves post coronavirus12 hours agoNoosa’s best beachfront penthouse is about to hit the market12 hours agoEven his wife — who was at work — did not believe him: “I said Krissy we just won the RSL home, and she just said ‘it’s 10 o’clock Luke, are you drinking already?’ And she hung up,” he laughs. MORE: ‘Granny Hilton’ for sale ‘Saddest house in the street’center_img Beach house sells in days Kristan and Luke Driver with their children Summer, 3, Lorie, 5, and George, 9 months, at their new home in Pomona bought after selling their prize home for, Luke bought with the winnings from a victorious prize home ticket. Picture Lachie MillardThey’re the ultimate dream homes — won off the back of $5 tickets — but two in every five prize home winners won’t end up staying in them.RSL Art Union figures show around 34 of the 84 prize home draws won in the past decade were sold off by winners.Luke Driver was 27, “down on luck”, broke, unemployed for eight months due to a sporting injury, and about to move in with the in-laws when he was told he’d won over a year ago. They put it on the market for $1.45m and thought they would be waiting for a while for a buyer “because not everyone has $1.45m”, but “we got the phone call that first afternoon”.“$1.45m for a $20 ticket. We got a bit more because we also got $90,000 worth of gold bullion.”They bought their dream home outright in Pomona, in the Noosa shire.“When we went to the real estate agency, the lady was like ‘have you got your finances sorted?’ We said ‘oh we’re just going to buy it with cash’ and she was just looking at us like ‘what’s going on here’.” FOLLOW SOPHIE FOSTER ON FACEBOOKlast_img read more

Read More →