ABP almost doubles sustainable investments

first_imgDutch civil service scheme ABP said it had almost doubled the proportion of “highly sustainable” investments over the last year, to 8.5% of its €373bn investment portfolio last year. Half of these investments consisted of real estate that met the highest sustainability criteria of the Global Real Estate Sustainability Benchmark (GRESB), a portfolio that has tripled in scale in 2014, Corien Wortmann-Kool, ABP’s new chair, said during the presentation of the pension fund’s annual report on environmental, social and governance (ESG) investing.She said that ABP wanted to further raise its sustainability target for investments in companies, but said that it would provide details after the summer.Wortmann added that the scheme would also present measurable targets for a further increase of the sustainability of its investment portfolio. The €179bn healthcare scheme PFZW has previously said that it wanted to quadruple its investments to 12% in companies with an important role in improving healthcare, solving water shortage as well as reducing CO2 emissions.Commenting on pressure groups that wanted ABP to divest from fossil fuels such as coal, oil and gas, Wortmann said that the board took the objections seriously, but that many other participants had an entirely different take on the issue.“In their opinion, we must deliver proper returns in the first place,” she said.The chair indicated that ABP would not give in to the demands of these action groups, and that it saw that the role for fossil energy remaining important during the coming decades, despite the ongoing transition to renewable sources.According to Wortmann, following an investigation into the risks of investments in fossil energy, ABP had already reduced its stake in coal in favour of gas and oil. However, she declined to be specific about which companies the pension fund had divested from.This week, the €812bn Norwegian Government Pension Fund Global announced that it would divest from all companies which had a stake of more than 30% in the coal sector.ABP made clear that it wanted to act as a responsible stakeholder, and that it had engaged with more than 200 companies about environmental and social matters, remuneration as well as governance.Once the engagement process got underway, firms in Europe and the US were granted two years to improve performance, while Asian companies were given three years.If they fail to act, ABP could decide to sell its stake.last_img read more

Dutch pension funds untroubled by risk of Greece contagion

first_imgWilbrink added that PGGM had a dedicated team to monitor the situation and keep its clients updated on a daily basis.APG, the €424bn asset manager for the large civil service pension fund ABP, also has a “very limited” exposure to Greece, according to Harmen Geers, its spokesman.He said it recently divested its remaining position in Greek banks and noted that market volatility had been lower than expected. “We don’t expect that the current turmoil will affect economic growth or the long-term perspective of our investment portfolio,” he said. Earlier, APG made clear that it had already factored in the scenario that Greece would leave the euro.At the time, Geers said it also had a system in place to deal with a new currency. Back then, he argued that any remaining investments in Greece would not be rendered worthless following a Grexit, but that their value would depend on the exchange rate between the euro and a new currency.The €43bn metal scheme PME said it had already divested its entire holdings of Greek government bonds several years ago, and that its remaining investments in Greece were so limited that its funding would not suffer if the country left the euro-zone.APG spokeswoman Gerda Smits said: “We expect that the turmoil on the financial markets will be temporary.”She added that PME was trying to find out how to get hold of its pensioners living in Greece to make sure they kept on receiving their benefits. PMT, the €65bn scheme for the metalworking and mechanical engineering sector, said it divested all its direct investments in Greece, including government bonds.Its preparations for a Grexit included the effects of increasing interest spreads, according to Annemieke Biesheuvel, spokeswoman for the fund.Meanwhile, the developments in Greece have already led to a decrease in Dutch pension funds’ funding today, as a consequence of falling interest rates.By mid-morning, the 30-year swap rate fell by 12 basis points to 1.68% compared with Friday, according to Dennis van Ek, actuary at consultant Mercer.He added that this translated into a decrease of almost 2.5 percentage points of the average pension fund’s coverage ratio to no more than 110%.Van Ek noted that investors were scaling back risks by replacing the equity and government bonds of peripheral countries for the AAA government paper of Germany and the Netherlands in particular.He said that, while the interest level of these “safe” government bonds had fallen, the interest on 10-year Spanish and Italian bonds has increased by 20 basis points since Friday.He added that interest on Greek government paper with the same duration had climbed by 3.5 percentage points to 13.5% by mid-morning. The larger pension funds in the Netherlands expect little direct impact from any eventual Greek departure from the euro-zone, as their exposure to the beleaguered country is very limited or even non-existent.In a blog posted on Friday, Peter Borgdorff, director at the €178bn healthcare scheme PFZW, said the remaining stake of his pension fund was no more than 0.03%, and that a Grexit would not have a direct impact on its funding. Maurice Wilbrink, spokesman for PGGM, the asset manager for PFZW, declined to provide details on the scheme’s indirect exposure, such as through the government bonds of Italy or Spain. But he did say: “The markets are waiting for the outcome of the Greek referendum, and we observe that the volatility in equity markets, interest rates and the euro itself has not increased.”last_img read more

Former TPR chair O’Higgins joins LPFA/Lancashire partnership

first_img“I applied for this role,” he said, “because I believe what Lancashire and London are doing with this partnership is exactly what should happen across local government – and, indeed, the wider pension sector – to help secure better benefits for members.”O’Higgins has previously worked at PwC and PA Consulting, and is currently chairman of the NHS Federation and of the remuneration committee at Network Rail.Jennifer Mein, Lancashire County Council leader, said it was moving ahead with the pooling vehicle as the industry awaited a government announcement on the future shape of local government pension schemes (LGPS).“Michael’s vision and experience are welcome assets, which should give others confidence in the seriousness of our joint endeavour, as we work towards launching the new company in April 2016,” she said.Merrick Cockell, newly appointed chairman of the LPFA, praised O’Higgins’s past roles across the public and private sector, as well as in academia.“To have a person of Michael’s calibre chairing the partnership is a real testament to what we are trying to achieve,” he said. Chancellor of the Exchequer George Osborne recently spoke of the need for consolidation among LGPS and has said he would like to see the creation of half a dozen asset pools, or “British wealth funds”.As part of their efforts to pool assets, all other London local authority funds outside the LPFA have backed the launch of a London collective investment vehicle, while LGPS from the South West are coming together to create a £19bn asset pool. The £10.5bn (€14.8bn) pooling vehicle set up by the London Pensions Fund Authority (LPFA) and Lancashire has hired former pensions regulator chairman Michael O’Higgins as its inaugural chair.The London and Lancashire Pensions Partnership (LLPP), agreed by the local authority funds in July, also said David Borrow, the deputy leader of Lancashire County Council, and Skip McMullan, currently a board member for the LPFA, would join the venture’s board.O’Higgins, who left the Pensions Regulator in 2014 after three years as its chairman, will now recruit a further three non-executive directors to join the board.He said he was delighted to be involved in the “ambitious” pooling exercise, which he predicted would see a significant change to the public sector pensions system.last_img read more

Finland’s Elo increases exposure to hedge funds, private equity

first_imgElo was formed in January 2014 through the merger of Pension Fennia and LocalTapiola.According to the interim report, the equities allocation dropped to 30.7% at the end of September from 35.3% at the same point a year before.Elo said it also made a big reduction in the proportion of corporate bonds in its portfolio in the spring.“Since the end of July, corporate bond margins have been growing in the energy and mining sectors, and also in other sectors,” Hiidenpalo said.“The supply of new corporate bonds has decreased considerably as uncertainty grows.”Exposure to hedge funds increased to 13.3% at the end of September from 10.3% 12 months before.Private equity exposure, too, has grown, rising to 5% from 3.8%.Hiidenpalo told IPE: “We are quite happy with our hedge fund allocation, at the moment around 15%.”She said the shift to hedge funds had been an independent decision and not directly related to the reduction in equity or credit market exposure.Seh said Elo was following its dedicated long-term investment strategy on hedge funds.“It is true a market correction has happened, and this may provide some new investment opportunities in equity and credit markets going forward,” she added. Equities overall returned 4.7% between January and September, down from 7.3% over the same period last year, while fixed income made a loss of 0.2% compared with a 3.4% return.Real estate returned 5.8%, up from 4%.Within equities, unlisted equities generated a return of 12.1%, up from 9.7%, while the return on private equity rose to 18.7% from 15.4%.Hedge funds returned 2.2%, down from 5.3% a year earlier.The solvency ratio declined slightly to 23.9% of technical provisions at the end of September from 26.4% at the same point a year before.Elo’s total assets climbed to €20.1bn at the end of September from €19.4bn at the end of September 2014. Finland’s Elo reported a 2.4% return on investments over the first nine months of this year, down from 4.9% in the same period in 2014, and increased its allocation to hedge funds and private equity.In its interim report for January to September, the mutual pensions provider said falls in commodity prices and economic uncertainty in China were reflected in the equity markets, whose decline steepened in August.Hanna Hiidenpalo, Elo’s director and CIO, said: “European equity markets have yielded better returns from the beginning of the year than US markets but declined from the spring highs more than the US.”She said Elo had reduced its equity risk somewhat compared with the beginning of the year. last_img read more

Swiss pension fund association welcomes cut to minimum interest rate

first_imgThe Bundesrat noted that the yield on Swiss seven-year bonds stood at -0.38% when the commission made its recommendation in August.In a statement, Hanspeter Konrad, president at ASIP, told IPE he supported the proposed reduction.“The decision is necessary in light of the low-interest-rate environment, accentuated through the negative rate of interest set by the Swiss National Bank.The industry has repeatedly criticised the central bank’s monetary policy, as well as its now-reversed decision to shield both the country’s largest pension fund, Publica, and its own occupational scheme from the impact of negative deposit rates.But Konrad struck an upbeat note about the return prospects for the country’s second pillar.“Due to the current low-price environment, this [1.25% rate] nevertheless results in a welcome real return,” he said. The rate has fallen, if not steadily, over the last decade, standing at 2.5% in 2006 and falling to 1.5% by 2012.It was then increased to 1.75% in 2014.According to the Credit Suisse Pensionskassenindex, the average fund would have seen a loss of 0.14% over the first half of the year. The Swiss government’s decision to cut the minimum interest rate for pension funds has been welcomed by local pension association ASIP.The Bundesrat said 2016’s rate would be set at 1.25%, a reduction of 50 basis points over the level agreed for 2015.The cut is in line with a recommendation supported by a significant majority of the statutory occupational pensions commission (BVG-Kommission).The Mindestzins, which dictates the level of compensation active members must be granted each year, is reviewed annually in line with prevailing Swiss government debt yields and return expectations from other assets.last_img read more

Dutch Philips scheme amends strategic allocation as returns slump

first_imgThe purpose of its new variable allocation is to achieve its target of inflation-proofing pensions, it said.However, Roel Wijmenga, the scheme’s chair, conceded that indexation would be unlikely over the next 3-5 years, as funding stood at just under 110% as of the end of March.The scheme can grant partial inflation compensation only once it has achieved a coverage ratio of at least 116%. The Philips Pensioenfonds reported a total annual return of 0.2%, compared with 19.6% for the previous year.High-yield credit, returning 9.3%, was the best-performing asset class, while global credit returned 5.9%.The scheme incurred a 0.7% loss on its 36% allocation to euro-denominated government bonds.In contrast, global government paper returned 4.9%, benefiting from the euro’s depreciation against the dollar and other currencies.Emerging markets debt returned 0.6%.The Philips scheme cited a new valuation method for a 0.1% loss on its 3% mortgages portfolio.Real estate, accounting for 11% of assets, returned 5.1%, according to the pension fund, which is still in the process of constructing a portfolio of indirect non-listed real estate, following its decision to divest all its direct property holdings.It said it was temporarily investing in a combination of listed real estate and cash to get closer to its target profile.The Philips Pensioenfonds attributed the 8.3% return on its 29% equity holdings to the monetary easing in the euro-zone and Japan.It reported costs of €171 per participant for pensions provision and said the €20 increase was due to the switchover from provider Aon Hewitt to PGGM at the start of 2016.It said it spent no more than 10 basis points on asset management due to its relatively large allocation to fixed income, its predominantly passive investment style and its “minimal” allocation to hedge funds and private equity. The Philips Pensioenfonds has amended its strategic asset allocation, aimed at adjusting the ratio between its matching portfolio and return portfolio as its risk/return profiles change.According to the €18bn fund’s 2015 annual report, the new allocation sets bands of 50-65% for fixed income investments and 35-50% for securities.The pension fund, however, has not yet put its new margins to use, maintaining matching and return portfolios at 60% and 40% of assets, respectively.In 2013, the Philips scheme decided to raise its risk profile for better return opportunities by scaling back its matching portfolio.last_img read more

UK roundup: Falling life expectancy could reduce liabilities

first_imgUK pension fund liabilities could fall by up to 2% due to revised mortality figures, according to Willis Towers Watson.New data from the Continuous Mortality Investigation (CMI), which monitors UK longevity trends, showed standardised mortality rates improved by 2.6% a year on average between 2000 and 2011, but since then “have been close to zero”.Stephen Caine, senior consultant at Willis Towers Watson, said: “For some schemes about to embark on new funding negotiations, adopting [new CMI data] could cut life expectancy for a male retiring now by around six months compared with the assumptions made when they last went through this process three years ago. This could represent a reduction in liabilities of up to 2%.”However, Aon Hewitt has warned that the same data could mean some pension schemes finding themselves at the wrong end of poor pricing in the longevity hedging market. Tim Gordon, head of longevity at Aon Hewitt, said: “It is increasingly difficult to argue that the fall off in national mortality improvements since 2011 is simply a blip. However, the underlying picture for pension schemes is complex and, accordingly, a more tempered view is appropriate.”Gordon added that the longevity swap market was “in a state of flux”.“With changing or incomplete data, there remains a risk that schemes considering hedging their longevity risk may end up with poor pricing, or make a decision based on out-of-date information,” he said.In its 2016 update, the CMI said: “Mortality improvements in the general population since 2011 have been unusually low compared to the earlier part of this century.”Figures to the end of December 2016 showed life expectancies at age 65 were 1.3% lower for males and 2% lower for females when compared to 2015 data, the CMI said.Premier Foods reduces pension billPremier Foods, the listed food manufacturer, has reduced its pension spending by £32m for the next three financial years owing to an improvement in its pension schemes’ funding levels.For the three financial years from 2017 to 2020, Premier Foods will pay £107m into its pension schemes, versus £133m under its previous arrangement. In addition, its administration costs are expected to fall by £2m a year due to a contribution from one of the group’s pension schemes.Between 2020 and 2023 the company will pay £114m into its schemes, compared with £101m under the previous arrangement.The owner of popular UK brands including OXO and Mr Kipling revised its deficit reduction payments following a 2016 actuarial valuation. Chief financial officer Alastair Murray said this would allow the company to “focus on maximising the company’s free cash flow generation and debt reduction”.Performance monitor for LGPSKAS Bank is to provide investment performance reporting and monitoring services to the UK’s local government pension schemes (LGPS).The company was appointed through the LGPS’ central framework for tenders, administered by Norfolk County Council.Pat Sharman, managing director for the UK branch of KAS BANK, said: “By providing independent performance measurement, we provide our clients with information that helps them with the governance of their scheme, engage in conversations with their service providers based on unbiased information and, where needed, execute decisions in the interest of all the members of the scheme.”NHS employers to pay pension admin costsEmployers in the National Health Service (NHS) Pension Scheme are to pay an additional 0.08% of pensionable pay towards administration costs, the government has ruled.From 1 April, employer contributions to the unfunded scheme will rise from 14.3% to 14.38%, the UK’s Department of Health announced last week.The NHS Pension Scheme has more than three million members, including 850,000 pensioners.last_img read more

​NBIM urges GRI standards to track outcomes of human rights efforts

first_img“We believe these proposed revisions will contribute to more comparable and comprehensive sustainability reporting by companies,” the manager said.While supporting the revisions, Carine Smith Ihenacho and Wilhelm Mohn, chief corporate governance officer and head of sustainability at NBIM, respectively, who signed the letter, also said: “It would be helpful for the GRI to also include quantitative and qualitative indicators on the outcomes and effectiveness of companies’ efforts to address potential and actual negative impacts.”The pair said they encouraged the GSSB to consider including such indicators in both the universal and topic standards.Smith Ihenacho and Mohn also said they supported the Valuing Respect Project of US non-profit organisation Shift, which they said aimed to develop more meaningful ways of evaluating business respect for human rights – and outcomes for people in particular.“Over time, we expect a clearer and more complete picture of indicators measuring outcomes and effectiveness to emerge,” NBIM said, adding that this underlined the need for a dynamic approach to standards for human rights disclosure, where metrics gradually crystallised.Looking for IPE’s latest magazine? Read the digital edition here. Norges Bank Investment Management (NBIM), which manages Norway’s Government Pension Fund Global (GPFG), has called for a major set of sustainability standards to include indicators about actual outcomes of work companies do to improve human rights.The Oslo-based manager of the NOK10.3trn (€963bn) sovereign wealth fund made the suggestion in its response to the Global Sustainability Standards Board’s (GSSB) consultation on revisions to the Global Reporting Initiative’s (GRI) Universal Standards, which ended on Wednesday.In the letter published on NBIM’s website, the division of central bank Norges Bank said it was commenting specifically on responsible business conduct and human rights disclosures, saying it saw this as an important addition to the GRI Universal Standards.NBIM welcomed the proposed revisions, including a clarification of the focus of the GRI standards, revised definitions of key concepts such as ‘impact’, ‘material topic’ and ‘stakeholder’, as well as a proposal that firms reporting according to the standards would no longer have a choice between core and comprehensive options.last_img read more

A landmark home, which sits at the highest point in Teneriffe has sold under the hammer

first_img32 Teneriffe Drive, Teneriffe.“It has a grandeur yet as soon as you enter the door you feel welcomed. It’s been a very welcoming and gracious home to live in.” 32 Teneriffe Drive, Teneriffe.In all seven bidders lined up to secure the house with bidding starting at $3 million before quickly increasing to $4 million before selling under the hammer. Megan Ward at her Teneriffe home which sold at auction. Picture: AAP/ Ric FrearsonA LANDMARK home, which sits at the highest point in Teneriffe has sold under the hammer for $4.405 million, one of the highest prices achieved in the suburb for a non-riverfront property in more than a decade. 32 Teneriffe Drive, Teneriffe.The home, which dates back to the 1900s is on a corner block opposite Teneriffe Park, has city views and overlooks the Brisbane River.More from newsNew apartments released at idyllic retirement community Samford Grove Presented by Parks and wildlife the new lust-haves post coronavirus18 hours agoOwner Megan Ward, bought the house at 32 Teneriffe Drive, Teneriffe, 11 years ago.She said anyone who walked past wanted to see inside it. 32 Teneriffe Drive, Teneriffe.The five-bedroom, three-bathroom, colonial is within walking distances of the Brisbane River, James Street and Gasworks.It was marketed through Henry Hodge of McGrath Estate Agents.last_img read more

Deceased estate opens opportunity at Brisbane’s Bellagio

first_img Mansion fit for royalty RELATED: Developer clocks almost $200m His son and executor of the estate Nick Chancellor said Peter was well known as Pete, Pedro and to many PTC.“For a time, dad was also affectionately known as Harry,” Nick said.“His mates gave this nickname cause he looked like Harry Butler and had some very quirkypets including Harry the cockatoo.” The 42sq m balcony has an easterly orientation with stunning views of the river and Story Bridge. There is also a basic outdoor kitchen which could be refurbished to maximise it’s potential. “Bellagio is in one of the best locations in town, just moments to both the Queen Street Mall and Fortitude Valley/New Farm, as well as some of the best schools in Queensland, an array of shopping, dining, transport and lifestyle options including the brand new Howard Smith Wharves development,” Mr Wortley said. >>FOLLOW EMILY BLACK ON FACEBOOK<< More from newsParks and wildlife the new lust-haves post coronavirus14 hours agoNoosa’s best beachfront penthouse is about to hit the market14 hours agoRay White New Farm agent Brandon Wortley said residences within Bellagio are tightly held and virtually unknown due to it’s inconspicuous location and low transaction volume. With vast indoor and outdoor entertaining spaces, this apartment is fit for families seeking a low maintenance lifestyle. “Dad loved entertaining at the unit,” Nick said.“He would always get a gathering together for Riverfire and held what were pretty large birthday parties either in the unit or on the pool deck.“For one party, I think it was his 75th, we covered the spa pool and used it as a stage for my band Roger the Cabin Boy to play to the crowd.”center_img DECEASED ESTATE: Apartment 3, Bellagio, 455 Adelaide St, Brisbane City will go to auction of February 2, 2019. An apartment belonging to the late Peter Chancellor, the second of the three generations to serve at the firm of Chancellors Chartered Accountants over 124 years, has hit the market. Peter died on February 11 at 81 from heart failure.“He had a notoriously strong constitution, however, lifestyle choices including wine consumption would have contributed,” Nick said.The property will be auctioned at The Calile Hotel, 48 James St, New Farm on February 2, 2019 at 2pm. Video Player is loading.Play VideoPlayNext playlist itemMuteCurrent Time 0:00/Duration 0:48Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -0:48 Playback Rate1xChaptersChaptersDescriptionsdescriptions off, selectedCaptionscaptions settings, opens captions settings dialogcaptions off, selectedQuality Levels720p720pHD432p432p270p270p180p180pAutoA, 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 Rate1xFullscreenAustralia’s top suburbs to buy for foodies00:48 The property offers outstanding river and bridge views.The apartment is within the CBD’s smallest residential building, Bellagio, and occupies the entire third floor across 320sq m with views of the Brisbane River and Story Bridge. “He acquired and relocated from the family home El Nido (19 Hillside Cres, Hamilton) to the Bellagio unit following the passing of my mother Patricia from pancreatic cancer in 2007,” Nick said.“The logic was to be close to the action, with our office in Adelaide St and the restaurants in Eagle St that he once frequented.“He had a very close relationship in particular with Pier Nine and Cha Cha Cha and their proprietors Matthew Hill-Smith and John Kilroy. “Dad was a very keen fisherman and oyster grower and Matthew would occasionally run dad’s oysters on the menu and would specially prepare fish he caught on reef trips he often went on.” Neil Balnaves’ mansion hits the market MORE:last_img read more