Universities Superannuation Scheme sees year-end deficit top £11bn

first_imgThe scheme noted that the yield volatility had continued after the March date of the valuation, and that liabilities had fallen to £45.8bn by the end of June, although assets under management also declined by £700m from a peak of £38.6bn.It said: “There has been a high level of volatility in the scheme’s funding ratio in the months since March.“As at the end of June, the funding ratio had improved to 83%, which reflected a funding deficit of £7.9bn, with considerable fluctuation in the intervening three-month period.”Addressing its members, the scheme’s funding statement added: “USS has always taken a long-term view in its funding approach to the scheme, supported by the unique and enduring nature of many of the scheme’s sponsoring employers.“That said, these are undoubtedly challenging times, and the trustee board is working with the employers to review their ongoing flexibility to meet USS commitments in light of wider financial, economic and sectoral changes that might impact them.”It said the review would “inform” the trustee board’s future discussion with sponsors over the long-term funding proposals, set to be updated once the next triennial valuation in March 2014 has been finalised.According to the fund’s annual report, also released today, its investments returned £1bn over the course of the last year, while the assets’ £3.5bn increase in market value accounted for the remainder of the £4.5bn increase in investments.Over the course of the last year, the fund has noticeably increased its fixed income holdings, rising by 8 percentage points to 24% of total assets at the end of March.Its exposure to alternative investments and property remained broadly unchanged, while its overseas equity exposure fell by 4 percentage points to 2011 levels.However, the fund has noticeably de-emphasised domestic equity holdings despite several of its largest listed investments including UK-based companies.Since March 2011, its exposure to UK equities fell from 22% of assets to just 16%, despite a 1.2% stake in HSBC and a 0.79% stake in Vodafone. Volatile Gilt yields have seen the Universities Superannuation Scheme’s deficit increase to £11.5bn (€13.6bn) at the end of the most recent financial year, only to fall by £3.6bn in the following three months, according to its latest funding statement.The UK’s second-largest pension scheme said its funding ratio remained stable at 77% in the 12 months to March, but that the increase in liabilities – rising by nearly 15% – outpaced asset growth.The statement stressed that the £37.9bn scheme’s investments had performed well since the most recent triennial valuation in 2011, at which point actuaries measured a £2.9bn deficit.The two years since saw assets increase by £6.2bn to the end of March, while liabilities rose nearly £15bn over the same period to £50.1bn.last_img read more

Institutional investors move to increase ESG reporting from stock exchanges

first_imgHowever, many cite uncertainty of information as a barrier to sustainability reporting.The report submitted to WFE calls for three aspects to be harmonised, including the disclosure of material ESG risks faced by listed companies, a minimum standard for ESG information disclosure and improving access to information.The advocacy group said the global standard could see companies openly discuss their process for ESG risk determination, a better disclosure or ‘comply or explain’ mechanism, and simple navigation to an ESG disclosure index.Ceres said the exchanges should determine when it applied to listed firms, but recommended large caps comply almost immediately after the report is approved, with smaller-cap firms being given a reasonable timeframe for implementation.The submitted report was aided by the support of more than 100 institutional investors and backed by the world’s largest asset manager, BlackRock.Thomas DiNapoli, a New York State Common Retirement Fund trustee and state comptroller, said it was known that long-term growth required integrated ESG matters.“A global standard for sustainability reporting would give investors data to assess performance and risk, while allowing exchanges and companies to address specific market regulations and cultures,” he said.The report is now open for consultation, being run by the WFE, for investors and stock exchanges to comment.The proposal also received backing from the Principles for Responsible Investment, the Global Reporting Initiative and several other asset managers.Mindy Lubber, president of Ceres, said investors had long lamented the lack of disclosure and comparability.“The time has come for a broadly adopted sustainability disclosure standard – one that moves beyond voluntary approaches,” she said.“We look forward to the feedback from exchanges.” A team of an advocacy group, asset managers and institutional investors have joined forces to engage global stock exchanges to incorporate a uniform standard for sustainability reporting.The lobby, led by Ceres and supported by BlackRock, as well as a range of global institutional investors, has submitted a proposal to the World Federation of Exchanges (WFE).It aimed to increase harmonisation and disclosure of sustainability and environmental, social and governance (ESG) matters, across all stock exchanges.Ceres said the proposal was taken to the WFE as clients, and institutional investors, in general came under heightened pressure for responsible stewardship.last_img read more

Dutch roundup: Vervoer, KLM, Gazelle, Pon

first_imgElsewhere, with a return of 3.7%, the €2.2bn KLM pension fund for cabin staff was the best performing scheme of the three large schemes of the Dutch airline over the first quarter.The pension fund’s coverage ratio rose by 0.6 percentage points to 123.6%, equating to a real funding of 78.7%.The Stichting Pensioenfonds Cabinepersoneel KLM reported returns for fixed income, equity and property of 3.3%, 1.7% and 2.9%, respectively, while a 50% interest hedge contributed 1.4 percentage points to the total result.However, following rising equity markets, it lost 0.1 percentage points on its equity cover.Over the same period, the €6.6bn KLM scheme for ground staff achieved a return of 3% due mainly to the rising value of its bonds portfolio.Its interest hedge contributed 0.5 percentage points to the quarterly result of the Algemeen Pensioenfonds of KLM.According to the scheme, fixed income, equity and real estate returned 3.6%, 1.7% and 2.8%, respectively.It added that it was considering investing in existing funds of Dutch mortgage loans, as a way of diversifying its portfolio.Since year-end, the coverage ratio of the pension fund for ground staff rose from 122.1% to 122.8%.The €7.3bn KLM scheme for cockpit staff (Vliegend Personeel) reported a quarterly return of 2.5%, while its coverage rose by 0.5 percentage point to 133.3%.The assets of the KLM schemes are managed by Blue Sky Group.In other news, the €85m pension fund of bicycle manufacturer Gazelle has joined SPP, the €660m multi-company scheme of Dutch Volkswagen importer Pon.SPP was alreading managing the pension assets of the Stichting Pensioenfonds Pon Holdings (SPPH), the Stichting Pensioenfonds Geveke (SPG) and the surviving relatives scheme of the Stichting Pensioenfonds Pon.The Gazelle pension fund has approximately 1,875 participants in total, and was founded in 1927.Although it is part of the metal and electrotechnical engineering industry, it had been exempt from mandatory participation in the industry-wide metal scheme PME.The scheme said it decided to join the multi scheme for reasons of continuity, expertise and costs.The Pon multi scheme was established on 1 January 2012 to simplify joint operations, while allowing the participating pension plans to keep their own characteristics.An additional consideration was that, because of the ring-fenced assets within the multi scheme, the principle of solidarity between participants could remain limited to the individual pension plan, SPP said.The multi-company scheme has now approximately 10,550 participants in total.Following their respective collective labour agreements (CAOs), a large part of the Pon employees are participants of either metal scheme PME or PMT, the pension fund for the metalworking and mechanical engineering industry. Vervoer, the €15.7bn pension fund for the private road and waterways transport sector in the Netherlands, has reported a 6% return for the first quarter of 2014. Over the first three months of the year, its coverage ratio improved by 3.4 percentage points to 112.7%.Vervoer attributed the increase of its coverage to its 64.3% fixed income holdings and falling interest rates, as well as a positive return on its derivates to hedge the interest risk on its liabilities.The transport scheme, which has 624,000 participants in total, said its fixed income and equity holdings returned more than 3% and 0.7%, respectively, while property and infrastructure returned 0.7% and 2%.last_img read more

Dutch giant APG moves into Indian infrastructure financing

first_imgThe commitment from APG is its largest to Indian infrastructure so far and comes after the country voted in a new government seeking to promote greater foreign investment.Hans-Martin Aerts, head of infrastructure for Asia at APG, said: “The infrastructure sector in India is at an inflection point.“Given the strong push of the new government on sector revival through conducive policy measures, the funding from this strategic alliance will help infrastructure companies to recycle capital and contribute significantly to the further development of India’s infrastructure sector.”The platform will invest in rupee-denominated mezzanine instruments issued by infrastructure companies.The strategy will be to focus on infrastructure projects either operational or near completion in a bid to limit execution risk and to generate cash flows.Piramal has experience in providing mezzanine debt to companies, including infrastructure firms.Jayesh Desai, co-head of structured investment group at Piramal, said: “Indian infrastructure players have moved up in maturity scale as the portfolio of operational projects has increased and, hence, is lending high visibility to future cash flows.“Over $150bn of equity and mezzanine funding is required to meet government target investment of $1trn until 2017, and this is the gap our strategic alliance seeks to bridge.”Desai attributed the funding gap to constraints on commercial banks in India to “provide only senior-secured lending at asset level where there is limited headroom, especially in cases where there has been delay in project execution.”The partnership also follows a number of real estate joint ventures by APG in India.APG is already investing in hotels with Lemon Tree, housing with Godrej Group and, most recently, offices with Xander Group.Spokesman Harmen Geers said: “We will continue exploring new investment opportunities, predominantly joint ventures and co-investments alongside strong, like-minded partners.“If suitable opportunities continue to present themselves, we may look to expand such partnerships.” APG is to provide mezzanine financing for Indian infrastructure development, the latest step in an ongoing push into real assets in the country by the Dutch pensions giant.Indian conglomerate Piramal Enterprises and APG are entering into a joint venture to invest $1bn (€747m) over the next three years.Both parties have made initial commitments of $375m.A statement claimed that it was “one of the largest private sector commitments to the infrastructure sector in India” and “one of the single largest commitments to date by a foreign investor to the infrastructure sector in India”.last_img read more

Danica poaches PFA’s sales director Ellehave-Andersen

first_imgDanica Pension confirmed it is hiring Lars Ellehave-Andersen, the chief commercial officer of rival PFA whose departure was announced less than two weeks ago.Ellehave-Andersen is to spend the next 12 months as interim head of Danica Pension in Norway, and on August 1, 2016, will start work as the new commercial director (CCO) of the Danica group in Denmark, and become a member of its board.Danica declined to comment on media speculation that Ellehave-Andersen’s contract with PFA prevented him from moving to a competitor company within Denmark immediately.Per Klitgård, Danica’s managing director, said: “Lars has delivered solid results in his career.” He came to Danica with a thorough knowledge of companies on all levels and of labour-market parties, and could therefore bolster Danica Pension’s customer relations, he said.“Lars is ambitious and focused and that fits in well with Danica Pension,” he said.“I am convinced he is the right person to ensure Danica Pension exploits our closer cooperation with Danske Bank in the next few years, and our ever increasing focus on customers to strengthen our market position,” he said.Ellehave-Andersen has worked at PFA since 2006. Previous employers included PensionDanmark, Danica said.When Ellehave-Andersen takes up his job on the Danica group board in Denmark next year, he will replace Jesper Winkelman.Winkelmann will step down from the board on July 31, 2016, but remain at Danica Pension until the end of that year.He has worked at Danica Pension for 19 years, and had already been in the process of handing over his role to the next generation, Danica said.last_img read more

Hermes hires UK pension association’s stewardship policy lead

first_imgWill Pomroy, the Pensions and Lifetime Savings Association’s policy lead on stewardship, has left the industry group for a role at Hermes Investment Management.Pomroy joined Hermes Investment Management, the asset manager wholly owned by the BT Pension Scheme, earlier this month.In his new role, he will report to Leon Kamhi, head of responsibility, as part of the manager’s team in charge of developing the manager’s responsibility policies. Pomroy departs the association after more than three years as its policy lead for corporate governance and stewardship, joining the then-National Association of Pension Funds (NAPF) in May 2012. Prior to his time at the NAPF, he spent two years as part of Aviva’s public policy team, where he led on corporate governance and sustainability.For three years until 2010, he was senior parliamentary researcher for Labour party MP Madeleine Moon.The UK pension association has hired Luke Hildyard to fill the vacancy left by Pomroy’s departure, who was until last week the deputy director of the High Pay Centre, a think tank researching the impact of pay disparity between high and low-income roles in the UK.He has worked at a number of other UK think tanks in the past, including the Institute for Public Policy Research, the New Local Government Network (NLGN) and Future of London.At the NLGN and Future of London, he wrote about the role of green growth, authoring reports on the challenges posed by energy efficiency in real estate, and how local economies can benefit from green growth.last_img read more

Companies most likely to engage with Norwegian oil fund – survey

first_imgNorway’s Government Pension Fund Global is the most active of sovereign wealth funds (SWF) when it comes to engaging with listed companies, a survey by BNY Mellon has found.According to the bank’s annual investor relations survey, 65% of companies said they had been approached by or engaged with SWFs during 2015, up by 8 percentage points since 2013.It found that 42% of companies had contact with Norges Bank Investment Management (NBIM), responsible for Norway’s NOK7.1trn (€733bn) sovereign fund, once again ranking as the most active of SWFs captured in the survey.Singapore’s GIC approached 38% of respondents and the Abu Dhabi Investment Authority 30%. Fellow Singaporean sovereign investor Temasek Holdings came a distant fourth, with 18% of companies reporting correspondence with it, while 16% reported activity from the Kuwait Investment Authority.Christopher Kearns, chief executive of BNY Mellon’s depositary receipts businesses, said that while companies continued to build on existing engagement with companies, there had been an “interesting” shift in behaviour.“Responses indicate that, after a post-crisis period focused almost solely on investors amid intense competition for capital, companies now are devoting more time to other [investor relations] activities, such as board member involvement, enhancing senior managers’ visibility and improving relationships with analysts.”NBIM, one of the world’s largest asset owners, has stepped up its focus on corporate governance in recent years.It now publishes its voting intentions for select votes ahead of meetings, rather than simply disclosing how it voted after the fact.In 2014 alone, NBIM held 2,641 meetings with companies, voting at 10,519 general meetings.However, there have been calls for NBIM to be even more assertive in its engagement efforts.Speaking to IPE after the Norwegian Ministry of Finance indicated the sovereign fund could soon increase its equity allocation, Rob Lake, who in 2013 helped review the fund’s responsible investment (RI) strategy and led the RI team at Dutch pension manager APG, said the sovereign fund’s caution currently held it back.“Given their scale, a slightly more assertive position might be appropriate,” Lake said.“But it’s always a delicate balance for them because big public statements by an investor of that kind can be very destabilising – and that isn’t desirable either.”last_img read more

Nestlé’s Nürk to head up new Pensionsfonds division at Mercer

first_imgLast year, she helped establish the Nestlé Pensionsfond (NPF) as a cross-border vehicle, the first of its kind, which allowed employees of Nestlé’s Austrian business to join the vehicle.Nürk was previously managing director of publishing house Uhlenbruch and has worked at JP Morgan Asset Management and DekaBank, where she was responsible for institutional relationship management.She began her career at Deutsche Bank Research, after completing her doctorate.Uwe Buchem, Mercer’s head of retirement for Germany, Austria and Switzerland, said he was pleased to be able to appoint Nürk as head of the new division.“We are reacting to companies’ growing interest in using Pensionsfonds for the provision of retirement benefits,” he said.“I am convinced Dr Nürk, with her wide-ranging experience and know-how, will meet all requirements for our new offering to succeed.” Mercer has hired Bettina Nürk, who was formerly responsible for Nestlé’s pension funds in Germany, to lead a new division within the consultancy.Nürk, responsible for investment management and employee benefits while at the Swiss food company, began her new role at Mercer at the beginning of the month.She is to lead its newly launched consultancy for Pensionsfonds.At Nestlé, Nürk was in charge of the company’s German Pensionskassen, but also its Pensionsfonds.last_img read more

PIC buys £100m of debt to finance Yorkshire biomass power plant

first_imgThe debt has an eight-year maturity and is amortising.The plant has a contract for a difference (CFD) supported by the UK government; CFDs are agreements intended to provide greater certainty and stability of revenues to energy producers.Finnvera, Finland’s export credit agency (ECA), has provided a guarantee of the debt.It was highlighted as a rare CPI-linked transaction, with Macquarie noting that debt transactions in the ECA financing market typically paid fixed or LIBOR-based floating coupons.In the UK, inflation-linked debt – government and corporate – tends to be linked to the Retail Prices Index (RPI) rather than the CPI, at least as concerns public deals.Elizabeth Cain, debt origination analyst at PIC, said: “This investment is not only an important piece of UK infrastructure but also provides a high-quality, long-dated debt investment to support payment of pensions as part of our prudent investment strategy.“It also represents one of a small number of CPI-linked transactions in the market, which PIC has been at the forefront of developing with a view to supporting UK pension schemes seeking to transfer their CPI-linked liabilities.”A spokesman for PIC told IPE it was aware of only three other public CPI-linkers, including a 2015 secured debt issue, in which PIC invested, to finance retirement housing for the Church of England.Macquarie noted that the CPI-linked indexation formula used in the Teesside transaction hedges the energy plant’s CPI-linked revenues under the UK’s CFD regime.PIC last year invested £75m in airline debt issued by Virgin Atlantic Airways. Earlier this year, it announced its involvement in a £40m social housing debt deal. The UK’s £18.4bn (€21.4bn) Pension Insurance Corporation (PIC) has bought £100m of debt that will go towards a renewable energy plant in the north of England, with the debt structured as a rare Consumer Prices Index-linked transaction.The debt issue raises financing for the construction of Teesside Renewable Energy Plant, in Yorkshire.It is planned to be a 299-megawatt wood chip and pellet-fuelled power station to generate electricity for the equivalent of 600,000 homes, 24 hours a day.Macquarie Specialised Investment Solutions (MSIS) structured the deal, with the pensions insurer buying the entire £100m tranche.last_img read more

Wednesday people roundup

first_imgCandriam Investors Group – The €100.1bn asset manager has appointed Isabelle Cabie as global head of responsible development and Wim Van Hyfte as global head of responsible investments and research. They will report to CIO of investment management at Candriam, Vincent Hamelink. Cabie will be in charge of developing Candriam’s active ownership strategy, leading its corporate social responsibility policy, and promoting socially responsible investing (SRI). She has over 20 years of experience in macroeconomics, institutional portfolio management, and sustainable and responsible investments. Van Hyfte transfers from the quantitative team at Candriam, where he was senior fund manager and SRI specialist, co-managing over $3bn (€2.79bn) in global SRI quant equity funds and segregated accounts. Together with his team of SRI research analysts he will create new ESG products and investment solutions. The asset manager is planning to hire two analysts in 2017 to grow its SRI team.AP3 — Joakim Blomqvist has been hired by Sweden’s AP3 to the role of senior manager in its Alpha Management division. He started the job on 9 January. Blomqvist joined the pensions buffer fund from SEB Markets, where he was responsible for global sales of corporate bonds, among other things. He has also worked at Nordea Markets, insurance company If, Connecta, and JP Bank. At AP3, Blomqvist will have responsibility for a global bonds absolute return mandate. GlaxoSmithKline — Head of benefits at the British pharmaceutical giant, Moira Beckwith, has left to join Capital Cranfield, an independent trustee company. She is one of four new client directors, alongside John Nestor, Paul Black, and Andy Scott. Nestor serves on the trustee boards of several UK pension funds, including Prudential and the RAC. Black joins from consultancy firm Lane Clark & Peacock where he was an investment partner. Scott joins from Punter Southall where he had spent 20 years, and founded its independent trustee business.AFG – Virginie Buey has been appointed international development manager at the French asset management association. She will be responsible for promoting the French asset management industry in France and abroad. She previously worked at NN Investment Partners, where she was head of marketing and communication for France.GMO – The US-based asset manager has named Scott Hayward as its next CEO, effective from 13 February. He replaces Peg McGetrick, interim CEO since July last year, who took the role following the resignation of Brad Hilsabeck. Hayward joins from Quantitative Management Associates, where he was chairman and CEO.GMO has also hired Andy Martin from Cambridge Associates as head of investment teams, a newly created role. At Cambridge, where he spent 10 years, Martin was managing director in the non-profit practice and global head of hedge fund research. The asset manager plans to launch a series of products and strategies focused on climate change this year, GMO said in a statement.Aon Hewitt – The consultancy giant has hired William Parry from Xerox, formerly Buck Consultants, as a senior consultant within its fiduciary management arm. At Xerox, Parry led its fiduciary management oversight operations, helping pension funds assess and appoint fiduciary managers. In his new role, he will focus on services for larger pension schemes of £1bn or more.Tax-Incentivised Savings Association (TISA) – Stephen Gay has been named policy team manager, and Renny Biggins has been appointed pensions technical officer for the UK lobby group. TISA said the new arrivals would form part of its “development plan”, aimed at extending and refocusing its policy reach. Gay has held senior roles at the Association of Independent Financial Advisers and the Association of British Insurers. Biggins has worked at mutual insurer Royal London, pension provider Suffolk Life, and fund administrator IFDS over a 25-year career.Robeco – Graham Elliot is to join the asset manager’s Hong Kong office in a new role as head of Asia Pacific and the Middle East distribution. He has worked at Robeco since 2011, most recently as country manager and head of sales for the Middle East and Africa. He will keep these responsibilities “on an interim basis”, Robeco said.HSBC Securities Services – Tim Wood is to lead the banking giant’s custody business in the UK from 28 March. He joins from RBC Investor and Treasury Services, where he has worked since 2002. RPMI Railpen, Standard Life Investments, Candriam, AP3, SEB Markets, GMO, QMA, Cambridge Associates, Aon Hewitt, Xerox, TISA, Robeco, HSBC Securities ServicesRPMI Railpen – Standard Life Investments has poached RPMI Railpen’s head of sustainable ownership. Deborah Gilshan will leave the UK’s £25bn (€29bn) pension fund for railway employers at the end of March. At Standard Life Investments, Gilshan will be governance and stewardship director.Chris Hitchen, Railpen CEO, said Gilshan had “helped us evolve our thinking on sustainable ownership and what this means for us as a long-term asset owner”.Gilshan said of her forthcoming role: “It is really exciting to be joining at a time when environmental, social, and governance [ESG] considerations continue to increase in significance for investors, companies, regulators, and wider society.”last_img read more