BNP Paribas Investment Partners – Marc Fleury has been appointed head of sales for the corporate and endowments department, while Anne Dille‐Weibel has been given the role of head of sales for the insurance department. Katherine Simons has also been hired as head of global RFP (request for proposal). Fleury started work at BNP Paribas in 2007, where he was head of the sales team at the bank’s indexed and systematic investment arm THEAM. Dille-Weibel has most recently been responsible at BNPP IP for co-ordinating sales to insurance companies internationally. Simons has previously worked at Franklin Templeton, where she ran the company’s global RFP activity.Bank J Safra Sarasin – Karsten Junius joined Bank J Safra Sarasin as chief economist. Before, he was principal economist at the International Monetary Fund.Partnership – Costas Yiasoumi has been hired by specialist insurer Partnership as director of defined benefit solutions. He was previously head of longevity solutions at Swiss Re and executive director at JP Morgan Chase.Hermes Fund Managers – Michael Russell is joining Hermes Fund Managers as deputy portfolio manager of Hermes US Small and Mid Cap Equities. Russell comes to Hermes from a job as senior portfolio manager of the global developed markets equity funds at Nomura Asset Management.British Private Equity & Venture Capital Association (BVCA) – Tim Farazmand is to take over as chairman of the BVCA from this month, the association said. He is the managing director at LDC. He will replace the previous chairman Simon Clark. Lloyds Bank – Rob Carruthers has been appointed to the new position of business development director for financial institutions in the UK regions. Carruthers has been working at Lloyds Banking Group since 2009 and has previously worked at Commonwealth Bank of Australia, CIBC World Markets and Scotiabank.HSBC Global Asset Management – Nacho Font has been appointed by HSBC Global Asset Management to represent the company’s smart-beta investment activities to internal and external clients. He joins the company from Japanese asset manager DIAM International, where he was a business development manager and equity product specialist. Stephen Tong has been hired to take charge of the HSBC Global Asset Management’s global equities activities, having previously worked at Vontobel Asset Management as managing director and head of emerging market portfolio management. Emmanuelle Harboun and Yasmina Slimani have also joined HSBC Global Asset Management on the UK-based product specialists team, and Apiramy Jeyarajah has been hired in the new role of senior product development manager on the asset manager’s passive investment product range.Waverton Investment Management – Ian Enslin has been appointed to the charities team at Waverton Investment Management. He will focus on managing segregated, multi and single asset class investment mandates. Enslin joins from Newton Investment Management, where he managed similar strategies for charities and institutional investors. PPF, LD, EIOPA, BNP Paribas, Safra Sarasin, Partnership, Hermes, BVCA, Lloyds Bank, HSBC GAM, WavertonUK Pension Protection Fund – Elaine Wiscombe has been appointed by the Pension Protection Fund as its new head of operations for its new in-house member services function. She comes to the PPF from Aon Hewitt, where she was a client relationship manager. Before then she was an operations manager for Ensign. Lønmodtagernes Dyrtidsfond (LD) – Peter Engberg Jensen has been appointed to the board, replacing Hans Ejvind Hansen, who has decided to step down, the pension fund said. Engberg Jensen, who joined the LD board yesterday, was managing director of Nykredit from 2006 until September last years.European Insurance and Occupational Pensions Authority (EIOPA) – Alberto Corinti, executive board member of the Istituto per la Vigilanza sulle Assicurazioni, has been appointed by EIOPA as a member of its management board.
A group of investment and pension fund managers have called upon investment firms to up their game when it comes to responsible investment if they are to maximise opportunities and improve long-term returns.The report – The Value of Responsible Investment – says that with better reporting, research and a stronger tie between ESG and fiduciary duties, investment managers should take the lead when it comes to influencing the economy, environment and society.It was backed by 11 investment managers with assets under management totaling $5trn (€3.6trn), making up the the Investment Leaders Group (ILG) of the University of Cambridge Institute for Sustainability Leadership.The report says that responsible investment should be at the heart of fund strategies and processes. It also called for better research on the risks generated by environmental ‘megatrends’ and the drag on economic performance. In addition, the report calls for standardised reporting for environmental and social impacts, as well more use of long-term mandates and a better alignment of ESG and fiduciary duties.“While short-term investment strategies can play an important part in an asset owner’s portfolio, providing diversification and liquidity, they can also lead to asset mispricing, bubbles and consequent price crashes, undermining long-term economic development and investment,” the report says.Philippe Zaouati, CEO at Mirova, and chair of the ILG, added: “In spite of a widespread rhetorical commitment to responsible investment principles, market dynamics remain pre-occupied by the short-term, and the majority of investment does little to answer the challenges of our time.”The ILG said investment firms should also scale up capital allocation to the technologies, infrastructure and business models of a future low carbon, green economy. This would depend upon solid investment principles and clear enabling actions from policy makers.Jake Reynolds, director of business platforms at CISL, said: “In a world that neglects to account for social and environmental costs on corporate balance sheets, costs we know can ultimately impact value, responsible investment can be seen not only as a smart investment strategy but as an essential response to growing sources of systemic risk.”A report by Standard & Poor’s (S&P) recently also found that companies should do more to assess their climate event risks.With extreme storms, flooding, heat waves and cold snaps, companies are under pressure to identify, quantify and disclose material risk related to such events.Investors are starting to see the impact of carbon pricing on corporate profitability, but less attention is being paid to the effects of climate events on a company’s business and financial risk profile, S&P argued.This ties in with the findings of the ILG report, pushing for companies and investors to take a closer look at responsible investment.The ILG currently comprises 11 investment institutions: Allianz Global Investors, Aviva Global Investors, First State Investors, Loomis Sayles, Mirova (Natixis Asset Management), Nordea Life & Pensions, PensionDanmark, Pimco, Standard Life Investments, TIAA-CREF Asset Management and Zurich Insurance Group.
Previously, the state secretary hinted that she would propose the introduction of only parts of the new FTK on 1 January.Last week, Roos Vermeij, MP and spokeswoman on pensions for the labour party PvdA, acknowledged that the reading of the FTK proposals was unlikely to take place before Parliament’s summer recess.“The review will be held in the autumn,” she said, noting that the Senate also needed to approve the bill.However, Vermeij added that she still expected the full proposals to be presented to Parliament before this summer.The details of the draft legislation – including any changes relative to previous proposals – remain unknown.However, given that Klijnsma has advocated the introduction of at least parts of the FTK on 1 January, the sector has assumed the new framework will differ little from the current FTK. Otherwise, the deadline for implementation would be far too tight, experts say.They have suggested a partial FTK introduction could be achieved by exempting pension funds from applying rights cuts in 2015, for example, following a funding shortfall in 2014.Last year, the Pensions Federation argued that the introduction of new legislation of the FTK’s scale and scope would require a full year. The Netherlands’ new Financial Assessment Framework (FTK) is facing further delays and will not be reviewed in Parliament before the summer, Jetta Klijnsma, state secretary for Social Affairs, has confirmed to IPE sister publication FD-IPNederland.Due to the latest delay, the scheduled full introduction of the financial rules on 1 January 2015 is no longer feasible, Klijnsma said.At present, the Raad van State, the highest legal college in the Netherlands, is still assessing the legal ramifications of the draft legislation.Its views were expected a week ago.
Figures in the report came from a survey of 81 market participants, Setter Capital said, grossing up the results in proportion to the number of active buyers that did not participate.Private equity accounted for most of the volume in the first half, at $16bn, which included $11.3bn for funds and $4.6bn for direct investments.Trading volume of real estate funds was $3bn and hedge fund volume was $2.2bn, while trading in infrastructure funds totalled $500m in the period.More than half of the total volume was in North American-focused funds, and Western European funds accounted for 31% of total volume.Some 40% of secondary market volume in the first half of 2014 was from European buyers, and 43% from European sellers, the report showed.According to volumes projected for the second half of this year by survey respondents, the total volume for the full 2014 year is set to reach $45bn – a rise of 25% from 2013.It said the figure of $22bn represented the volume of secondary purchases of the 126 secondary buyers that had been involved in the market for a long time, including 87 secondary funds, 33 funds of funds, 12 hedge fund focused secondary funds, 12 investment consultants, two pensions and one insurance company.Setter Capital said: “This estimate is conservative, as it does not include the activity of more than 1,000 opportunistic and non-traditional buyers, whose combined activity may be significant.”For example, it said, activities of all sovereign funds had been excluded, even though some of these funds had recently built teams dedicated to secondary purchases. The secondary market for alternative investments has grown by 47% in 12 months, reaching a volume of $22bn (€16.4bn) in the first half of this year, according to a new survey.In its latest report on the secondary market for alternatives – on which closed-end funds and direct investments in private equity, real estate and infrastructure, as well as hedge funds, change hands – Canadian secondaries broker Setter Capital said January to June had been the market’s busiest period so far.In its 2013 report on the first half of that year, Setter Capital estimated total secondary market volume had been $15bn. The firm said more and more investors were becoming permanent fixtures on the secondary market, seeing it as an important portfolio management tool.
New Europe-wide risk-evaluation rules for pensions must be drafted before a revised IORP Directive passes into law, after EU member states rejected the idea of their later insertion by the European Insurance and Occupational Pensions Authority (EIOPA).The member states also called for greater flexibility for cross-border pension provision and suggested paring down the previously detailed regulation for a universal pension benefit statement (PBS).The new compromise draft of the Directive was drawn up in consultation with member states by the Italian government, which currently holds the rotating presidency of the Council of the EU.The draft, discussed by member states at a meeting earlier this week, sees details of the risk evaluation for pensions (REP) significantly expanded – running nearly four pages compared with the initial draft’s one. The new proposals outline that the REP should be undertaken at least every three years but retains wording that funds should also complete one “without delay” when the fund’s risk profile changes.It further details how the REP should contain a profile of the fund’s longevity, market, credit, liquidity and “other material” risks.However, the proposal that a qualitative assessment of climate change or resource risks should be part of the REP has been dropped, while a broader provision that all emerging risks “that could have an impact on the institution and its members and beneficiaries” has been included.It is likely that the proposal for a more prescriptive REP within the legislative draft is to avoid the need for a later delegated act, which would allow the Commission to lay down the detail of the rules without European Parliament scrutiny.As a result, the suggestion that a delegated act is required has been cut, alongside wording that the act would not seek to “impose additional funding requirements beyond those foreseen in this Directive”.The wording was meant to assuage fears the act, on which EIOPA would advise the Commission, would impose capital requirements akin to those contained within Solvency II.EIOPA has not been completely removed from the draft, with the final clause of the REP requirements saying the pension supervisor should work closely with its fellow European supervisors to ensure the consistency of any risk assessment guidelines.Notably, the presidency’s proposals also remove requirements that cross-border IORPs be funded “at all times” – an attempt to make cross-border provision easier, as proposed in at least one draft of IORP II prior to publication in March.Instead, the compromise draft now only requires full funding of liabilities when the cross-border activities commence, with permission for a recovery plan to be filed with the host state’s regulator in line with local requirements.Theoretically, this could allow a cross-border vehicle to be established with a limited number of members, fully funded, while allowing for the later transfer of further members.However, Mark Dowsey and Dave Roberts, consultants at Towers Watson in the UK, doubted that the cross-border wording would remain.“We would be surprised if this particular element of the wording survives the legislative process,” they said.Both noted that those previously opposed to more relaxed funding for cross-border vehicles would be likely to try to have the amendments removed.Changes were also suggested to the PBS, fiercely opposed by the Dutch and Finnish industries, as well as Dutch lawmakers.The requirement for the PBS be two A4 pages has been replaced with a requirement that it be “written in a concise way”.Dowsey and Roberts said the revised PBS allowed for greater member state discretion, while removing the requirement to disclose much of the detail that would have made a two-page statement difficult – such as past performance and investment data for defined contribution funds.Despite the changes, they said the Directive should still achieve the Commission’s goals, without imposing unnecessary costs. “The presidency’s proposals are, broadly, a better fit than the original for that objective,” they said.“[We] don’t think it dilutes the potency of it – it takes out some of the proposals that are less workable, or appear initially to just impose additional and unnecessary costs.”The changes tabled by the Italian presidency are only the first step in agreeing a final draft of the IORP Directive, with several more revisions likely.As a result, the member states are unlikely to settle on a final draft to present to the European Parliament before Latvia assumes the six-month rotating presidency in January 2015.
Proposals to reform Germany’s pension system could create an artificial division within the occupational pensions market, something that must be avoided at all costs, according to the chairman of the country’s pension association (aba).Heribert Karch, speaking at the aba annual conference, said Germany needed to avoid creating a legislative framework that could result in needless competition over the terms of collective bargaining agreements that would see proven providers left behind.“We do not want that, and we must avoid such a split,” Karch said. “It is therefore important companies can still set terms, not only parties involved in collective bargaining agreements.”His comments came after German minister for Labour and Social Affairs Andrea Nahles said the government would consider a number of changes to its reform proposals that would introduce industry-wide defined contribution arrangements. Karch said: “If you do not take into consideration the whole of the [pension] system, then the reforms will only amount to a paper tiger, and none of us wants that to happen.“We do not want a race between those now called onto the stage and those who have proven themselves – and vice versa.”Karch insisted on the importance of ensuring all aspects of the pension system are fully thought out before any proposals are passed into law – particularly highlighting the matter of benefit protection schemes and tax incentives, a topic outside of Nahles’s remit at the Ministry for Labour and Social Affairs (BMAS).In her speech at the conference, Nahles challenged the industry to come up with other ways of protecting benefits.The reforms would see the direct benefit protection offered by employers severed, resulting in BMAS suggesting that benefits could be protected by the Pensions-Sicherungs-Verein (PSV), but the suggestion has not been welcomed in all quarters.Evylin Still, head of occupational pensions at Volkswagen, noted at a later panel that requiring the PSV to step in and protect benefits provided by the new industry-wide DC funds would see it take on an additional role.At present, she stressed, the PSV currently stepped in when there was a company insolvency endangering the benefits provided by Pensionsfonds or book reserve arrangements.“As I have currently understood the debate,” Still said, “we [PSV levy payers] would in future also have to insure against a capital market investment not working out. That is a completely different type of risk.”
National regulators, however, would cover other areas, such as how to oversee the decumulation phase.The consultation also suggested the launch of PEPPs would support the development of multi-pillar pensions in countries yet to establish strong second-pillar systems.EIOPA outlined a number of high-level investment principles it felt should apply to all PEPPs, including a de-risking strategy – such as a lifecycle fund – for default strategies where contributions were not guaranteed.It said: “Assets should be selected with a view to the most efficient liquidity profile over the longer term, including the potential participation in longer-term investments as appropriate to the investment horizon and payout profile of the PEPP, including, as appropriate, infrastructure and other similarly illiquid investments.”The supervisor also suggested PEPPs should have a limited number of investment options, where the provider has responsibility for reviewing holdings.“If an investment option contains a guarantee, the PEPP provider is not required to apply a life-cycling strategy to that investment option,” it said.“However, a duty of care would still apply to ensure the PEPP does offer value for money and sets an investment strategy that offers an appropriate exposure to risk premium for long-term investment.”It added that a long-term investment horizon could be achieved by pooling all member assets into funds where smoothing of returns was applied, allowing for the provider to access the premium associated with certain less liquid assets.EIOPA stressed that high-level investment principles should be the only limits on a provider’s ability to design investment options, to ensure they have “sufficient freedom when developing the different investment options”.The consultation, which concludes on 5 October, follows on from a discussion paper on PPPs in early 2013 and a preliminary report in 2014. A Europe-wide personal pension regime would require default products to guarantee contributions or need to be based around a lifecycle fund, according to proposals by the European Insurance and Occupational Pensions Authority (EIOPA).In a consultation paper, the supervisor noted that while it had initially considered the introduction of a passport system to accredit all personal pension products (PPPs), it would focus on introducing a second, parallel PPP system that met certain minimum standards.EIOPA previously referred to such an approach as the 29th regime, a term also used by the European Commission when it championed the development of the PPP market in its recent green paper on the Capital Markets Union (CMU).The consultation suggested that the goal of a Pan-European Personal Pension (PEPP) system would be to deliver value for money for consumers through economies of scale as providers operated across national borders.
Asset levels in Finnish earnings-related pension schemes fell by €1.3bn in the second quarter to stand at €182.9bn at the end of June, as share prices fell and pension payouts overtook contributions, according to data from the Finnish Pension Alliance TELA.The amount of assets held in equities and equity-type investments dropped to €87.6bn at the end of June from €90.2bn at the end of March and shrank as a proportion of overall assets to 47.9% from 49%, the analysis showed.Fixed income investments grew over the same time period to €78bn, or 42.7% of overall earnings-related pension assets, from €77bn, or 41.7%.Property investments were unchanged in absolute values overall from three months before at €17.1bn, though they increased slightly as a proportion of all assets to 9.4% from 9.3%. TELA analyst Peter Halonen said: “This development has been affected by the fact pension costs are now higher than pension revenues – i.e. pensions now being paid out are more than the amount workers and employers are paying in as pension contributions.”He said, on top of this, the pension providers are facing a challenging investment environment, with returns diminishing as the year progresses.“In particular, share prices have fallen in the second quarter,” he said.However, the value of pension funds’ assets has been growing steadily, having quadrupled over the past 20 years, despite dips in 2008 and 2011, TELA said.TELA chief economist Reijo Vanne added that, while investment returns will cover part of the financing of pensions in Finland, the level of pension contributions is the more important factor.“The financial stability of the earnings-related pension system requires long-term contributions on the level agreed within the pensions reform, and the preparation for this is already in place,” he said.Under the terms of the Finnish pension reform, contributions within the earnings-related pension system are expected to stabilise at 24.4% from 2017 onwards, Vanne said. “This secures the financing of future pensions.”
The recently established €100bn asset manager Achmea Investment Management has launched a recruitment drive to attract 35 new staff to expand the company.Achmea IM, which now has 200 employees, is aiming to become one of the three largest asset managers in the Netherlands, according to Rogier Krens, director of asset management.In its campaign, the manager describes itself as “a €100bn start-up that has set up a kick-start project”.“We have opted for this approach,” Krens said, “because we consider ourselves a new company.” Last year, Achmea IM was created through the merger of Syntrus Achmea Asset Management, Achmea’s retail asset management branch and the department that manages assets on behalf of the insurer.Achmea IM established its head office in Zeist as the role of asset management within the company has increased.Krens said it anticipated significant growth through its general pension fund (APF), run by insurer Centraal Beheer, part of the Achmea Group.He added that Achmea IM also expected to receive more mandates from the insurer, having already been granted mandates for the management of government bonds and the selection of external asset managers.Krens said Achmea IM sought to attract asset managers and new expertise with its launch campaign.“We are new,” he said. “We do new things and have an open culture, and we think this will be a breath of fresh air for people in more hierarchical companies.”At present, Achmea IM has seven vacancies for positions in credit, high yield and business development, it said.
“The investments in the emerging markets, in particular, generated healthy returns, both on equities and fixed income portfolios,” Viherkenttä said.Liquid fixed income instruments generated a return of 4.9%, and listed equities produced 4.1% during the third quarter.VER said its average rate of return for the past five years was 7.7%, and 4.6% for the past 10 years.Total assets rose to a market value of €18.5bn at the end of September, up from €17.9bn at the end of December last year.Fixed income instruments accounted for 48.1% of the fund’s overall assets, and equities for 42%. Viherkenttä said the third quarter had been characterised by a strong recovery in equity markets as the uncertainty created by the Brexit vote was quickly replaced by new optimism.“Investors are focusing on issues related to political developments both in the US and Europe – along with ever-present central bank speculations,” he said. Between January and September, VER’s premium income of €1.14bn was outweighed by the €1.34bn that was transferred to the government budget.VER is required to contribute 40% of the state’s total pension spending to the government’s annual budget, with the amounts to be transferred increasing continuously in absolute terms with the growth in pension spending. Finland’s State Pension Fund (Valtion Eläkerahasto or VER) reported a marked acceleration in year-to-date investment returns between July and September, helped by a surprisingly high return on its fixed income investments over the period.Reporting interim financial figures, VER said investments returned 4.4% in the first nine months of the year, with the return in the third quarter alone at 3.5%.Timo Viherkenttä, VER’s chief executive, said: “What in particular exceeded expectations was the 5% return on fixed income instruments as interest rates kept falling and risk premiums decreasing.”He described the pension fund’s overall return as sound and said it had been generated more or less equally by all asset classes.