“During this period,” said Elco Brinkman, supervisory chairman of APG, “Kemna has considerably increased simplicity and transparency in the investment process, and has combined this with solid returns for our customers.”He added that APG’s assets under management had increased from €200bn to €375bn under Kemna. The €375bn asset manager APG has appointed its current CIO Angelien Kemna as its new chief finance and risk officer, as of 1 September.She will succeed Peter Kok, who has held the position on a temporary basis during the past 10 months.Kemna is to be succeeded by Eduard van Gelderen, currently capital markets CIO at APG and Kemna’s co-director at APG Asset Management.Kemna has been CIO at APG for five years.
Sweden’s first national pensions buffer fund AP1 has selected MSCI to provide risk-analysis services after a public tender process.MSCI said the SEK296bn (€31.8bn) pension fund had chosen it to provide the full range of risk analytics, including stress testing, statistical analysis, data visualisation and risk reporting.Kaj Martensen, COO at AP1, said: “We are delighted to be working with MSCI and believe their powerful, multi-asset-class risk platform supports AP1 by providing an integrated view of risk throughout decision layers.”MSCI said it first worked for AP1 in 2011 when the company was chosen to provide ESG ratings for equities and fixed income for the fund. In other news, a Scandinavian pension fund is using IPE Quest to search for managers to take on two high-yield bond mandates – one for US bonds and the other for European bonds.In search QN-2167, the unnamed pension fund is looking for one manager of US high yield, for a mandate expected to be around $300m (€273m). According to the search, the successful manager should be capable of achieving performance higher than the BofA Merrill Lynch US High Yield Master II Constrained Index, independent of the market and investment style.The pension fund said the selected manager or managers must be willing to set up a segregated account.The mandate is to include US high-yield products that are actively managed.All types of investment approach and style will be accepted.The pension fund said the expected excess return target was 1-2% a year, with a “suitable” tracking error.It said it preferred products with a track record of at least three years.Via a second search, QN-2168, the pension fund is searching for a manager to run a mandate of approximately €150m in European high yield.The selected manager should be able to outperform the BofA Merrill Lynch European Currency High Yield Constrained Index, independent of the market and investment style.Similarly to the US mandate, the selected manager or managers must be willing to set up a segregated account, which should include actively managed pan-European high-yield products but no leveraged loan products.The deadline for responses to both searches is 23 March.The IPE news team is unable to answer any further questions about IPE Quest tender notices to protect the interests of clients conducting the search. To obtain information directly from IPE Quest, please contact Jayna Vishram on +44 (0) 20 3465 9330 or email [email protected]
National regulation requiring disclosure of material climate risks should be a priority for the G20, according to major European and US pension funds and other institutional investors with more than $13trn (€11.5trn) in assets under management. The recommendation is one of several that the group of investors, which include the $293bn California Public Employees’ Retirement System (CalPERS) and major European asset owners such as the Swedish buffer funds, €183bn Dutch asset manager PGGM and the UK’s £50bn (€68bn) Universities Superannuation Scheme (USS), have set out in a climate change-focused letter to the governments of the world’s 20 largest economies (G20).Citing the landmark agreement reached at the UN climate change conference (COP21) in Paris in December 2015, the investors said that significant investment is needed to achieve the goals of the Paris agreement and that governments “have a responsibility to work with the private sector” to ensure this is catalysed.To that end, according to the investor group, the G20 should, among other steps, “prioritise rulemaking by national financial regulators to require disclosure of material climate risks”. They cited the work being done by the Task Force on Climate-related Financial Disclosure (TCFD) of the Financial Stability Board (FSB), and asked the G20 to consider the task force’s recommendations, due in December 2016, “as inputs towards any rulemaking” by national financial regulators.The TCFD is developing a framework for voluntary climate-related financial disclosure by companies, and is due to present a final report for consultation by the end of December.In their letter, the investors also called for the G20 to “support a doubling of global investment in clean energy by 2020”, saying the private sector needs policy support to achieve this goal, and for the governments to implement previously issued investor recommendations for action such as the introduction of “stable, reliable and economically meaningful carbon pricing” and the phasing out of subsidies for fossil fuels.The letter, which was co-sponsored by investor organisations such as the UN-backed Principles for Responsible Investment (PRI) and the Institutional Investor Network on Climate Change (IIGCC), comes in the lead-up to a summit of G20 leaders in Hangzhou, China, in early September.The investors also want to see “green finance” on the agenda of the summit, specifically conclusions drawn by the G20’s green finance study group.“We request that the green finance agenda be taken forward by future G20 presidencies,” the letter states.It comes after the UK’s Institute and Faculty of Actuaries (IFoA) earlier this week announced it has signed a letter to the G20, urging the governments to phase out fossil fuel subsidies.
UK-based asset manager M&G is planning to transfer four of its funds to Luxembourg to remove uncertainty for non-UK investors ahead of the country exiting the EU.The funds are worth a combined €7bn and are offered exclusively to non-UK investors, despite being domiciled in London.Anne Richards, chief executive of M&G, said: “With little clarity yet on the outcome of the negotiations between the UK and the rest of the European Union on its future trading relationship, we believe it is prudent to take action now to protect the interests of our international customers.“The proposals to transfer the assets of these four funds have a primary aim – to minimise disruption for our investors. Approval of the transfer will ensure they retain access to the same strategies and the same fund managers.” Luxembourg’s regulator, the Commission de Surveillance du Secteur Financier, and the UK’s Financial Conduct Authority have both given the transfer the green light. The proposal will be put to investors in the four funds in September with a view to moving the assets to the fund manager’s existing SICAV in November, according to a statement from M&G.The four funds affected are:M&G Dynamic AllocationM&G Income AllocationM&G Prudent Allocation (to be renamed M&G Conservative Allocation)M&G European Inflation Linked Corporate BondData from trade body the Investment Association (IA) showed that non-UK investors had £73.7bn (€83.5bn) invested in UK-domiciled funds managed by IA members at the end of April. Meanwhile, UK investors had £107.7bn invested in non-UK domiciled funds. Ireland and Luxembourg are the primary homes for these funds.Earlier this year, David Suetens, managing director of State Street in Luxembourg, told IPE there could be “some re-shuffling of products and investors” ahead of the outcome of the UK and EU negotiations being known. State Street helped M&G set up its Luxembourg operation.Suetens said: “Promoters will most likely re-direct EU investors to EU-based vehicles and keep OIECs [UK investment vehicles] as local distribution products. This said, to the extent regulatory frameworks for funds remain comparatively equivalent between the UK and the EU, and consumers are still allowed to purchase cross border… the choice ultimately will still reside with the investor who will set the course.”
The Bulgarian Association of Supplementary Pension Security Companies (BASPSC) disputed the ministry’s interpretations and model assumptions.The current pension contribution rate increased by 1 percentage point this year to 19.8% of wages, of which 5% goes to the second pillar UPFs.There is a maximum monthly insurance ceiling, currently set at BGN2,600 with a 2% annual increase, above which taxes are due but no further pension or health insurance contributions are paid.One point of dispute is that the ministry’s long-term projection of an 8% annual increase in wages, leading to a similar increase in the average insurable income, would by 2037 result in the latter exceeding the maximum insurable ceiling, while at the same time exaggerating the expected pension paid by the first pillar.Overall the contributions cover less than 48% of current pensions expenditure, with the rest coming from taxes.According to the BASPSC’s calculations, based on NSSI figures, the average real contribution rate to the pay-as-you-go first-pillar system amounted to 30% in return for a pensions income roughly equal to 41% of the working wage.The BASPSC pointed out that, by the ministry’s own calculations for younger workers, those with 40 years of service would receive a 20% pension income from UPFs, despite the lower contribution rate.Other discrepancies included the ministry’s use of a 5% contribution fee throughout its projections, even though this has been lowered to 4% for 2018 and will fall to 3.75% next year. The ministry also failed to take into account the increase in the retirement age, to 65 years for both men and women, according to the BASPSC.The main issue, however, was the ministry’s use of average accumulated sums in pension funds.According to Bulgaria’s Financial Supervision Commission, the country’s regulator for pensions and other non-banking financial services, there were around 3.7m registered as UPF members at the end of 2017 – some 1.35m more than those actually contributing according to NSSI data. The difference was attributed largely to the high level of economic emigration.Payout proposalsDespite the dispute, Bulgaria is moving closer to finalising payout schemes for the country’s second-pillar pension system.In its draft legislation, the ministry has proposed three types of payouts: a one-off lump sum, scheduled withdrawal, and lifetime (annuity) provision. It has also put forward the possibility of combining two or three provisions to diversify pension incomes.Unlike the government’s last attempt to address payouts, in 2016, when it proposed and then shelved the idea of a common asset pool for second-pillar pensions, the latest version has proved relatively uncontroversial.Notwithstanding its criticisms, the BASPSC has welcomed the payout proposals, including the programmed withdrawals and the provision of lump-sum payments, which it described as the correct solution for those members who were not able to accumulate sufficient sums as a result of a short period of fund membership, absence due to emigration, or their working in the ‘grey’ economy.It suggested more options for inheritability of pensions, as well as the establishment of a principal guarantee to protect at least the value of nominal contributions. A majority of Bulgarian citizens retiring between 2021 and 2037 will receive a pension of €26 or less despite reforms aimed at boosting savings, according to projections from Bulgaria’s labour and social policy ministry.The ministry’s analysis of projected pension income – published alongside draft legislation for new types of pension payouts – showed that 70% of the first cohort of Universal Pension Fund (UPF) pensioners, retiring between 2021 and 2037, would receive a monthly pension of BGN50 (€26) or less, while only 10% would get more than BGN100.Meanwhile, according to the ministry, payments from the first-pillar National Social Security Institute (NSSI) would be 18-20% lower than would have been the case if members had been insured exclusively in the state system, suggesting that members should consider the option of switching to the first pillar.Since 2015, when switching was introduced, only around 10,000 UPF members and 900 members of the Professional Pension Funds (for workers in jobs that qualify for early retirement) have switched.
Annika Strandhäll, chair of the Pensions Group“Pensioners’ money should never have to be hunted down in tax havens and you don’t have to be a financial expert to get a good pension,” she said.The PPM is the defined contribution part of the Swedish state pension, allowing individuals to allocate a percentage of contributions to private investment providers via the funds marketplace, or use the default option, AP7’s Såfa.Stefan Lundbergh, the Cardano expert who came up with most of the plan now being put in place, told IPE he was very happy with the appointment.“I think it is going in the right direction, and the momentum is keeping up,” he said. “The devil will be in the detail, but I think the person they have appointed is going to do very a good job.”At the Pensions Authority, Westberg has been at the centre of efforts to deal with private fund managers falling foul of the law.As part of the reform, in June the Pensions Authority published a set of tougher requirements for investment providers operating in the PPM in future.Some 21 funds have been cut from the funds marketplace after violating co-operation agreements, the government said.The Pensions Authority is currently involved in several legal processes both in Sweden and abroad recovering money for pensioners affected by scams, it said. Annika Strandhäll, minister for social security and chair of the Swedish parliament’s pensions group, said pension savings in Sweden should always be safe. Sweden has appointed a special investigator to lead a review tasked with implementing reforms to its first-pillar Premium Pension System (PPM).Mikael Westberg, current head of legal at the Pensions Authority, which oversees payment of Sweden’s state pension benefits, is to lead the implementation review, drafting regulatory proposals for a funds marketplace within the PPM.The proposals are to be presented by November 2019, and the new authority in charge of the funds marketplace will start operating on 1 September 2020, the government said.The PPM is being reformed to solve problems that have arisen since the system was set up in the 1990s – including, most recently, a spate of scandals involving rogue traders.
Demand for small cap equity strategies from pension funds and other asset owners appears to be on the rise, according to consultancy bfinance.It said it registered “notably” greater interest among the institutional investors that it worked with, and that the underlying motivations for making small cap investments were evolving.“While the academic and investment communities have become somewhat sceptical about the so-called ‘size premium’, allocators are instead looking towards small cap to complement and diversify their existing exposures, seeking stronger risk-adjusted returns over the long-term,” it said in a report.This was because, in the recent extended bull run, strong equity market returns had been “somewhat reliant on a relatively modest number of large cap stocks”. bfinance’s clients had shown interest in both regional and global small cap strategies, with the number of products of the latter type rising rapidly.The consultancy estimated there were more than 70 such strategies available, three times more than 10 years ago. US investors prefer their domestic market for small cap companiesHowever, pension funds and other asset owners remained structurally under-allocated to small cap equities, according to the consultancy.This lack of exposure had been reinforced by two of the past decade’s key trends: the move from regional to global equity strategies and the shift towards passive investment.Where investors using passive global broad market indices had additional small cap exposure, this was frequently confined to the domestic market, in particular for asset owners in the US and Australia.Exposure to small cap stocks among active global equity funds Source: bfinance. Includes data from more than 100 active global equity funds.See the February edition of IPE magazine for more on private equity
The higher mortality rate among pensioners in the first half of this year due to the COVID-19 pandemic has so far only had a very modest positive impact on the funding ratios of Dutch pension funds.The longer-term effects, however, are still uncertain.Excess deaths in the Netherlands in the first half of 2020 were the highest since at least 1995 when records started, according to the national statistics association CBS.Some 8.9% more deaths were recorded in the first six months of the year than could be expected based on the historical average, with excess male deaths (+9.3%) slightly higher than excess female deaths (+8.4%). The figure is considerably higher than the previous excess deaths record of +5.6%, which was registered in H1 2018.The impact of excess deaths on pension funds’ funding ratios is still very small, however, said Daan Kleinloog of pensions consultancy Sprenkels & Verschuren.“Pension funds tend to have a longevity risk buffer of 1% of total assets. This means that a 10% increase in deaths, roughly the number we’ve seen in the first half of the year, only translate into a 0.1% increase in funding ratios. So the effect is only very modest,” he said.What will happen to excess death going forward very much depends on the course the pandemic will take. “If the increase in deaths does not continue in the second half of the year, we’ll end up only having an excess death rate of 4.5% at year-end, halving the expected increase in funding ratios to just 0.05%,” Kleinloog noted.“And it’s also possible most people who died from COVID-19 would have died soon anyway, so perhaps the virus only brought some deaths forward. If this is the case, excess deaths could even be negative in the second half of the year,” he added.In this context, it’s also worth noting most excess deaths occur in the 80+ age group, which has a limited life expectancy anyway.Excess deaths could also rise going forward, Kleinloog said. “There are signs that a significant proportion of COVID-19 patients do not fully recover from the virus. This could shorten their life expectancy and lead to a higher death rate for a long time to come.”And, of course, the second wave of the virus which is now unfolding could lead to an increase in deaths towards the end of the year. After all, the bulk of COVID-19 deaths were recorded in Q2, when the excess death rate hit 15.3% for men and 14.7% for women.However, even in a worst-case scenario of excess deaths reaching these levels again next autumn and winter, the effect on funding ratios will likely remain small.To read the digital edition of IPE’s latest magazine click here.
The couple flew up from Sydney to the Gold Coast several times to view properties. They said they knew they wanted something brand new and modern with at least three bedrooms in the Broadbeach area and were quickly sold on Elysian. More from news02:37International architect Desmond Brooks selling luxury beach villa16 hours ago02:37Gold Coast property: Sovereign Islands mega mansion hits market with $16m price tag2 days ago“We had a two week holiday in Broadbeach over Christmas and fell in love with the area,” Mrs McLachlan said. “Having Pacific Fair right on our doorstep, as well as cafes, restaurants and of course the gorgeous beach was a real selling point location-wise.” Toni and Lyall McLachlan had not visited the Gold Coast in more than a decade, but they will soon be able to visit whenever they want.Toni and Lyall McLachlan had not visited the Gold Coast in more than a decade, but they will soon be able to visit whenever they want.They recently bought – and amalgamated – two apartments at the $79 million Elysian Broadbeach, giving them a perfect four-bedroom, three-bathroom holiday residence. Mrs McLachlan said the developer – Spyre Group – had welcomed and encouraged their ideas to change and personalise their super-sized apartment.“We were impressed that no contract was prepared and presented for our signature until we were completely satisfied with every aspect of the design and inclusions,” she said. Elysian will have 61 apartments (from $645,000) including two half-floor sub-penthouses starting at $3.4 million and two full-floor penthouses priced at $4.7 million. There is a maximum of four residences per floor, and all apartments will enjoy ocean views and sea breezes.High-quality finishes such as timber flooring, stone benchtops, LED and feature lighting are included in the standard finishes. Elysian will be home to the Gold Coast’s first residential hi-tech automated vehicle storage system which enhances the parking capacity of the building and allows most apartments to have two car spaces. Hutchinson Builders will start work on the tower after demolition work is completed on the 875sq m site, which overlooks Pratten Park.
Haesley Cush said the best way to achieve property profits was to play the long term game.Bidding started low at $420,000, but then things really started to pump. Back and forth the bids went: $450,000, $475,000, $500,000, $525,000 all the way to $715,000, when things paused.The bid was then raised to $750,000 and “once, twice, third time and sold!”If this home was worth approximately $150,000 in 1998, then that’s a five times return over the last 20 years and that includes a GFC! Video Player is loading.Play VideoPlayNext playlist itemMuteCurrent Time 0:00/Duration 0:51Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -0:51 Playback Rate1xChaptersChaptersDescriptionsdescriptions off, selectedCaptionscaptions settings, opens captions settings dialogcaptions off, selectedQuality Levels720p720pHD432p432p288p288p180p180pAutoA, 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 Rate1xFullscreenAndrew Winter: How to negotiate a better price00:51 This house at 29 Truscott St, Moorooka sold at auction for $750,000. Picture: realestate.com.auI have always had a clear memory of the day a buyer walked in to Ray White Moorooka wanting to spend $200,000.It was 1998, it was my third year as an agent and I was 20. I was sitting at my desk at the front of our office in the Moorvale Village, on Moorooka’s high street and the sun was beaming in past the window cards in the front window filling the room with light.The man walked up to my desk and said “G’day, I’d like to buy a low-set house. I’d like it on either the high side of Moorooka or in Tarragindi and I have up to $200,000 to spend”.I looked up from my desk in amazement. THIS PROJECT WILL CHANGE BRISBANE’S PROPERTY MARKET Two hundred thousand dollars, who on earth has two hundred thousand dollars to buy a house. To give you some context, the average price property we were selling was $120,000 and the really good homes, on the high side of Moorooka or in Tarragindi, would sell in the high $100,000s.Which brings us to today. On Wednesday night I called an auction at 29 Truscott St, Moorooka for Michael Nolan. The house is a two-storey brick home, on the high side of Moorooka, but it is in need of a face lift.More from newsParks and wildlife the new lust-haves post coronavirus16 hours agoNoosa’s best beachfront penthouse is about to hit the market16 hours ago I’m regularly questioned about the best way to make money in real estate and the answer I give is always the same. Buy what you can afford and plan to hold it forever. If I had of told the buyer in 1998 that his house would be worth $750,000 in 20 years, he would react the same way this buyer will if I tell them it would be worth $3.75 million in 2038. Who knows what will play out, but the mind boggles when you think about it.