AP4 takes 7.5% stake in residential company Oscar Properties

September 29, 2020

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first_imgSweden’s AP4 state pension fund has invested SEK63.1m (€7m) in residential real estate company Oscar Properties, taking a 7.5% stake in the Swedish company’s first issue of ordinary shares.According to the company, which focuses on modern design and architecture, AP4 participated in its share offer, taking a 7.5% stake.This equates to just over 2.1m shares, which were issued at a price of SEK30.It is the first listing for ordinary shares in the company. The shares started trading on the NASDAQ OMX First North Premier stock exchange on Monday.However, the company did issue preference stock last June in an IPO.In all, and assuming an option was exercised, Oscar Properties said it sold ordinary shares representing 39.2% of its equity, with group head of the company Oscar Engelbert maintaining a 56.8% stake.last_img read more


TIAA-CREF, Henderson complete merger of real estate businesses

September 29, 2020

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first_imgTIAA-CREF and Henderson Global Investors have completed the merger of their European and Asian real estate businesses.The newly created joint venture TIAA Henderson Real Estate is 60% owned by TIAA-CREF and 40% by Henderson.With $71bn (€51.4bn) in assets under management, the new entity will be one of the world’s largest real estate investment management companies.Both parties’ existing European and Asian property businesses will be headquartered in London. The company said its focus would be “pure real estate with no distractions from other markets, asset classes or business lines”.Simultaneously, TIAA-CREF has completed the acquisition of Henderson’s North American property business.The business, it said, is being managed as a “distinct, yet complementary operation” within the existing TIAA-CREF North American real estate platform.TIAA-CREF will manage and service its existing $48.2bn real estate platform, which invests on behalf of the TIAA General Account, retirement participants and leading institutional and individual investors worldwide, focusing on core real estate.A full interview with James Darkins, Anthony Butler and Tom Garbutt of TIAA Henderson Real Estate will appear in the May/June edition of IP Real Estate magazine.last_img read more


Norwegian oil fund to publish voting intentions from 2015

September 29, 2020

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first_imgNorway’s Government Pension Fund Global (GPFG) will start publishing its voting intentions from next year, according to asset manager Norges Bank Investment Management (NBIM).The NOK 5.4trn (€647bn) sovereign fund, one of the world’s largest, already publishes how it voted in shareholder resolutions the day after each company’s annual general meeting (AGM).It said earlier this year that, in a move to increase transparency further, it would disclose its voting intention prior to each meeting.In its Strategy Plan 2014-16, which also revealed that the fund would look to double the number of companies in which it owns a 5% stake, it stressed that voting was its “primary means” of exercising shareholder rights. It added: “We will make our voting intentions public before the annual shareholder meetings to increase transparency and encourage initiatives to strengthen the vote execution chain.”A spokesman for NBIM told IPE the fund aimed to start disclosing its voting intentions from 2015, but only for “selected companies”.He declined to provide any further details about its plans for prior disclosure, including how soon in advance of an AGM the manager would publish a statement.In June’s report, the fund said environmental, social and governance (ESG) issues would be raised as agenda items, and that it would look to “expand” its involvement with companies in which it had material holdings.It cited greater involvement in board nomination procedures, either through direct dialogue with the company chairman or through its membership on nomination committees, as an area on which it would focus increasingly.The fund last April chose to appoint NBIM chief executive Yngve Slyngstad as its representative on the nomination committee for Swedish car manufacturer Volvo, in which it owned a 4.5% stake at the time.NBIM has since grown its holdings from NOK7.2bn at the end of 2012 to NOK10.1bn at the end of 2013, equivalent to 5.85% of the company’s total shares.Last year, the fund also said it had set up a three-strong Corporate Governance Advisory Board to help it better “safeguard” its value.The board comprises UK academic John Kay, author of a report that led to the launch of the UK Investor Forum, former Hermes Pension Management chief executive Tony Watson and Peter Montagnon.last_img read more


IPE Pensions Scholarship Fund to fund DC communication research

September 29, 2020

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first_imgThe IPE Pensions Scholarship Fund has awarded a full, €5,000 grant to a PhD candidate researching communication and member engagement.Wiebke Eberhardt, studying at Maastricht University’s School of Business and Economics, expects to complete her PhD on pension communication by 2017.She said pension fund participants currently knew “very little” about the schemes in which they were members and often did not read the information sent to them – one of the reasons she planned to survey 7,000 defined contribution members as part of her research.“An important challenge for pension communication is to find ways to motivate participants to become aware of the importance of pensions, to inform themselves about their individual expected pension benefits and, ultimately, to take action, by building up sufficient savings,” she said. Elsbeth Bruggen, Eberhardt’s supervisor and an associate professor at Maastricht University, said she hoped Eberhardt’s results would be “extremely insightful” for pension providers.Congratulating Eberhardt on behalf of the IPE Pensions Scholarship Fund board, IPE founding editor Fennell Betson said the fund was very pleased to be supporting research that had such positive potential outcomes for a key issue in DC communication.“We look forward to her findings with great interest,” he added.The fund is overseen by a board comprising Chris Verhaegen, member of the Occupational Pensions Stakeholder Group at the European Insurance and Occupational Pensions Authority; Peter Melchior, executive director and actuary at PKA Pension Fund in Denmark; and Peter Borgdorff, executive director at Dutch healthcare sector PFZW.The fund’s academic adviser is Debbie Harrison, visiting professor at the Pensions Institute, Cass Business School, in London.The fund was established by IPE as a not-for-profit activity with the purpose of helping European students undertaking graduate or post-graduate studies relating to pensions matters at universities or research bodies in Europe.It was endowed with an initial fund of €10,000 to mark the 10th anniversary of the IPE Awards, an amount that has since been increased.The fund said it was keen to hear from European students involved in or considering undertaking pensions-related studies and research, or from the academic community.The grant to Eberhardt is the third handed out, following one to examine whether funded pension systems were inflating the value of long-term securities. Further details are available from Fennell Betson or on the Fund’s website.last_img read more


Italian regulator questions merit of pension fund competition bill

September 29, 2020

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first_imgThe Italian pension regulator, Covip, has expressed strong doubts on the draft competition bill that sanctions full portability of pension savings.The bill allows employees to transfer their savings, as well as their employers’ contributions, from labour contract-based pension funds to for-profit pension vehicles, which carry higher costs for members.In a parliamentary hearing, Covip chairman Francesco Massicci said: “It is not clear, however, how these contingent shifts of members correspond to a real advantage for members themselves.”Massicci said Covip figures showed there was an inverse relationship between costs and assets under management (AUM) at labour contract-based pension funds, or fondi negoziali. He said the same could not be said for pension vehicles sponsored by insurance companies and banks, including individual pension schemes, or “Piani Individuali Pensionistici” (PIPs), where costs do not decrease as AUM increases.Massicci quoted Covip figures showing that, if contributing to a labour contract-based pension fund for 35 years earns a monthly benefit of €5,000, contributing the same amount to a pension vehicle sponsored by a for-profit entity would earn as little as €3,900 a month over the same period.Despite the higher costs, membership of pension funds sponsored by for-profit entities has increased faster than lower-cost vehicles.At the end of 2014, PIPs had 2.9m members, accounting for 44% of all second-pillar pension fund members.Open pension funds, sponsored by insurance companies and banks, had 1m members, whereas labour contract-based pension funds had 2.55m members in total.The total membership figure for 2014 was 6.56m, which corresponds to around 30% of those in employment.Massicci told the Italian Parliament’s lower house, the Chamber of Deputies, that such growth of membership at higher-cost pension funds was due to their sponsors’ large distribution networks.He said: “Their growth was driven by more commercial placement methods, thanks to widespread sales networks that are remunerated on the basis of the number of products placed.”The Covip chairman added that the higher costs were linked to the presence of these sales networks.Employee and employer associations, as well as bodies representing not-for-profit pension funds, have voiced concerns over the draft bill.Manfredo Carfagnini, chairman at the pension fund for employees of BNL BNP Paribas, said the fund strongly opposed the measure.“Introducing competition in this way seems to respond to the interests of a lobby rather than the whole sector,” he said.“The risk is that one part of the market cannibalises the rest.”He also believes the measure would be of no advantage to employees, given that PIPs are significantly more expensive.“A paritarian institution such as ours can offer very sophisticated asset management at a very low cost,” he said. Carfagnini acknowledged that, being a closed pension fund with 99% coverage of the sponsor’s workforce, his fund could in theory face negative membership growth, if other entities were allowed to take on employee and employer contributions currently directed to the BNL BNP Paribas pension fund.  However, he said that – at the moment, only theoretically – the fund’s sponsor would be open to the idea of using its own network of advisers if there was full portability, and his fund were also allowed to take up members from other companies.During Covip’s hearing, Massicci announced that the regulator was about to announce new measures on transparency, aimed at making member information more detailed and targeted at specific funds.For more on pension competition in the country, see this month’s Pensions in Italy reportlast_img read more


ICI’s UK fund agrees £630m pensioner buy-in with Scottish Widows

September 29, 2020

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first_imgThe UK’s ICI Pension Fund has completed its fourth buy-in, insuring £630m (€805m) of pensioner liabilities with Scottish Widows – the firm’s largest transaction since entering the market last year.Heath Mottram, chief executive of the closed fund now sponsored by AkzoNobel, said the transaction marked the end of five months of “significant work” by the board of trustees, building on existing de-risking undertaken.“The trustee is delighted to add Scottish Widows to its de-risking panel,” Mottram addd, “further enabling it to continue to improve the security of members’ benefits.”The ICI scheme has now insured liabilities with three different companies – agreeing several transactions in 2014 and last year with Legal & General and Prudential, respectively. Across all transactions reported to date, the ICI scheme has insured £6.3bn of its £10.3bn in liabilities reported at the end of March last year, leaving it 93% funded.Emma Watkins, director of bulk annuities at Scottish Widows, said the firm looked forward to becoming a long-term de-risking partner for the fund, which according to its most recent annual report had £9.8bn in assets.“We have worked closely with the trustee and their advisers to develop a bespoke solution over a number of months and this transaction demonstrates Scottish Widows’ ability to provide innovative de-risking solutions to large pension schemes,” Watkins added.Clive Wellsteed, partner at consultancy LCP and lead adviser to ICI during the transaction, said ICI now had umbrella contracts in place with all three insurers, allowing the trustee to “react to favourable opportunities” as they arise in the market.Wellsteed previously said the umbrella contract allowed ICI to insure additional tranches of liabilities when pricing reached a level acceptable to trustees, while limiting the associated workload to areas specific to each tranche.last_img read more


Dutch roundup: PGGM, ABP, Legal & General, Chesnara

September 29, 2020

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first_imgVolo has outsourced both its asset management and administration to PGGM, the provider of the €185bn healthcare scheme PFZW. The new APF said it expected to conclude the first contracts with new clients next year, but declined to provide further details.Within the APF, clients can either join a group of pension funds or can be accommodated in an individual compartment.In other news, Ronald Plasterk, minister for domestic affairs, indicated that plans to divide the pension arrangements of the €381bn civil service scheme ABP into sector-related schemes, or even to split the pension fund, have been postponed.He said he wanted to prioritise the update of the entire pensions system.In February, Plasterk submitted an departmental survey to parliament comprising proposals to divide ABP’s pension plan into government sector-linked arrangements, as it currently serves 14 collective labour agreements.At the time the proposal met fierce resistance, with the unions as well as labour party and coalition partner PvdA flatly opposing it. The PvdA’s fellow-coalition partner, the liberal party VVD, indicated that it would be a matter for the social partners.Elsewhere, Legal & General said that Chesnara, a British consolidator of pensions and life insurance, had taken over its Dutch business in a €160m transaction, and that it would continue under a new name.Legal & General Group made clear that it wanted to focus on the UK and the US, and had for this reason already divested its operations in France and Ireland.According to Dutch financial news daily Het Financieele Dagblad, Chesnara had indicated it wanted to follow a growth strategy in the Netherlands.Hilversum-based Legal & General has been operating in the Netherlands since 1984 and provides collective pensions for SMEs. It has approximately 170,000 policy holders and €2.2bn of assets under management.The take-over is subject to approval of the Dutch supervisors and has been put to Legal & General’s Dutch works council for advice. The €200bn asset manager PGGM has been granted a licence to run a general pension fund (APF), becoming the first pensions provider in the Netherlands to launch such a vehicle.The new APF, named ‘Volo’, will initially aim at attracting medium-sized pension funds, indicated chairman Erik Goris in an interview with IPE sister publication Pensioen Pro.He said he expected that PGGM’s status as a non-profit co-operative would be a winning point for sales, “as it would help keep the APF’s costs as low as possible”.To date, general pension funds have been launched almost exclusively by insurers, with Unilever being the only company to have applied for an APF license for its two pension funds.last_img read more


Consultants predict bumper year for UK pension de-risking

September 29, 2020

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first_imgAs much as £30bn (€35.1bn) could be transferred to insurance companies through de-risking activity this year, according to consultants.Willis Towers Watson predicted the total volume of buy-ins, buyouts and longevity swaps in the UK would hit a record level in 2017 after regulation and global politics led to a subdued period of activity in 2016.The consultancy giant said deals could hit a combined £30bn in the next 12 months.Shelly Beard, director in Willis Towers Watson’s de-risking team, said 2016 had been a year for “taking stock”, following major disruptive events such as the UK’s European Union referendum and the US presidential election. However, the second half of the year “saw a marked increase in the value available in the bulk annuity market”, Beard said.“Consequently, providers are entering the New Year with strong pipelines and several deals expected to trade in January, and more of our clients are approaching the market than ever, so we expect 2017 to start from a very healthy position in terms of appetite and deal pipelines,” she added.Meanwhile, LCP also predicted a record year for de-risking, although its headline figure was half that of Willis Towers Watson’s at £15bn worth of buy-ins and buyouts.Clive Wellsteed, partner at LCP, said the record appetite was to be driven by favourable pricing and increased capacity at insurance companies.In addition, smaller schemes are more able to de-risk.“There is plenty of scope for the market to grow even further over the next 10 years,” Wellsteed added.“We predict insurer capacity will increase to over £20bn in 2017 and so will continue to exceed pension plan demand.“But, over the medium term, there remains the real risk that demand from maturing defined benefit pension plans will exceed capacity, putting upward pressure on pricing.”Last year saw the one-millionth person’s pension insured through a buy-in or buyout, according to LCP.UK companies have transferred £70bn of assets to insurers in the past 10 years, the consultant said, equal to roughly 5% of total defined benefit pension assets.Amid the expectations of record demand, Willis Towers Watson’s Beard warned that schemes could face competition for insurance capacity from other insurers seeking to offload legacy individual annuity “back books”.Last year, Aegon transferred £9bn worth of liabilities from its individual annuities business to Rothesay Life and Legal & General.Beard said: “We would advise that schemes wishing to engage in de-risking activity take note of back-book activity, as this should affect the timing of their approach to the market. We expect this element of the market may distract some of the buy-in providers at various points in the year.“On a more positive note, some insurers will offer more attractive pricing opportunities if they have been left disappointed after missing out on attractive back books.”last_img read more


ESG factors can indicate overall stock risk, says AQR

September 29, 2020

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first_imgInvestors who wanted to tilt their portfolios towards safer stocks might be able to combine the two to build more stable and robust portfolios, they said.AQR said it found clear support for its hypothesis that ESG exposures could be informative about the risks of individual firms in data which it said was robust to a wide variety of controls and various stock universes.“We also find that ESG scores may help forecast future changes to risk estimates from a traditional risk model,” AQR said.Poor ESG exposures predicted increased future statistical risks for equities, the authors found.However, when broken down into the three components of ESG risk, AQR’s research team found that it was the social and governance pillars that showed the strongest correlation to risk. “The environmental pillar is only insignificantly related to the various risk measures,” the authors said.“On the one hand, it may be that environmental exposures are inherently less predictive of companies’ risks,” Dunn, Fitzgibbons, and Pomorski wrote. However, it was also possible that data on environmental exposures was “noisier” than data on the other two components.This noise in the variable could be preventing computations from giving more precise, statistically significant estimates, the authors suggested.The full paper is available here. Information about a company’s environmental, social, and governance (ESG) behaviour may reveal how risky a security is on a statistical basis, according to investment manager AQR.In AQR Capital Management’s new paper – “Assessing Risk through Environmental, Social and Governance Exposures” – the firm said it found a strong positive relationship between companies’ ESG exposures and the statistical risk of their equity.“Stocks with poor ESG exposures tend to have higher total and specific risk and higher betas, both contemporaneously and as far as five years into the future,” the Greenwich, Connecticut-based manager said. “We interpret these findings as evidence that ESG information may play a role in investment portfolios that goes beyond the ethical considerations and may inform investors about the riskiness of the securities in a way that is complementary to what is captured by traditional statistical risk models,” wrote the paper’s authors, Jeff Dunn, Shaun Fitzgibbons, and Lukasz Pomorski.last_img read more


Investor pledges, demands and criticism as Paris Agreement turns two

September 29, 2020

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first_imgInvestors ‘undermining’ Paris goalsInvestors were also in the firing line, however.At “Climate Finance Day” in Paris yesterday, a group of activist organisations launched reports that, they said, showed how large banks and investors were undermining the Paris climate goals.Almost 1,500 institutional investors had nearly $140bn (€119bn) invested in the top 120 coal plant developers, according to one of the reports by Rainforest Action Network, BankTrack, Urgewald, Friends of the Earth France, and Re:Common.They said BlackRock was the largest investor in coal plant developers, followed by Japan’s Government Pension Investment Fund (GPIF) and Vanguard.“Many of the top investors in our ranking are members of the Institutional Investors Group on Climate Change or similar initiatives that regularly issue warnings about the threat climate change poses to our economy and societies,” said Heffa Schücking.  “These are, however, the very same institutions that invest billions of dollars in companies with enormous coal power expansion plans. It is time that BlackRock, Vanguard and other global investors acknowledge the inconvenient truth that their own investments are accelerating climate change.”ESG ratings wanted Also in the lead-up to this week’s events in Paris, major asset owners and asset managers active in the French market have called for borrowers to communicate an ESG rating in addition to their conventional credit rating.The investors’ declaration referred to issuers, but did not specify whether this only applied to corporates issuing bonds or also to sovereigns and related issuers.The signatories said their call “illustrates our conviction that social, environmental, ethical and governance factors influence the quality of credit, the valuation of companies and the creation of future value”.ESG ratings are typically the business of specialised agencies and research firms such as oekom research or Vigeo, although conventional credit rating agencies have come under, and are responding to, pressure to capture environmental, social and governance factors.In their declaration, the investors said specialist agencies’ economic models might need to change for them to remain viable, for example starting to charge issuers for ratings.The agencies would therefore have to provide issuers with “guarantees of independence, methodological transparency, greater proximity, and responsiveness towards them”.Japan’s GPIF has previously called for more transparency from organisations that score companies on their ESG behaviour.The signatories said they also intended to contribute to consolidation in the market for ESG or extra-financial analysis. Signatories included asset owners AG2R La Mondiale, ERAFP and Ircantec, and managers Amundi, Candriam Investors Group and La Banque Postale Asset Management. Article 2 of the December 2015 Paris AgreementThe 100 companies have been identified using data from non-profit environmental research organisation CDP on their direct and indirect emissions, including those associated with the use of their products.Dubbed “Climate Action 100+”, the initiative is designed to implement the commitment first set out in the Global Investor Statement on Climate Change in the months leading up to COP-21 in 2015. Groupe Caisse des Dépôts’s Laetitia Tankwe, responsible investment adviser to the president of French public pension scheme Ircantec, said: “Many long-term investors made a clear commitment two years ago to work with companies to ensure that they both curb emissions and do more to disclose the risks and maximise the opportunities presented by climate change.“Today global investors are following through to put in place a global strategy to drive greater engagement that will deliver on this commitment.”The engagement pledge was unveiled on the occasion of the One Planet Summit in Paris, convened by French president Emmanuel Macron, president of the World Bank Group Jim Yong Kim, and secretary general of the UN António Guterres.It is intended to address “the ecological emergency for our planet”.“For two years to the day after the historic Paris Agreement, it is time for concrete action,” the summit website states. The investors will also engage with the companies to get them to implement a governance framework that articulates the board’s accountability and oversight of climate change risk, and to make climate-related financial disclosures as recommended by the Financial Stability Board taskforce.center_img Two years ago today, French foreign minister Laurent Fabius banged a gavel at the COP-21 climate change conference in Paris, signalling a consensus between 196 parties from around the world on addressing climate change.On the anniversary of the most comprehensive international agreement on climate change to date, the convening of an international summit in Paris today has spurred the announcement of myriad initiatives and declarations relating to the fight against global warming.More than 200 global institutional investors have pledged to engage with 100 of the world’s largest corporate greenhouse gas emitters to get them to curb emissions.The investors will ask companies to take action to reduce emissions across their value chain, consistent with the Paris Agreement’s goal of limiting global average temperature increases to below 2°C above pre-industrial levels.last_img read more