High charges hitting opt-outs from Swedish ITP system
Sweden’s high earners opting out of the second-pillar ITP pension system are seeing their pension savings eroded by high charges levied by providers, according to pensions administration organisation Collectum.Private salaried employees with a monthly salary of SEK47,200 (€5,374) or more – known as ‘tiotaggare’ (high-earners) – have since 1990 been allowed to opt out of ITP2 for earnings above the social security ceiling and set up their own defined contribution (DC) plan instead, known as Alternative ITP.Tomas Carlsson, pensions expert at Collectum, said: “Many people who have made a choice to leave the ITP plan for a tiotaggar solution have been promised the moon.“But they may be disappointed because it requires a hefty return to compensate for the high charges.” The ITP system of occupational pension provision for white-collar workers was switched to DC from defined benefit (DB) in 2007.The new DC part is now called ITP1, run by Collectum, and applies to people born in 1979 or later.People born in 1978 or before are still covered by the DB scheme, now known as ITP2.Of a total of 115,000 high-earners eligible for the ITP plan, 65,000 have opted for their own occupational pension plan, usually going through an insurance broker to arrange this, according to Collectum.Figures from consultancy Aon Hewitt show that high earners who have left an ITP plan at age 40 may end up with SEK1.3m less in pension assets when they reach 65 compared with someone who stayed in ITP.Andreas Lauritzen, chief executive at Aon Hewitt in Sweden, said the problem was that many of these plans were set up on an individual basis, and so have high levels of manager charges and broker commissions.He said this difference was particularly marked when they were compared with DC plans in other countries, as well as with ITP1 and the blue-collar SAF-LO DC plans in Sweden. “These high charges significantly reduce the expected pension payable from these DC plans, and may mean the pension from DC is less than what they would have obtained from the DB plan in ITP2, or if they had invested contributions in the funds offered through Collectum in ITP1,” Lauritzen said.He said Swedish employees facing the decision about whether to stay in the DB ITP2 plan or move to an Alternative ITP DC plan might lack the required information to decide whether DB was better for them.“The key issue is that commission-based advisers will only generally advise on which DC funds to choose,” he said.For more on ITP pension charges, see the November issue of IPE magazine
Six of Britain’s largest insurance companies have committed £25bn (€30bn) to domestic infrastructure projects, an allocation made possible due to clarity over the implementation of Solvency II regulations, according to the UK government.Publishing a revised National Infrastructure Plan (NIP), the UK Treasury outlined a £375bn pipeline of potential projects, with chief secretary to the Treasury Danny Alexander saying the insurance sector’s commitments marked a “massive vote of confidence” in the domestic economy.The Association of British Insurers’ director general Otto Thoresen noted that the sector had a key role to play as a provider of long-term capital.“Providing capital for infrastructure projects will help drive a competitive, healthy and resilient UK economy,” he added. The government said Aviva, Friends Life, Legal & General, Prudential, Scottish Widows and Standard Life had agreed to invest “at least” £25bn over the next five years.“Suitable projects will include, but not be limited to, those included in the National Infrastructure Plan 2013 and can include major infrastructure projects led by private sector sponsors,” the Treasury said in a policy document released alongside the NIP.The document, ‘The UK Insurance Growth Action Plan’, also said that, in the wake of concluded negotiations at the European level over Solvency II – a likely reference to the recent agreement over the Omnibus II Directive – the industry now had sufficient clarity to make long-term commitments.“In line with the government’s broader transposition policy,” the document continued, “and given that Solvency II is maximum harmonising, implementation will be fully consistent with the Directive and not go beyond it – implementation will be through a direct copy-out approach where possible, avoiding gold plating.”To coincide with the publication of the NIP, the National Association of Pension Funds (NAPF) confirmed it was in final negotiations with an asset manager to assume responsibility for the equity portfolio of its Pensions Infrastructure Platform (PIP).The manager, Dalmore Capital, currently advises and manages £430m in UK assets, the NAPF noted.Its statement added: “Following significant interest, and a rigorous selection process, asset managers were shortlisted for a number of investment mandates. “Discussions are still ongoing regarding the appointment of investment managers for the remaining mandates.”The PIP launched its manager selection process in May, having attracted tentative commitments of £1bn from 10 UK pension funds.,WebsitesWe are not responsible for the content of external sitesLink to the UK National Infrastructure PlanLink to ‘The UK Insurance Growth Action Plan’ policy document
In a statement, BayernInvest thanked Schlick for his services and noted that he had “greatly influenced the company’s image” and “successfully advanced the product range”.The supervisory board said it would finalise the hiring of a new CIO in early 2015.In his introductory note to the 2013 Telos study on German Spezialfonds, in which BayernInvest is a co-financer, Schlick predicted a shift towards “more individualised solutions away from a simple product approach”.He described the current investment environment as one in which “the average return level has fallen, safety has gone, economic cycles are shortened, markets are more dynamic and the regulatory pendulum is swinging heavily to one side”.He also argued that stock markets were following “fundamental economic assessments much less than they used to”, and were much more influenced by political decisions. Oliver Schlick has told the supervisory board of BayernInvest he will not stand for re-election as board member and CIO in February 2015 when his contract expires.Schlick has been on the board of the asset management subsidiary of German regional bank BayernLB since 2008.The BayernInvest KAG has grown its assets under management by more than 13% to almost €50bn year-on-year in 2013, gaining rank 11 in IPE’s list of top institutional managers in Germany.As per mid-2014, the assets under management have grown further to almost €53bn, with 80% of the total in Spezialfonds being managed for “insurers, Versorgungswerke, companies, foundations and church institutions”, according to BayernInvest.
However, the HBS as envisaged by EIOPA would impose solvency requirements or minimum funding levels, or act as a risk-management tool.In an interview with IPE, Bernardino said a harmonised system across the EU would allow cross-border funds to be in deficit, as long as they complied with the HBS framework.“If you want to remove the cross-border fully funded requirement, there needs to a be a higher level of harmonisation,” he said. “When you do these [HBS] consultations, you push people to think about the real economic elements of pension funds.“And if EIOPA does this, then we will have influenced the way the sustainability of pension schemes is addressed.”In October, the authority published a consultation providing six frameworks for the HBS, each either imposing solvency requirements or a minimum funding level, or presented as a risk-management tool.Bernardino said the risk-management tool would come with some funding consequences.The idea of solvency requirements for pension funds was initially expected to be included in the IORP II Directive, before being dropped by then commissioner Michel Barnier, after protests from several governments.However, the idea lived on, with EIOPA working on the HBS outside European Commission influence.“There is an intrinsic value in the work EIOPA is doing,” Bernardino said.“Cross-border pension funds highlight the true nature of the European internal market.“[But a cross-border] pension fund still has to report to countries in different fashions – it is completely sub-optimal.“If we move towards a sufficient, minimum level of harmonisation on technical provisions or solvency, we can have a better consistency and convergence, and there will be huge cost benefits.”The consultation runs until 13 January 2015.Bernardino also said its consultation on the HBS had not been done with an outcome in mind, and that the authority’s main aim was to be challenged by the industry.“We are open, and this is why we are consulting,” he said.“You need to have an idea, but the one I have is not a choice between framework one or framework six – it is to listen.”To read the full interview with Gabriel Bernardino, click here or see December’s issue of IPE magazine Cross-border funding rules for European pension funds could be relaxed by using the harmonised holistic balance sheet (HBS) model, the EU-wide regulator has suggested.Gabriel Bernardino, chairman at the European Insurance and Occupational Pensions Authority (EIOPA), said the consulted-on HBS would allow pension funds to operate across borders while running a deficit.Current rules stipulate that cross-border schemes must always have enough assets to match liabilities.Plans to encourage the growth of cross-border pension funds among multi-national companies have suffered, as they pose too much capital risk for corporate sponsors.
IPE contributing editor Joseph Mariathasan explores whether hedge funds can justify their feesHedge funds have always been a controversial area for pension fund investment. Quite apart from the opaque nature of many strategies and the esoteric nature of where the returns are supposedly coming from, the traditional fee structure of 2% management plus 20% performance hits you in the face.It should be a worrying time for the hedge fund industry. Last year saw the largest US pension scheme, CalPERS, pulling out of all hedge funds, and this year has already seen PFZW, the second-largest pension scheme in the Netherlands, following suit. In both cases, high fees were a major factor, and they were amongst the first pension funds in their markets to invest in hedge funds.But the obvious question to ask is why did they only just recently realise the fee rates were unacceptable? The answer must be that is because hedge fund performance in recent years has lagged the equity markets by a long way – in 2013, the S&P 500 returned 30% whilst the HFRI, a well-known hedge fund benchmark index, had just a 9% return. Can hedge funds justify the fees? The answer appears to be many certainly don’t whilst a few may. Many sources of hedge fund returns are systematic, such as momentum and volatility, and these are easily accessible via approaches that can be described as ‘alternative beta’. With an increasing acceptance of these return drivers behind many hedge fund strategies, there is also an increasing reluctance to pay high fees for accessing them. Indeed, companies such as Metzler Asset Management are offering access to such strategies at conventional fee rates. It is not surprising that there appears to be a strong downward trend in fees.Perhaps the question a pension fund needs to ask is how much should they be prepared to pay for specific hedge fund strategies in their portfolios. There are two ways a pension fund can look at this, though. One is to ask how much effort and cost is incurred by a fund manager in offering a specific strategy, which should be reflected in the base management fee. On this basis, quantitative market neutral and systematic global macro strategies should deserve higher fees because of their higher cost base arising from the high level of technology and data required.The other approach is to take the view that what matters to a pension fund is gaining access to asset classes that are less correlated to the traditional ones. Aberdeen Asset Management’s hedge-fund-of-funds team makes this case and argues that, when the hedge fund industry was small and less competitive, managers generally generated absolute returns. The dramatic increase in size of the industry has meant many strategies now have a high beta with respect to traditional asset classes, and Aberdeen would not be prepared to pay high levels of fees for them. For a pension fund, fee levels are ultimately a function of how useful a hedge fund strategy is in terms of its ability to offer diversification from its traditional asset classes and the relative bargaining power of investors versus the managers. The actual resources required are just a bargaining chip managers can use, but for a pension fund, that is someone else’s problem! What should be addressed, though, is against what benchmark comparisons performance should be judged against to justify the fees. Hedge fund strategies usually do not claim to be able to outperform equities at the height of a bull market, but often the claim is made that the strategy can match equity performance with lower volatility. A short-term performance comparison would therefore be an invalid approach.Aberdeen has undertaken some analysis on costs versus performance and correlations with traditional asset classes, and it argues that it really can be beneficial to pay for access to some higher-cost products. It finds that discretionary global macro, fixed income relative value and multi-strategy offer relatively attractive risk/return profiles, while the profiles of long/short equity quantitative, systematic global macro and event-driven equity are less so.It has also found evidence that more costly funds in certain strategies are, on average, producing better risk-adjusted results than their cheaper peers. This applies to global macro, fixed income relative value, quantitative and multi-strategy. What it concludes is that, for these strategies, it really can be beneficial to pay for access to higher-cost products in contrast to other strategies such as the equity-orientated event-driven and long/short equity, where its analysis suggests there is less value added by the more expensive managers. Whilst the more sophisticated pension funds may take heed of this analysis, I suspect for many wishing to invest in hedge funds, it may be cheaper just to invest in an alternative beta index product.Joseph Mariathasan is a contributing editor at IPE
A pension fund is tendering a €20m private debt mandate, using IPE Quest.The unnamed pension fund behind search QN-2163 asked a consultant based in the Netherlands to find an asset manager able to invest in European private debt.The actively managed mandate would see performance benchmarked against the Euribor interest rate, and should have a tracking error ranging between 3% and 8%.The mandate, to be held in a pooled fund, could invest wholly in European private debt, but it would be allowed to allocate up to 40% to debt outside Europe. The consultancy said it was looking for asset managers with existing Dutch institutional clients.Interested managers should have at least €1bn in similar private debt mandates, and at least €5bn in total assets under management.They should also have a minimum track record of three years, preferably five years.Requests for proposals should be submitted by 15 March, stating net-of-fees performance to the end of 2015.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 jayna.vishram@ipe-quest.com.
In the fund’s annual report, its chair, councillor Keiran Quinn, described the return as “disappointing” but said 2015-16 had been an exceptionally challenging year for pensions in general and local authority pensions in particular.Quinn highlighted the effects of monetary policy on defined benefit schemes, with the UK base rate of interest remaining at 0.5% for a seventh year, together with the continued impact of quantitative easing.However, he concluded: “GMPF has a long-term successful track record reflected in its funding level and reputation. Our proposed pooling arrangements are designed to ensure this continues.”GMPF is a member of the Northern pool, one of eight asset pools set up to manage local authority pension fund assets to back infrastructure projects and cut management costs.In the previous financial year, GMPF awarded new mandates to LaSalle (property) and Investec (global equities) to improve performance, and this policy was continued during 2015-16.In March this year, three managers – KKR, Oak Hill Advisors and Stone Harbor Investment Partners – were appointed to run a £750m credit framework.One of these managers has now been appointed to commence its role in the current year, but, as yet, the pension fund has not disclosed the name of the manager.During 2015-16, positive returns were made by all investment categories except UK and overseas equities.The fund said substantial returns were achieved in alternatives, property and overseas government fixed interest.Public equities dominate the fund’s portfolio, with a benchmark asset allocation of 61.5% of assets as at 31 March, compared with 23.5% for bonds and cash, 10% for property and 5% for alternatives.Equities are split between overseas (58% as benchmark), UK (34%) and global equities (8%).The fund’s main property portfolio (excluding its balanced property portfolio vehicles) achieved a total return of 10.5% for the 12 months to 31 March, though the benchmark was 13.3%.Continuing its emphasis on local investment, during the year GMPF embarked on a new £70m development at First Street, Manchester, creating 180,000 sq ft of office space, in a joint venture with Patrizia, through the Greater Manchester Property Venture Fund, its property development arm.GMPF has also – together with two other local authority pension funds – set up a programme of lending and providing equity capital to small and medium-sized enterprises in north west England.Meanwhile, the target allocation to infrastructure, via new commitments to specialised funds, was boosted to an average £120m per year.The current realistic benchmark allocation for private equity is 2.5%, and for infrastructure, 1%, with target allocations of 5% and 4%, respectively. The Greater Manchester Pension Fund (GMPF) underperformed other local authorities for the second year in succession, with an investment return of -0.8% for the 12 months to 31 March, compared with an average 0.2% for local authority pension funds as a whole.Last year, GMPF’s 11.7% return was also less than the 13.2% average for its peer group.The negative return led to a small dip in GMPF’s assets under management, from £17.6bn (€20.4bn) at the end of March 2015 to £17.3bn at the end of March 2016.It took long-term annualised returns to 6.8% for the five years, and 5.7% for the 10 years, to the same date.
Ireland’s sovereign wealth fund has invested in a life sciences company in a commitment that will see the creation of a research centre and 150 local jobs.The Ireland Strategic Investment Fund’s (ISIF) investment in Genomics Medicine Ireland (GMI) alongside ARCH Venture Partners, Polaris Partners and GV – worth a total of €40m – was hailed as an “exciting endeavour” by Enda Kenny, Ireland’s Taoiseach, or prime minister.“When the government established the ISIF,” Kenny added, “we wanted to encourage new investment and job creation across Ireland in ground-breaking new sectors such as next-generation healthcare solutions.”The ISIF’s head of innovation, Paul Kenny, said the fund looked forward to developing the year-old company into one of international significance and boosting Ireland’s place in developing healthcare solutions. “GMI has the potential to play a significant role, in collaboration with the Irish healthcare system, in the identification of transformative treatments for a range of diseases that have eluded effective treatment to date,” he said.The research and development centre funded by the ISIF-backed investment will help GMI examine the human genome and develop cures for rare diseases, the company said.The stake in GMI is not the ISIF’s first exposure to the healthcare sector.It has also invested in Centric Health, a provider of diagnostic imaging, and 3D4 Medical, which develops medical and fitness apps.The €8bn sovereign fund has a double bottom line, aiming for both financial returns and stimulating Ireland’s economic growth.
Mosel started his new job with effect from 1 April.Under Kretschmer’s leadership the pension fund has won several IPE Awards, including best German Versorgungswerk two years in a row (2015 and 2016), and best infrastructure investment as well as fixed-income investment in 2016.Over the last decade the ÄVWL has built significant in-house expertise for real asset investments, especially infrastructure.In 2011, it successfully joined forces with other “Versorgungswerke” pension schemes to acquire shares in high-voltage grid operator Amprion from energy giant RWE.The ÄVWL has also taken over asset management for several smaller Versorgungswerke. Christian Mosel is taking over as main managing director at the €12bn Ärzteversorgung Westfalen-Lippe (ÄVWL).He succeeds Andreas Kretschmer, who has chaired the board at the pension fund for doctors in the German province of Westfalen-Lippe for 25 years.Until the start of the year, Mosel had been working for the German branch of Sarasin, the Swiss asset manager and banking group, as head of institutional business and deputy chairman of the board.Kretschmer will stay on as adviser to the ÄVWL on some investment boards, he confirmed to IPE.
Sustainability risks at so-called megafarms in Asia are having a “catastrophic” impact on public health and the environment and pose “significant potential to derail returns”, according to a report backed by pension fund giant APG.The report from the $3trn (€2.6trn) investor network FAIRR and specialist consultancy ARE (Asia Research and Engagement) urged investors to treat the rise of intensive factory farming across Asia with extreme caution and warned them to keep a close eye on the long-term risks of food-related assets across the continent.Jeremy Coller, founder of the FAIRR Initiative and CIO of private equity firm Coller Capital, said: “Asia’s meat, seafood and dairy industries face a range of badly managed sustainability risks – from emissions to epidemics, fraud to food safety, and misuse of antibiotics to misuse of labour. All these issues have significant potential to derail returns.”The report highlighted OECD predictions that Asian meat supply would grow 19% by 2025, generating some 346m tonnes of greenhouse gasses – equivalent to running 100 coal-fired power plants. It also predicted that Asia would increase its use of antibiotics by over 120% in chickens and pigs alone, using 51,000 tonnes of antibiotics by 2030. The World Health Organisation and the United Nations have previously warned that excessive use of antibiotics could lead to the medicines becoming less effective.The FAIRR report said that Asia was still beset by food safety scandals. Most recently, eggs produced in Taiwan were found to have high levels of dioxins, a toxic substance often found in herbicides and pesticides. Three years ago, the news that a Chinese supplier to McDonalds and Yum! Brands was using expired meat led to a combined hit to the two companies’ market cap of $10.8bn.Stuart Palmer, head of ethics research at Australian Ethical Investment, said that population growth, urbanisation and rising incomes in Asia had resulted in a mass shift from traditional farming to industrial farming. “But the model is broken,” he said. “From antibiotics to animal feed, the inputs that Asian factory farms rely on to do business are proving catastrophic for public health and the environment.“It is crucial that investors understand the rapidly evolving Asian food landscape in order to safeguard the value of their investment portfolios and to support development of sustainable food production and consumption models.”However, the report emphasised some “excellent investment opportunities”, such as Quorn – a meat substitute owned by by Asian food giant Monde Nissin, which saw global sales rise by 19% in the first half of 2017.Note: A previous version of this article referenced the California State Teachers Retirement System. This was an error contained in the press material, and this fund has not officially backed the report.
Swedish national pension fund AP6 — which invests solely in private equity — reported a 12.3% overall return in 2017, almost twice the investment profit it had made the year before.The Gothenburg-based state pension buffer fund said the return on capital actually invested in private equity funds and unlisted companies reached a record high of 20.3% for 2017, up from 9.5% the year before.Karl Swartling, chief executive of the Sixth AP Fund, said: “The return for the year is a result of a deliberate effort to restructure the portfolio and a high investment rate over the past five years.”He said a good flow of attractive investment opportunities from existing and new partners had resulted in many new investments in 2017. “Our striving to be selective in terms of partners and holdings is an important reason for the year’s good results,” Swartling said.Smaller than Sweden’s other four buffer funds, AP6’s total capital grew to SEK 31.6bn (€3.16bn) by the end of 2017 from SEK 28.1bn a year before.AP6 is a closed fund, neither receiving new resources from the Swedish state nor disbursing money into the pension system, and holds assets both in the form of deployed capital and liquidity.The pension fund says the balance between the latter two can vary widely from year to year, being affected, for example, by large divestments.In 2017, the investment rate was still high and a large number of new fund commitments were completed, the fund said, with 10 new direct investments implemented.The fund reported that it finished the year with 36% of its assets in direct investments, 34% in funds and 30% in liquid instruments. This revealed a decrease in liquidity from the previous year, when these proportions had been 28%, 31% and 41% respectively.Over the last five years, AP6’s annual return on capital employed has been 11.6%, it said.AP3 scales back on hedge fundsSweden’s AP3 pension fund posted an 8.9% return for 2017 and said it had worked on cost-saving measures during the year — partly by cutting the proportion of hedge funds held in its portfolio.Releasing its annual report, AP3, which is based in Stockholm, said total fund capital increased to SEK345.2bn by the end of 2017 from SEK324bn a year before.Kerstin Hessius, the pension fund’s chief executive, said: “Over the year, we worked to contain costs by moving into smaller premises and by reducing the share of hedge funds in the portfolio.”AP3 had also intensified the cooperation among the AP funds in 2017, she said.The pension fund’s return before costs of 8.9% is broadly in line with the 9.1% and 9.2% returns before costs reported by AP2 and AP4 respectively earlier this month.AP1 has yet to report full-year figures.AP3 said it had outperformed its benchmark portfolio by 2.1 percentage points after costs in 2017.During the year, the pension fund paid SEK7.37m into the Swedish pension system, up from the SEK6.64m outflow of 2016.
Credit: AdegePlastic waste could become an issue for financial reporting and risk analysts, according to MSCI“While all eyes remain on the trade war between the U.S. and China, another global trade war, in waste, is beginning to unfold.“How the world addresses the disruption it creates will have ripple effects across multiple industries and countries, ripping the issue from the pages of glossy sustainability reports and thrusting it into investor presentations and financial filings as a subject of business risks and opportunities.” ESG regulation targets investors“In 2019, the script flips, and it isn’t just companies that are fielding ESG-related disclosure requirements. Investors will see escalating demands as regulators ramp up scrutiny beyond primarily issuers to focus on the business of ESG investing.” Solving the data dilemmas“In 2019, as we look out onto the next decade for ESG ratings, having more data will be the easy part. The hard part – and the important part – will be knowing how to identify and apply the most relevant signal and achieve better-differentiated investment objectives.” ‘Leadership in the age of transparency’“Investors are starting to insist that, while the parade of CEOs behaving badly may be difficult to predict and avoid, replacing them and cleaning house in the wake of a scandal should not be.“As a result, 2019 may mark a turning point for investors tired of paying the cost for companies slow to adapt when the internal becomes external and the whole world can judge misconduct for itself.” “In 2018 a number of reports came out where the kind of [climate change] timelines we are looking at are much closer than people had thought,” said Linda-Eling Lee, global head of ESG research at MSCI.“Within the lock-up periods of some types of private investments, many could see their projects implicated in climate-related problems and facing enhanced regulations before their payout”MSCIIn its latest report on the impacts on global warming, the Intergovernmental Panel on Climate Change (IPCC) said it was vital to maintain the global temperature increase below 1.5°C versus higher target levels.Emphasising the relatively near-term timeframes, MSCI singled out the IPCC’s comment that “transition challenges as well as identified trade-offs can be reduced if global emissions peak before 2030 and marked emissions reductions compared to today are already achieved by 2030”.If not, added MSCI, by 2040, the atmosphere’s temperature will have risen by 1.5°C, inundating coastlines and intensifying drought, poverty and subsequent migration.“Many investments take shape in a time frame that flirts dangerously with the IPCC’s projected time span before emissions need to peak and before an acceleration toward climate calamity,” said the index provider.“Within the lock-up periods of some types of private investments, many could see their projects implicated in climate-related problems and facing enhanced regulations before their payout.”Real estate, according to MSCI, was “a prime example of an asset class that will inevitably be impacted by climate in the next decade”. Some investors have already been paying attention to the so-called physical risks associated with climate change. In 2016, for example, two major French asset owners sponsored a project to develop a methodology to measure how different assets in an investment portfolio are exposed to the physical impact of climate change.From plastic waste to scandal preventionMSCI highlighted four other “ESG trends to watch” in its paper: the fallout from regulatory action on plastic waste; increased regulation of ESG investments; greater focus on extracting meaningful signals from ESG data; and increased investor demand for board diversity and refreshment. The plastic waste trade war Investors are beginning to consider the possibility that the worst outcomes of climate change will not be avoided, according to index and analytics provider MSCI.MSCI said in an outlook paper that those investors already incorporating climate considerations into their portfolios were working on the underlying assumption that “some combination of technology and policy forces will limit emissions going forward, such that we can avoid the worst outcomes of climate change”.However, the possibility that this would not happen was “working its way into investor thinking in 2019”, the company said. This was particularly the case for investors in less liquid assets, for whom valuations were routinely linked to longer-term timeframes.
Sweden’s AP4 has reported strong returns in the first half of this year — 13% after costs compared to 3.8% this time in 2018 — with the head of the Stockholm-based fund warning that these were a clear sign of continuing market volatility.Niklas Ekvall, chief executive of the national pension buffer fund, also repeated criticism of the latest batch of government-proposed changes to the investment rules for AP4 and the other three main AP buffer funds, saying a new set of rules to give the funds enough flexibility was now urgently needed.The 13% return was AP4’s highest return for a single first half-year since the start of the new pension system in 2001. Ekvall said the extent of the first half return was very gratifying. “But it illustrates perhaps above all the volatile market environment that we currently find ourselves in, and the fact that evaluation of a pension fund must be done over a long period of time in order to be meaningful,” he said in the fund’s interim results statement. AP4’s total assets rose to SEK391.4bn (€37.1bn) at the end of June. The latest step in the ongoing reform of the state pension buffer funds’ investment rules was a bill published in May with the stated intention of increasing the funds’ cost efficiency and return potential and giving them the same set of options open to similar investors regarding long-term illiquid assets, while also increasing sustainability.In the ensuing consultation the bill has been criticised by AP1-4 and other stakeholders as being too limited.In AP4’s results statement, Ekvall said: “In its response [to the consultation], AP4 points out that the memorandum’s proposals do not go far enough to achieve the previous statement about the legislative change, and that it is urgent to now create a set of rules that give the AP Funds sufficient flexibility to be able to operate in a rapidly changing financial market for many years into the future.”He added that the proposals, despite their intentions, did not provide the funds with similar conditions in comparison to comparable institutional investors.AP4 reported a SEK45.2bn return between January and June, with the portfolio’s active return exceeding its benchmark by 1.7 percentage points — corresponding to a profit contribution of SEK5.8bn, it said.The fund paid SEK3bn to the state pension system in the period, and total costs amounted to 0.1% of average assets under management, it said.
Norway’s Public Service Pension Fund, Statens Pensjonskasse (SPK), has announced it is offering 12 of its case workers to help the now hard-pressed welfare agency, NAV, process applications for unemployment benefit, which have risen as a result of the COVID-19 pandemic.The head of the NOK551bn (€47.2bn) pension fund, which is owned by the Ministry of Labour, said operations at SPK had now normalised allowing it the flexibility to help the welfare agency, although most of the fund’s staff were working from home.Finn Melbø, chief executive officer of SPK, said: “This has enabled us to offer NAV assistance in their important task of helping people who have fallen into an emergency situation.”He added that the resulting temporary reduction in the pension fund’s workforce during the period of secondment would not affect the level of service it gave its members. SPK said NAV was now receiving thousands of applications for unemployment benefits on a daily basis, with the coronavirus pandemic putting great pressure on the agency’s own case workers.It was a very demanding time for both the Norwegian economy and the labour market as a whole, the fund said.Sigrun Vågeng, work and welfare director at NAV, said she was grateful for SPK’s help: “We are looking forward to getting 12 skilled and experienced case workers who can quickly settle into our tasks and help people who have now fallen into a difficult situation,” she said.The two organisations are now discussing how the plan will work in practical terms, with the SPK staff due to begin assisting the welfare agency from 1 May, for a period of three to six months, according to the pension fund.According to NAV’s statistics, 2,700 people applied for unemployment benefit in Norway yesterday. While this was lower than the daily level seen earlier in the pandemic, the agency said, the number was still five times more than the average NAV received each day before the coronavirus crisis.SPK is Norway’s largest public-service pensions provider for current and former employees of the state, the educational system, those working in research, pharmacies and other organisations, with 1.1 million scheme members in total.
The property is the epitome of opulence.More from news02:37International architect Desmond Brooks selling luxury beach villa14 hours ago02:37Gold Coast property: Sovereign Islands mega mansion hits market with $16m price tag2 days agoIt has a seemingly endless list of luxury features as well as quirky characteristics, including detailed wallpaper and a waterslide, that set it apart from many prestige properties.With lavish chandeliers, walls of floor-to-ceiling windows and modern fixtures and fittings, it is the epitome of opulence.It has a media room, home office, games room and gym.There are multiple indoor and outdoor entertainment areas, including a grassed area at the heart of the house surrounded by glass bi-fold doors.The rear outdoor entertainment area, which overlooks the Nerang River, is divided in two by a shallow pool. The Monaco St mega mansion is listed for $7.995 million.LOOKING for the perfect Christmas gift?A Broadbeach Waters mega mansion is slightly more affordable after having its price slashed by almost $2 million just in time for the festive season.The waterfront property on Monaco St is on the market for $7.995 million — $1.755 million less than it was listed for last month.The house is on a 1897sq m block and has six bedrooms, including a separate attached apartment, and seven bathrooms spread across two floors. It has multiple indoor and outdoor entertainment areas, including a grassed area at the heart of the house. Video Player is loading.Play VideoPlayNext playlist itemMuteCurrent Time 0:00/Duration 4:18Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -4:18 Playback Rate1xChaptersChaptersDescriptionsdescriptions off, selectedCaptionscaptions settings, opens captions settings dialogcaptions off, selectedQuality Levels576p576p400p400p320p320p228p228pAutoA, 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 Rate1xFullscreenNovember 6: Prestige listings04:19
Water from the shallow pool cascades into the fully-tiled infinity edge pool, which has a water slide.There are also grassed areas, a spa and steam room.Ray White Prestige Gold Coast agents Matt Gates and Sherry Smith are marketing the property. The waterslide will be the selling point for the kids.
The casual living area. In a different wing of the home is a second kitchen, which is just as lavish as the first, an ensuited bedroom with a walk-in wardrobe and a living area. This zone will make hosting guests a breeze. The rumpus room, an office with custom cabinetry, home cinema and a temperature-controlled wine cellar are also found at this end of the home. Upstairs are three bedrooms — two sharing an ensuite, the other with a private ensuite. The main bedroom with floor-to-ceiling curved windows that frame water views, a private balcony, ensuite and custom-designed dressing room is also upstairs. 55-57 Charolais Cres, Benowa Waters, is an opulent mansion on the market. House hunters seeking a residence of distinction will feel right at home in this grand abode.Space is delivered in spades at the Benowa Waters house, which has the whole family and guests accommodated for. This is the first of two kitchens. Make a grand entrance. The vast size of the property was what captured the attention of Amy and Dave Hodge in 2017. “Not many houses can accommodate five cars or have this much land to play with,” Ms Hodge said. “We knew it would be ideal, as well, for our kids.” READ MORE: What $1.4 million buys you around the worldREAD MORE: Before and after: behind the creation of a trendy Mermaid Beach home A pool and tennis court are two luxury inclusions. A room for more formal occasions. The main bedroom is very spacious. The gated estate sprawls across a 2302sq m waterfront block and features a tennis court and in-ground pool. Adding to the resort-style lifestyle is a floating pontoon and boat ramp with main river moments away. The property offers 1022sq m of internal living, which boasts a luxury Hamptons style with a touch of European class. “Everything about this house is big — it’s 110 squares and it’s been excellent for living and entertaining,” Ms Hodge said. “We’ve hosted parties here and have also really enjoyed the floorplan, we will definitely miss all the space.” More from news02:37International architect Desmond Brooks selling luxury beach villa12 hours ago02:37Gold Coast property: Sovereign Islands mega mansion hits market with $16m price tag2 days ago
The second kitchen, in the guests wing, is also very luxurious. The wine cellar is also noteworthy.Past the circular driveway and porte-cochere, a formal entrance features a grand staircase, crystal chandelier, marble floors and 16ft ceilings. One side of the floorplan is dedicated to the main living areas, with a formal lounge and dining room and open-plan family room. The first of the home’s two kitchens takes centre stage here. It has all the essential ingredients including two Miele ovens, an Ilve oven, Zip tap, two integrated dishwashers and a luxuriously large Calacatta-topped island bench. The spacious living room is warmed by a fireplace and opens to the covered veranda and alfresco dining area with a built-in barbecue and pool views. Outdoor entertaining is covered. 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 Levels720p720pHD576p576p432p432p270p270pAutoA, 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 Rate1xFullscreenStarting your hunt for a dream home00:51 Grab the popcorn! And of course, a spot to park the boat. “The location has been great, you’re not far from (the) Isle of Capri or Pacific Fair as well as some great private and public schools,” Ms Hodge said. “We will really miss the space, the beautiful hedging and having a separate wing for guests made a huge difference too.“The floorplan and land size really has been fantastic.” The five bedroom house is being marketing by Kollosche agents Michael Kollosche and Eddie Wardale and has a $3.975 million price tag.