Three-quarters expected the outsourcing trend to continue, citing the increasing complexity of administration.As much as 90% of respondents said they expected the complexity of the regulatory environment concerning labour and tax legislation to increase over the next 10 years.Additionally, the volume of assets in the pension funds is increasing, and companies want to focus on their core business and other HR issues.Both factors have also contributed to a greater need by pension fund members for information, which 82% of the companies expect will increase.At the beginning of December, Towers Watson announced it had been re-awarded the administration for the pension plans of the Bosch group, including the €2.5bn Bosch Pensionsfonds, after the mandate was tendered at the end of a five-year-term.The outsourced mandate covers pension arrangement for 200,000 employees and is as yet the largest outsourcing mandate of its kind.Bernhard Wiesner, senior vice-president of corporate pensions and related benefits at Robert Bosch, said: “By hiring a qualified specialist service provider, we can ensure very efficient and at the same time lean administration processes for our occupational pension plans.”He added his company could not have set up the administration “as economically” on its own. The number of German pension funds outsourcing administration is growing, Towers Watson has found in a study citing increasing complexity is the main reason.In total, 83% of the 65 companies the consultancy surveyed were already using external service providers for occupational pensions administration.When the survey was last done in 2011, the share was 67%.Another 17% are planning to outsource pensions administration for the first time, or add other services to the outsourced mandate.
PGGM, Edmond de Rothschild Asset Management, AXA Investment Managers, Pension Insurance Corporation, Friends Life, Columbia Threadneedle Investments, F&C Investments, Aviva Investors, Walker Crips, Ashcourt Rowan, City Noble, Burges SalmonPGGM – The supervisory board of the €178bn asset manager and pensions provider has appointed Paul Boomkamp as its new chief financial and risk officer. He will also become a member of the company’s executive committee as of 1 September. He is to succeed Paul Loven, who will leave to start a bureau for coaching and board advice. Currently, Boomkamp is a member of the executive board of the Catharina Hospital in Eindhoven. Previously, he was a management consultant at McKinsey, and he has held executive roles at insurer AXA Netherlands. Before then, he was director at Aegon Netherlands, responsible for life insurance and mortgages.AXA Investment Managers – Florence Dard has been appointed head of France with responsibility for sales, marketing and client services. She will also become a member of AXA IM’s executive committee. Based in Paris, she will report to Christophe Coquema, global head of Client Group. Dard is to lead French sales, marketing and client services teams and will contribute to the strategic development of AXA IM across all client segments in the country. Dard joins from Edmond de Rothschild Asset Management, where she held a number of senior positions from 2010, including head of European institutional sales and sovereign wealth funds and head of French institutional sales.Pension Insurance Corporation – Rob Groves has been appointed CIO at the defined benefit pension fund insurer. He joins from Friends Life, where he held a similar position. Before then, he worked at UBS, Commerzbank and Towers. Groves will have responsibility for the management of the company’s £14bn (€19.4bn) portfolio, including asset and liability management, manager selection and interest rate and inflation hedging strategies. Columbia Threadneedle Investments – Mark Nichols has been appointed portfolio manager in the European equities team. He joins from F&C Investments, where he was director and fund manager in the European Equities team. Before then, he worked at Lehman Brothers and Invesco.Aviva Investors – Ed Casal has been appointed chief executive of global real estate. Casal, who has been with the investment manager since 2008, replaces Ian Womack, who is retiring next month. Casal was previously CIO of Aviva’s real estate Multi Manager and currently holds the position of managing director of global indirect real estate. He will take up his new role next month.Walker Crips – Christine Little has been appointed operations manager for the Wealth Management and Pensions business. She joins from Ashcourt Rowan, where she was head of business quality. Prior to that, she was a pensions analyst and consultant at Pension & Benefit Services.City Noble – Gavin Moffatt has been appointed an associate at the pensions and investment advisory. He was previously chairman of the SPP’s Money Purchase Committee and has worked in the consultancy and insurance sectors, providing compliance and technical support on a business-wide level.Burges Salmon – Richard Pettit has been promoted to partner in the Pensions team, effective 1 May. Pettit, who joined Burges Salmon as a trainee in 2004, advises companies and pension scheme trustees across the “full range of pensions issues”.
The Bank of England has praised the European Insurance and Occupational Pensions Authority’s (EIOPA) recent pension stress testing, noting the “merit” in developing a stress test for the wider financial sector.In a report on its plans for banking sector stress testing, the UK’s central bank discussed the possibility of stress tests for the wider financial system.It noted that the use of stress tests had increased “substantially” since the 2008 financial crisis and had already been conducted for the banking sector, general and life insurers.“Consideration is also being given to supervisory stress tests of other sectors,” the report continued, noting the possibility that central counterparties (CCPs) could be subject to further investigation. Benoît Cœuré, a member of the European Central Bank’s executive board, has previously spoken of the need for CCPs to be “exceptionally robust”, while financial stability commissioner Jonathan Hill has promised to work with the US on a resolution framework for the industry.The report went on to note recent pension fund stress tests conducted by EIOPA, which concluded in August and said that such exercises were becoming increasingly important for macro-prudential policy.“The Bank believes there is merit in seeking to develop tools for stress testing the UK financial system as a whole,” it said. It argued that such a wider stress test would be in line with its financial policy committee to monitor financial stability risk beyond the banking sector.It added that any wider-ranging stress test would examine not an individual company’s ability to withstand shocks but rather broader systemic risks and how these might impact providers in the UK.Pension funds would be captured by the proposed stress test, as any change in their “willingness” to hold certain assets could lead to declining asset prices, which would in turn impact other market participants.The Financial Stability Board (FSB), chaired by Bank of England governor Mark Carney, recently suspended work on regulation for asset managers and the systemic risk posed by the sector.During the FSB’s consultation, asset managers were critical that parts of the pension sector were not captured by the Board’s definition of systemically important financial institutions.
A UK exit, or Brexit, from the European Union would pose little threat to asset managers’ creditworthiness and have minimal impact on the management of institutional assets, according to Moody’s.The ratings agency said there would be no immediate changes to asset managers’ operations in the event of a vote to leave because the UK would have two years to renegotiate its terms of trading and dealing with the EU.It said the operational and business impact for most managers it rates would be manageable.UK managers will lose management and marketing passporting rights because they would become “third-country firms”, but Moody’s does not expect this to have “profound implications for the asset management industry overall”. This is for several reasons, including that many UK groups operate in Continental Europe through subsidiaries, and vice versa for Continental European managers.Financial market volatility resulting from Brexit, however, will weigh on asset managers’ profitability.Neither will Brexit have much impact on the management of institutional assets, according to Moody’s.It noted that the Markets in Financial Instruments Directive (MiFID) applies in the EU with respect to institutional clients’ private placements or segregated accounts.It said it expected the UK, if it left the EU, would “meet the equivalence test and be able to continue servicing institutional investors in the EU”.Moody’s also noted that any asset-manager services provided “at the exclusive initiative” of institutional investors have no prerequisite requirements.If the UK, however, decides to depart from EU regulation and not implement the revised MiFID, then “servicing EU clients from the UK would become more difficult”.This is not Moody’s main scenario, it said.
The Dutch pensions industry could seek to increase ties with France should the UK decide to leave the European Union in June’s referendum.Speaking at an Institute for Pensions Education conference, Gerard Riemen, director of the Dutch Pensions Federation, said the Dutch pensions industry had cooperated with the UK on pensions issues often and that a vote for Brexit would be seen as a great loss.“The UK is a partner that thinks along the same lines we do,” he said.“They have a pension-fund sector with a lot of capital, like us.” He said the Dutch industry would lose a “close friend” in the event of a Brexit, and that it would need to reassess its relationship with other European pension systems.He said the Dutch pensions industry communicated regularly with Germany’s, “but, because pensions over there are largely paid from financial reserves, their system differs from the Dutch one”.“There is a reason,” he added, “why we have stepped up investing in our relationship with the French.”Riemen said the French, like the Dutch, valued risk-sharing and solidarity in pensions, although he acknowledged that, in France, these principles are implemented in the first pillar, not through capital funding.He noted, however, an increasing interest in France for capital-funded pensions, similar to those found in the Netherlands.Janwillem Bouma, chairman at PensionsEurope, said he would also like to see the UK remain within the EU.He cited the financial transaction tax, the IORP II Directive and plans for European solvency rules for pension funds as areas where the Netherlands and the UK would cooperate.A spokesman for the Dutch Pensions Federation also highlighted the European Market Infrastructure Regulation and the proposed Capital Markets Union as areas where the Dutch could work with the “influential” UK pensions sector. Riemen did not, however, rule out cooperating with the UK on pensions altogether, even if it did vote to leave the EU.“Non-EU members, such as the Swiss and the Norwegians, are also represented in Brussels, after all,” he said.
Fisch Asset Management – The Swiss firm has appointed Juerg Sturzenegger and Philipp Good as joint chief executives, effective 1 January 2017. They will be taking over from Patrick Gügi, who has been chief executive for nine years. Sturzenegger is an external hire, having most recently been a consultant on strategic and operational matters for Swiss financial institutions, while Good has been head of convertible and corporate bonds at Fisch. Sturzenegger’s previous positions include COO, CIO and co-chief executive at VP Bank Group, Liechtenstein. Gügi will remain a member of the board of directors.Erste Asset Management – Alexander Lechner is to become the head of multi-asset management following a reorganisation of this department, with discretionary portfolio management having been spun out into a self-contained department at the beginning of December. Mixed fund solutions for retail and institutional investors remain with multi-asset management. Lechner was previously a fund manager with Erste AM. Jürgen Wurzer will join the asset manager as senior fund manager, having previously worked for Macquarie Investment Management. Thomas Bobek has been head of the new discretionary portfolio management (DPM) department since the beginning of December, having previously held a managerial position in asset management with Credit Suisse in Vienna. He was head of equity at ERSTE-SPARINVEST from 2003 to 2011. Style Research – Sally Tennant has joined the investment research and portfolio analytics provider as chair of the board of directors. In addition to her role at Style Research, Tennant is chair of Duncan Lawrie Private Banking, vice-chair of the advisory board of Paladin Capital Group and a director of Ledunfly. She served as chief executive at Kleinwort Benson (2011-14), Lombard Odier (UK) and Schroders Private Banking.OppenheimerFunds – Doug Stewart has been appointed head of European, Middle East and Africa distribution, based in London. Stewart joins from AllianceBernstein, where he worked for 14 years. Most recently, he was managing director at the EMEA Client Group, responsible for client relationship management, team monitoring and expansion in institutional markets. City Financial – The investment management firm has made four senior operations appointments, hiring Amy Wong, William Dumas, Justin Brodersen and Simon Taylor from Fortress Investment Group. They joined City Financial with effect from 1 December and report directly to Lou Thorne, global COO, with whom they worked at Fortress Investment Group in the liquid markets business. Wong, Dumas and Broderson will be based in New York, and Taylor in London. Thorne was appointed COO in early November. Hermes Investment Management, HSBC Bank UK Pension Scheme, Volo Pensioen, Fisch Asset Management, VP Bank Group, Erste AM, Credit Suisse, Style Research, Oppenheimer Funds, AllianceBernstein, City Financial, Fortress Investment GroupHermes Investment Management – Colin Melvin, who was global head of stewardship at the asset manager, has left the firm. In a note on his LinkedIn profile, Melvin wrote: “After 14 years at Hermes, I am taking some time out and looking forward to planning a further contribution to the sustainability of asset management.” Melvin was appointed to the new role of global head of stewardship in February this year, having previously been chief executive at Hermes Equity Ownership (EOS). He reported to Leon Kamhi, head of responsibility at Hermes Investment Management, who will take over Melvin’s stewardship responsibilities.HSBC Bank UK Pension Scheme – Russell Picot will be chair of the pension scheme’s trustee board as of 1 January 2017. He will be taking over from Tony Ashford, who is also chair of the Unilever UK pensions scheme trustee board. Picot is also a trustee director at LifeSight, the WillisTowersWatson UK MasterTrust, and special adviser to the FSB’s Task Force on Climate-related Financial Disclosures. He is an ambassador for the International Integrated Reporting Council (IIRC).Volo Pensioen – The recently authorised general pension fund (APF) of Dutch asset manager PGGM has made board appointments. Frans van der Horst has joined the board, as has Johan van der Tas. Erik Goris is chairman.
The UK’s largest charitable foundation gained 20% from its private equity allocation in the 12 months to the end of September – including a 50% return from co-investments.However, in its annual report, the £25.9bn (€28.7bn) Wellcome Trust’s trustee board said it expected more muted returns from the asset class in the years ahead.The foundation posted a 13.4% investment return for the period, compared with 16.9% for the previous year, when results were underpinned by buoyant equity markets in Europe and emerging economies.It brought the trust’s annualised return over five years to 14%, and to 11.7% a year over 10 years. Source: Wellcome CollectionThe Reading Room at the Wellcome Institute in LondonHowever, the trustees said: “The long-term performance of private equity funds has attracted significant flows of new capital into the asset class, with the result that there is now an unprecedented amount of uncalled funds in the industry waiting to be deployed. This means new deals are extremely competitive and entry prices are rising. Expectations for future returns are therefore more muted than those we have been enjoying in recent years.”On venture capital, the trustees said: “After a long period when companies have been opting to remain private for longer, there have been signs that the IPO market is back in vogue, with high profile listings of companies like Dropbox and Spotify. One reason might be that more mature companies have found that employees want liquidity from their stock options, which is easier to provide as a public company.”Other assetsPublic equities – 52.1% of the Wellcome Trust’s portfolio – made a 9.9% return, lagging behind the 13.5% sterling return from the MSCI AC World index. Hedge funds gained 10.5%, while the performance of the trust’s property portfolio was mixed, returning 5.9%. Within the property allocation, the agricultural portfolio and residential assets in London and south-east England were marked down, in response to a market struggling under the uncertainty of Brexit, the trustees said. However, other assets made a strong positive contribution.Meanwhile in February 2018, the trust issued a 100-year £750m bond, in anticipation of an increase in interest rates as the era of quantitative easing came to an end. The 2.517% coupon was the lowest interest rate ever achieved by any corporate issuer in the sterling market, for a bond with a maturity longer than 50 years. Private equity, which made up 24.8% of the portfolio, returned 20.2%. Within this, private co-investments gained 50.1% while venture capital funds were also a standout performer, with a 32% return.
Johan Magnusson, CEO, AP1Magnusson said AP1 was currently exceeding its long-term goal by a good margin. Over the past 10 years, the fund made an average 7.4% annual return after costs in real terms.“For the individual year 2018 the result was in line with our expectations,” he said, adding that real estate and private equity funds had developed positively.AP1’s wholly-owned real estate subsidiary Willhem and property company Vasakronan – which it owns in conjunction with AP2, AP3 and AP4 – reported returns of just over 20% each for the year.Equities generally performed poorly for AP1 last year, Magnusson said, including those in emerging markets and within the fund’s quantitative portfolio.The fund’s total assets fell to SEK324bn at the end of December, from SEK333bn a year before, after feeding SEK6.8bn into the state pension system during the year.The other three main buffer funds have all now reported 2018 figures, with AP4 yesterday posting a 0.2% loss, following news earlier in the week of a 0.6% profit for AP3 and a 1.3% loss for AP2. The chief executive of Sweden’s AP1 national pension fund says its real return target of 4% is likely to get harder to beat, amid signs of a shift in financial market conditions.Johan Magnusson, who has led the SEK324bn (€30.6bn) state pension buffer fund since 2008, issued the warning in its annual report, released today, in which AP1 revealed a 0.2% investment loss in 2018.The chief executive said: “For several years now we have been saying that the extremely favourable returns on the financial markets are not sustainable in the long term.“We can now see signs that conditions are changing, and we therefore anticipate a growing challenge in terms of achieving our real return target of 4%.” The annual target, which applies for rolling 10-year periods, will be reviewed by the supervisory board during the course of this year, AP1 said.The 2018 loss amounted to 0.7% after costs – SEK2.1bn in absolute terms – and was down sharply from the 9.6% gain the fund made in 2017.Despite the loss, AP1 said it beat its benchmark by 1.7 percentage points last year.
The rest of the minister’s speech was mainly about “ESG” – climate change was name-checked – and pension funds’ responsibilities and power in this regard.If pension funds’ were genuinely committed to being long-term investors, ESG “has to dominate” because otherwise there won’t be a long-term, said Opperman.‘Hogwash’ ideasWhilst some trustees were taking action, others were not, and “sometimes we seem to be in a state of learned helplessness,” he added.According to Opperman, “a very senior member” of the PLSA – the UK’s main pension fund association – had spoken about trustees being very limited in what they could do and the danger of spending a lot of time talking about ESG.This, Opperman said, was “hogwash”.“If trustees and asset owners cannot do anything, where do they think the power lies, and also, what are you doing in the job?,” he said.“As I always say, if you want to change the world, there’s one really simple thing: look in the mirror,” Opperman told delegates.He argued the UK government was “doing a huge amount to decarbonise” and said “it has to be asked: what are you doing?”.He suggested trustees should fire asset managers “struggling to have an impact” – for example those who did not support climate resolutions. The UK pensions minister today said the early general election does not spell the end for recently introduced workplace pensions legislation, and that pension scheme trustees have the power to change the world, and should use it.Guy Opperman made the comments in a speech delivered to delegates attending a conference held by the Association of Member-Nominated Trustees (AMNT), whose co-chair David Weeks described the session with the minister as a “humdinger”.On the pension schemes bill, whose legislative passage has been interrupted by the vote for a general election in December, Opperman said it had cross-party support and that whatever government the election produces “in my view can and will bring [it] forward”.“So whilst there has been a pause it does mean to say that this bill ceases to exist or that it will not continue,” he said. Source: PLSA“Your capacity to make a difference is immeasurable. I urge you to use it”Guy Opperman, pensions minister“You have so much power,” the minister told delegates. “Your capacity to make a difference is immeasurable. I urge you to use it.”TCFD disclosure guidance ‘coming soon’Opperman then spoke about the Task Force on Climate-related Financial Disclosures (TCFD), saying that although there was a government expectation for large asset owners and listed companies to disclose in line with the TCFD’s recommendations by 2022, pension fund trustees should not wait.It could be “a badge of honour” to disclose before 2022.His view was that TCFD-aligned reporting should be made mandatory, Opperman said. He told delegates the Department for Work and Pensions would be delivering guidance on this soon and that he wanted to “empower trustees to challenge their investment managers and ultimately deliver real change in the companies they invest in”.A government spokesperson did not respond to queries from IPE about this guidance by the time of publication.Delegates also heard Opperman say he wanted to see “more of a mixed economy develop in the exercise of voting rights and engagement,” encouraging trustees to sign up to the UK’s new Stewardship Code .According to the minister, one of the Code’s principles for asset managers and asset owners “creates the expectation that asset managers will comply in aligning their stewardship and investment approaches to the trustees that have hired them, or explain why not”.Opperman has in many ways taken up the cause of the AMNT that fund managers need to accept client voting policies in pooled fund arrangements. The association in May urged the Financial Conduct Authority (FCA) to investigate this “market failure”, and this week called on the regulator to respond positively to its complaint.According to Opperman, the regulator was due to hold workshops with asset owners next year to hear about voting and stewardship issues from their perspective.
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 There are five bedrooms including a master suite, four bathrooms, and space for four vehicles.Caesar stone benches, marble flooring, extensive timber cabinetry, a breakfast bar and a full range of top grade appliances can be found in the kitchen.Residents only amenities include a heated pool, sauna, spa, BBQ facilities and onsite manager. The agency hosted the launch party for the property on Sunsuper Riverfire night on September 29, and the campaign photographs have some serious wow factor. The view from the penthouse during RiverfirePlace Kangaroo Point agent Michael Bacon is marketing 701/21 Pixley St — a luxurious two-level penthouse in the Watermark Residences building. “This is probably the crown jewel of city apartments,” he said.“It is the perfect house alternative and at 686sq m is substantially bigger than the average family home.“And the location … I think it could be the best view in Brisbane.” Not a bad spot to get over a hangover“It goes to auction on October 25 and the new owner could easily be in by Christmas and the New Year,” Mr Bacon said. Mr Bacon said the penthouse has 220sq m of terrace space, and had hosted numerous parties for special events like Riverfire and New Year’s Eve.The penthouse has an open plan, two level design with multiple living spaces and floor-to-ceiling windows providing exceptional views of the river and city. How’s that view?WANT to say goodbye to 2018 with a bang? This penthouse at Kangaroo Point could have one of the best vantage points in Brisbane.Today marks 80 days until New Year’s Eve, and a penthouse with arguably the best vantage point recently hit the market.