OGEO beats average Belgian pension fund performance with 7.4% return

first_imgBelgium’s OGEO Fund, which manages statutory pensions for public and semi-public institutions, has reported a financial return of 7.4% for 2013, down from the 9.2% reported for 2012.Assets under management rose to €968m by the end of December from €934m a year before.The profit margin was €53m in 2013.Stéphane Moreau, chairman of the executive committee of the Liège-based pension fund and managing director, said: “We can be proud of our financial return of 7.38%, despite the difficult market conditions during the first semester of 2013.” He stressed the fund’s mission was a long-term one and said performance should not be judged on a single year. However, last year’s return exceeded the average performance of Belgian pension funds of 6.7% in 2013, he said.At the end of last year, the fund’s allocated assets stood at €882m compared with its pension liabilities of €367m, representing an over-financing of 140%.last_img read more

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French investors launch Europe’s first project bonds for digital infrastructure

first_imgA group of French investors has launched the country’s first project bonds in a deal to finance superfast broadband infrastructure in France.The European Investment Bank (EIB) group comprises FIDEPPP (Fonds d’investissement des Caisses d’Epargne), Caisse des Dépôts, Bouygues Energies & Services and Axione — all shareholders of Axione Infrastructures.The investors have been working with the EIB and the European Commission to launch the bond issue. The deal will give Axione Infrastructures €189.1m in bond finance, enabling it to continue and extend the rollout of fast and superfast digital infrastructure in several departments in France, the EIB said. Natixis Asset Management, whose subsidiary MIROVA manages FIDEPPP, has managed the issue, which will finance broadband access in sparsely populated areas.Anne-Christine Champion, global head of infrastructure and projects at Natixis, said: “This public bond issue is innovative in several respects.”She said it was the first project bond in France, and the first in Europe within the telecommunications infrastructure sector to benefit from the EIB project bond credit enhancement programme. “Thanks to the EIB credit enhancement, the bond received a Baa2 rating from Moody’s,” she said.“This structure allows Axione Infrastructures to gain attractive long-term amortising financing by institutional investors.”Project bonds were established as a new form of finance by the EIB and the European Commission two years ago.The bonds were launched with the aim of speeding up the mobilisation of private capital for European infrastructure projects – in particular the rollout of fibre optics in sparsely populated areas, the EIB said.It said its involvement had made the bonds possible because of a 20% senior debt enhancement, which it said made the placement particularly attractive to investors.The EIB said this was the third project bond financed by the EIB in Europe under the project bonds initiative.Axione Infrastructures is 55% owned by FIDEPPP, 30% by Caisse des Dépôts and 15% by Axione.Bouygues Energies & Services and Axione are both subsidiaries of Bouygues Construction.last_img read more

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Dutch pension funds commit €750m to mortgages

first_imgJeroen van Hessen, partner at the company, said he expected the fund to grow to €5bn within three years.The DMFCO is not the only player in the market, as the asset managers Syntrus Achmea and Aegon also run mortgages funds.The fast growth of the DFMCO highlights the current shift in the mortgages market.As Dutch banks have grown more reluctant due to stricter capital requirements, pension funds have begun to fill the gap.“Dutch residential mortgages are attractive to institutional investors because of solid returns and limited risk,” said Van Hessen.“Mortgages investments return 3.5-4%, compared with the alternative of Dutch government bonds. Ten-year bonds generate less than 0.5%.”Van Hessen’s view was echoed by Nick van Winsen, head of internal investments at SPF Beheer, the asset manager for SPF and SPOV.“In particular, since the loan requirements for mortgages have been tightened, mortgages are a safe investment, which also generates a high return compared with other fixed income investments,” he said.Although SPF and SPOV have been investing in mortgages for many years, they are now expanding their portfolio.With these additional investments, the three pension funds also responded to the calls for increased local investments.Pension funds have been under pressure from the government for some time now to invest locally to boost the Dutch economy. Three large Dutch pension funds have committed €750m in total to the Dutch Mortgage Funding Company (DMFCO) through its brand Munt Hypotheken.The €13bn railways scheme (SPF), its €3.1bn sister pension fund for public transport (SPOV) and the €2.8bn scheme of the institute for applied technical research (TNO) have made the investments.Last September, the €55bn metal scheme PMT, the €7.5bn pension fund of Tata Steel (Hoogovens) and the €18bn scheme for the printing industry (GBF) confirmed that they would invest almost €2bn in total in the residential mortgages vehicle.At the moment, the DFMCO has almost €3bn in commitments to Dutch mortgages.last_img read more

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Treasury must ‘tread carefully’ with pensions tax changes – advisers

first_img“Both can be designed to solve the complexity and inequalities of the current system,” he said.He also warned that any move to a new tax regime for retirement saving, particularly to TEE, would need at least three years – and ideally five.At the moment, pension contributions are exempt from income tax and national insurance; so too is investment growth.Pensions in payment, however, are taxed as income, although individuals have the option to take a 25% tax-free lump sum.Under the competing EET or ‘Pensions ISA’ approach, both the individual saver and the employer would contribute to the retirement savings pot, as would the government through a top-up.This top-up component would not be a substitute for tax relief. Instead, it would differentiate the pensions ISA from any other ISA product and replace the tax-free lump sum on retirement.The government has said any reformed tax-incentive regime should be simple and transparent; allow individuals to take personal responsibility for making adequate retirement provision; build on the success of automatic enrolment; and be sustainable.In recent years, the UK population has shown an increasing reluctance to save. Where people are saving, they are tending to save too little. These concerns were recently highlighted in a brief joint study by the Association of British Insurers (ABI) and KPMG.Among other sources, the report cited Scottish Widows’s estimates that 6.2m workers are failing to save anything towards their retirement – some 20% of the population.The Department for Work and Pensions has warned that 11.9m UK adults are failing to save enough for an “adequate income” in later years.The ABI and KPMG argued that regulation, government policy and the structure of the savings and investment management industry could all play an important role in closing the gap.Since October 2012, the process of auto-enrolment has added 5m savers to the UK pensions landscape. A further 5m are tipped to join them.“The question,” Hastie said, “is whether in this tougher environment the current system delivers value for money, meets the government’s policy aims and is sustainable.”He also explained that it was quite challenging to get a true picture of the cost of today’s savings regime. “Whatever the precise figure, the numbers are sufficiently big to be a driver for review,” he said.“The Treasury should focus instead on what is necessary to incentivise adequate retirement saving in line with the policy aims.”Wherever they stand on the issue, experts in the field take the view that any change to the taxation regime around retirement saving will produce both winners and losers.“The current system essentially has a top up, but it is weighted toward higher-rate taxpayers,” Hastie said.But, he said, either system, whether EET or TEE, could be designed to create a more equitable outcome across taxpayers at all levels.“It all comes back to how much money we are prepared to put into retirement funding,” he said.“A lot of the debate has been quite emotional about the form rather than the level of incentive, which is the key driver of what the individual gets when they retire.”Meanwhile, Towers Watson broadly came out against any move to the EET-based model.Policy expert David Robbins told IPE that, although there were arguments both ways, there were nonetheless a number of advantages to taxing on the way out.“First, you are not collecting tomorrow’s tax today,” he said. “Doing that when you know there will be more old people around seems a slightly risky thing to do.“Today’s approach ameliorates one of the problems of an annual approach to income tax.“Allowing people to defer tax payments to the point where they are paying lower rates of tax means that high marginal tax rates are better targeted on people with high lifetime incomes.“Plus, there is also the danger the chancellor could tweak the top up by enhancing it or suspending it, so people have to guess whether now is a good time or a bad time to put money into a pension.” Robbins also warned that there remained the risk that a future government would have to take a second slice of the cake and raise an additional tax on the way out. KPMG has warned that changes to the UK pension taxation regime currently under consideration at the Treasury will fail to plug the country’s £9trn (€12trn) savings gap.The warning comes as the Treasury begins the process of weighing up responses to its recent consultation paper on pension tax reform.The government launched the consultation in July and mulled a shift from today’s so-called Exempt-Exempt-Taxed model (EET) to a Taxed-Exempt-Exempt (TEE) approach.Stewart Hastie, a pensions partner with KPMG in London, said the narrow focus of the debate on two approaches was “missing the point”.last_img read more

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Wednesday people roundup

first_imgAP4, UK Pensions Regulator, Pensionskasse Hoechst, Aberdeen Asset Management, Alecta, Kring van Pensioenspecialisten, UK Financial Conduct Authority, Aon Hewitt, KPMGAP4 – Monica Caneman has announced to Swedish finance minister Per Bolund that she intends to resign as chair of buffer fund AP4 when the next board is appointed later this spring. She has been chairman of the fund since 2008. She said her tenure in the role had been an exciting time to be involved with the pension fund.UK Pensions Regulator – Three non-executive directors have been appointed to the regulator’s board. Tilly Ross and Sarah Smart join on 1 February, followed by Margaret Snowdon OBE on 6 May. The appointments are for four years. They fill vacancies created by the departures of Isabel Hudson and Bruce Rigby to pursue other roles, and that of current board member Tony Brierley, who will step down in July.  Pensionskasse Hoechst – Alexander Helmes, head of asset management at the German chemical company’s pension fund, left at the end of 2015 after seven years in the role. The fund’s chairman, Joachim Schwind, will assume responsibility for asset management until a replacement is hired. Helmes replaced Andreas Hilka in 2008, who until recently was head of pensions at Allianz Global Investors.  Aberdeen Asset Management – Roger Cornick is to retire as chairman and non-executive director at the end of this financial year on 30 September. Simon Troughton, senior independent non-executive director on the board, is to succeed him. Meanwhile, Jim Pettigrew, chairman of the audit committee, also intends to step down from the board on 23 April. A new independent non-executive director will be appointed pending regulatory approval.Alecta – Magnus Billing has been named managing director of the Swedish pension provider. He will succeed Staffan Grefbäck, who remains in the post until Billing steps down as president of Nasdaq Nordic. Billing is also Nasdaq’s senior vice-president of Nordic fixed income and has served as the company’s general counsel. He currently sits on the secondary markets standing committee of the European Securities and Markets Authority.Kring van Pensioenspecialisten (KPS) – The Dutch association of pension specialists has appointed Tim Zuiderman as chairman. He succeeds Helen Heijbroek, who has been at the helm since 2013. Zuiderman is a partner at law firm Onno F Blom Advocaten, as well as a board member of the Dutch association for pension law (Vereniging voor Pensioenrecht).UK Financial Conduct Authority (FCA) – Andrew Bailey has been appointed as chief executive. He is currently the deputy governor for prudential regulation at the Bank of England and chief executive of the Prudential Regulation Authority. He is expected to take up his new role in July.Aon Hewitt – David Bunkle has been appointed as a partner in the Retirement and Investment business. He returns to Aon Hewitt from KPMG, where he worked for eight years as a director, leading a range of pensions and multi-disciplinary engagementslast_img read more

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BT agrees £13bn funding plan to plug pension scheme deficit

first_imgSource: BTBTPS is the largest single-employer DB scheme in the UK with £49.1bn of assets as of the end of June 2017. However, it has long been struggling with a deficit that has grown by more than half in three years.Last year it attempted to switch its inflation measure to reduce the size of future inflation-linked benefit increases, but despite support from the trustees it was rejected by the UK’s High Court in January.Last month BTPS agreed to sell a 60% stake in its wholly owned asset manager, Hermes, to US group Federated Investors, raising £246m.In January, BTPS announced that its chief executive Eileen Haughey would step down following the completion of the valuation. In total, the company stands to pay more than £13bn into the scheme by 2030 – an increase of more than £5.5bn on the last recovery plan, agreed following the scheme’s 2014 valuation.#*#*Show Fullscreen*#*# BT is set to plug its £11.3bn (€12.8bn) pension scheme deficit with a £4.5bn payment spread over three years, as part of its overall recovery plan for the BT Pension Scheme (BTPS).The UK telecoms group will pay in £2.1bn over three years to 31 March 2020 in addition to a further £2bn contribution to be funded by a bond issuance.In addition to a further £400m transfer to the scheme for the financial year 2020-21, the overall total will be paid by 30 June 2020 when the next actuarial valuation is due.The goal was to meet the deficit within the next 13 years, BT said. From 1 April 2020, the company will make additional annual payments of £900m into the scheme for the next 10 years.center_img Source: BTHow BT’s new contribution schedule compares to that agreed in 2014Paul Spencer, chairman of BTPS’ trustee board, said: “The substantial contributions agreed with BT in the near term, together with ongoing developments in the scheme’s investment strategy, are expected to lead to a material improvement in the stability of the scheme’s funding position.”The underlying investment strategy of the fund is set to shift in order to lower “the level of investment risk in the scheme, as well as continuing to de-risk in the future”, BT said. It said that 15% of its assets had already been moved away from growth holdings to lower-risk investments, such as bonds. This provided “a substantial reduction in risk for the scheme and BT”, the company said.For many in the industry, however, the headline figure of £4.5bn towards the overall deficit was the main factor.“The quantum is always welcome,” said Richard Farr, managing director at Lincoln Pensions. “Clearly it is a large quantum because the scheme itself is very large.”“It is a welcome development and others should follow [BT’s] example,” he added.Hybrid scheme plans confirmedThe telecoms group also confirmed plans to launch a “hybrid pension”, which – while technically not a collective defined contribution plan – would be similar in make-up, comprising elements of both defined benefit (DB) and defined contribution (DC) schemes.According to details released by BT, under the auspices of the new scheme members would be able to build up a defined benefit pension on up to a certain salary threshold. Anything over that limit would trigger a contribution from BT into a DC pot, the company said.BT’s plans for a hybrid pension drew particular praise from the Communication Workers Union (CWU), one of the unions representing employees of the telecoms group. CWU said it was clear that it was “the right thing to do to reach a deal with BT over the future of its defined benefit scheme”. Andy Kerr, deputy general secretary of telecoms and financial services at CWU, said: “We feel the size of the pension deficit has vindicated our decision to reach an agreement on the pension scheme which will provide an innovative hybrid scheme with part defined benefit and part defined contribution for our members, lessening future risk for employees.”Unions including CWU and Prospect worked to secure improvements to BT’s DC scheme as well as pay increases. The hybrid scheme plans were initially announced in March, with the aim of closing parts of the DB scheme at the end of this month.#*#*Show Fullscreen*#*#last_img read more

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BlackRock hires in readiness for boom in fiduciary activity

first_imgAlex Pollak, BlackRockIn a message to staff, seen by IPE, Cole said fiduciary management was “one of our strategic growth areas” in the UK.“Trustees are increasingly interested in whole portfolio solutions and understanding their comprehensive investment risks,” Cole said. “We are very excited to welcome Alex to our team and continue our journey to become the number one provider of fiduciary management services to UK pension schemes.”The rule change in December was a result of an investigation into the fiduciary management and investment consulting sectors by the Competition and Markets Authority. One of its proposals to improve competition among providers was for compulsory tendering and retendering of mandates.BlackRock’s Cole told IPE last year that the number of mandates coming to market every year could double.“Historically there has been 80-100 new mandates a year and we would expect that to continue into the future,” he said. “On top of that you have the retenders, and estimates are somewhere in the region of 400. When you bring those together you have about 160 mandates coming to market every year for the next five years.”According to KPMG’s 2019 survey of the UK fiduciary market, there has been an 83% increase in mandates and 139% increase in assets within these mandates over the past five years.Companies including Barnett Waddingham, BlackRock, LCP, Mercer, MJ Hudson, SEI and Willis Towers Watson have all added resources in the past 12-18 months in preparation for higher demand. BlackRock has appointed Alex Pollak as head of clients for its UK fiduciary management business as it prepares for an expected increase in new business enquiries in 2020.Following rules that came into force in December, UK pension schemes must tender any fiduciary mandate that outsources more than 20% of assets. Existing mandates must also be tendered within a set timeframe, which has led several providers and consultants to hire new staff to cope with the increased workload.Pollak has relocated to London from Israel, where he was country head for iShares, BlackRock’s exchange-traded funds arm. He launched the company’s coverage of the country in 2007 and launched BlackRock’s first office and team in Israel in 2018.In his new role, Pollak reports to Sion Cole, who joined BlackRock last year to lead the UK fiduciary business. Pollak will work directly with UK trustees and sponsoring employers to understand their objectives and report on BlackRock’s performance.last_img read more

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EC promises ‘enabling framework’ for green investment

first_imgUnveiled on 11 December, the European Green Deal is the Commission’s strategy for the EU economy to become climate neutral by 2050.Outlining the details of the financing plan, the Commission said that the EU green taxonomy, which has been the backbone of the Commission’s original sustainable finance action plan and focussed on institutional investors, will be used by InvestEU, and that it would explore whether it could be used by the public sector beyond that programme.InvestEU is the successor of the European Fund for Strategic Investments and brings under one roof many other EU financial instruments. The European Commission has said its Green Deal financing plan will create an “enabling framework” to stimulate private and public investment in support of the transformation of the EU economy to meet environmental objectives.Presenting the plan yesterday, Ursula von der Leyen, president of the new Commission, said: “The Green Deal comes with important investment needs, which we will turn into investment opportunities.“The plan that we present today, to mobilise at least €1 trillion, will show the direction and unleash a green investment wave,” she claimed.Valdis Dombrovskis, Commission executive vice-president for the economy, said its plan would “create the right regulatory incentives for green investments to thrive”. Ursula von der LeyenInvestment plan ’will unleash a green investment wave’The Commission also announced the timeline for its already known plan for a renewed sustainable finance strategy. It said it will launch a public consultation on this in the first quarter of this year with a view to presenting a renewed strategy in the third quarter of 2020.It also said it would explore how an EU green bond standard, to be established this year, and “other enabling frameworks”, could increase private and public finance for sustainable investments.Crowding in, improving project supplyThe Commission’s Green Deal Investment Plan also envisages “crowding in” private investment by leveraging the EU’s budget guarantee under the InvestEU programme, with a key role to be played by the European Investment Bank (EIB).Among other measures, the Commission said it would ensure that EIB operations financed under EU mandates “provide high additionality”, both in terms of sectors covered and of the risk profile of financed projects. This would be achieved via improved reporting and monitoring.The Green Deal Investment Plan also includes measures that respond to a frequent investor call for more suitable sustainability-related projects in which to invest.“The availability of investment projects that are compatible with the expectations and requirements from investors does not yet match the demand,” said the Commission.To help bridge this gap, practical support is to be provided to support public authorities and project promoters in planning, designing and executing sustainable projects.Another feature of the Green Deal Investment Plan is a mechanism to alleviate negative socio-economic impacts of changes in the EU economy, in particular the fossil fuel value chain.The Just Transition Mechanism provides targeted support to help mobilise at least €100bn between 2021 and 2027 in the most affected EU regions.last_img read more

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People moves: ESG hires for Danish academics fund, Trucost

first_imgP+, MP Pensions, Trucost, RLAM, RobecoSAM, Sabic, APG, NN Investment Partners, ITS, Aon, HSBC GAM, WTW, DalriadaP+ – The new Danish pension fund for academics P+ has appointed Anna Maria Fibla Møller  as its new ESG senior manager. The fund, which was formed in November from the merger between the lawyers and economists’ pension fund JØP and the engineers’ scheme DIP, said that among other work, Fibla Møller would head up the pension fund’s human rights work and ensure external asset managers comply with its ESG policies.Møller has joined the fund from her most recent role as ESG manager at MP Pension, which covers upper secondary school teachers and psychologists, according to her LinkedIn profile. Prior to this, she also worked for the Danish Export Credit Agency (EKF) as environment and social sustainability advisor. P+ said that while the role Fibla Møller is taking on is not a new one, it has been adapted in connection with her appointment. Trucost – The firm, which is part of S&P Global, has added three employees to its ESG team as it continues to expand its position as a leading provider of ESG data and analytics. The newest team members, Michael Salvatico, Katie Gandy and Vivian Wendan Zheng will further strengthen S&P Global Market Intelligence’s ESG capabilities, having recently launched several key products, including Climate datasets and analytics, SDG and ESG scores.Salvatico joins us as head of ESG business development for the APAC region. He will be based in Sydney and joins from MSCI where he was executive director. He has many years of experience in working in portfolio analytics, quantitative investment analysis and ESG research.Gandy joins as a senior ESG business development manager for financial institutions in the Americas and will based in New York. She brings with her several years of experience in sustainable investing strategies and fixed income portfolio management having worked at several leading financial organisations, including Bank of America. She is returning to S&P after spending a couple of years at Merrill Lynch.Wendan Zheng joins as a senior ESG business development manager for the ASEAN region and will be based in Singapore. She has extensive experience in sustainability strategy, ESG reporting, materiality assessment, and climate change services. She has formerly worked in the sustainability team at KPMG as well as the Global Initiatives NGO. Royal London Asset Management (RLAM) – The manager has named Andrew Epsom as insurance client solutions director. Reporting into John Burke, head of institutional business, Epsom will play a lead role in developing RLAM’s insurance investment and solutions capabilities to enhance service and further grow the external insurance client base.Epsom is a senior commercial actuary with 24 years of actuarial and investment experience. He joins RLAM following five years at Mercer, where he was a principal in the insurance investment team. Prior to that, he spent 13 years at Willis Towers Watson where he was co-lead of the insurance investment advisory group.RobecoSAM – The board of directors of sustainable asset manager RobecoSAM has appointed David Hrdina in the new role of business manager for Switzerland. Currently, Hrdina is head of corporate services and a member of the executive committee at RobecoSAM.The board also decided to bolster the investment management expertise at the company’s executive committee by inviting Rainer Baumann, head of investments, to join the committee. In his new role, Hrdina is to chair the executive committee, which also comprises Sandra Cafazzo, head of sales in Switzerland, and Baumann. The appointments are subject to approval by FINMA, the Swiss financial market supervisory authority.Sabic – Arnout Korteweg has been appointed as independent chair of the €2.5bn Dutch pension fund of petrochemical conglomerate Sabic as of 1 May. He has been an executive trustee at Het Nationale APF, the consolidation vehicle run by Nationale Nederlanden and its subsidiary AZL since 2016. Prior to this, he was marketing leader for the Benelux at Mercer, head of sales at Aon Hewitt as well an institutional asset manager at Robeco. Korteweg is also managing director of pension services provider Lakor.Pensioenfonds  Notariaat – Tanja Stanoevska has been appointed trustee at the €3bn Dutch sector pension fund for notaries and their staff, focusing on audit. Stanoevska is also a board member at the pension fund PostNL and Reisbranche, the scheme for the travel industry. Until recently, she was risk manager at the €27bn Rabobank pension fund. Following her appointment, the eight-strong Notariaat’s board now comprises three female members.PPF APG – Wim van Manen has started as chair of the €1.4bn staff pension fund of asset manager and pensions provider APG, in a position shared with Tinka den Arend. He had been a board member representing pensioners for several years. Prior to his retirement, van Manen has been a labour conditions specialist and independent consultant. At PPF APG he will focus on costs, communication and pensions policy.NN Investment Partners – The asset manager has appointed Marco Willner as head of investment strategy. He will report to Ewout van Schaick, the head of multi-asset, and will be based in The Hague. The firm’s multi-asset team manages more than €30bn in assets under management and designs solutions to help clients achieving their investment objectives. With this new hire, the multi-asset strategy team at full capacity.Willner has more than 15 years of experience in the European asset management industry, specialising in investment strategy, asset allocation and quantitative investing. In the past, he led the strategy team of German asset manager Feri, and advised, as a strategist, the Shell pension funds. Most recently, he co-founded a Frankfurt-based asset manager that is dedicated to quantitative alternative strategies.Independent Trustee Services (ITS) – ITS has named Tegs Harding as a director, as the company continues to pursue ambitious growth plans. Harding is a qualified actuary with more than 15 years of experience in the finance and investment industry, and has previously worked for Mercer as both a strategist and an investment consultant. She has experience in all aspects of investment strategy and implementation, and particular expertise in integrating environmental, social and corporate governance (ESG) considerations within scheme strategies.Her appointment marks the third major hire of 2020 for ITS, which announced the appointment of Ian Terry as sales and marketing director, in January, and John Lovell as director of governance services, in February.Aon – The firm is strengthening its primary insurance broker management team with the appointemnt of Marcel Armon, who will head the its Germany-wide sales activities as chief commercial officer.Armon joins from the Howden Group where he was managing director of insurance solutions provider Hendricks since 2018 and of Howden Broking Group since 2019. Previously, Armon was responsible for the German business of Financial Lines Assekuradeurs Dual, also a Howden affiliate. Armon has a total of 24 years of experience in the insurance industry.Axyon AI – The AI provider for the asset management industry has appointed Elena Bittante as independent board member. Axyon AI operates in close partnership with the renowned AI and computer sciences faculty at the University of Modena and Reggio Emilia.Bittante brings more than 20 years of experience in banking, asset management and insurance to the Axyon AI board. She began her career at McKinsey, after which she held P&L responsibilities at Deutsche Bank and AXA. Alongside her board roles, she currently works as a management consultant.HSBC Global Asset Management – The manager has recruited Maria Ryan to the newly created role of head of institutional sales for the UK, Scandinavia and the Middle East. She will be responsible for developing and growing client relationships across the firm’s institutional businesses in those regions. She will be based in London and report to Brian Heyworth, global head of onstitutional business.Ryan brings almost 30 years’ experience in the asset management industry, most recently at DWS where she held a dual role as head of UK and head of UK and Nordics distribution. Prior to DWS, she was at JP Morgan Asset Management, in roles including client advisor in the UK institutional team and EMEA head of fixed income strategies.BC Partners  – Pascal Heberling is joining the firm’s London office as a partner from the Abu Dhabi Investment Authority (ADIA), where he was a senior member of the private equities investment team. Recruited to help lead the sovereign wealth fund’s move into direct deal-making, Heberling was later appointed a member of the executive committee of the private equities Department and named head of healthcare in 2017.Pegasus – The pensions governance business of Law Debenture has appointed George Norval as senior pensions executive. He was previously group pensions and insurance manager for Berendsen plc, now Elis UK, managing defined benefit assets worth £500m and defined contribution assets worth £100m. He was also chair to the trustees of the Irish DB pensions scheme and chair of the DC governance committee. He has also held senior pensions roles at Kingfisher Plc, NM Rothschild & Sons and The Grosvenor Group.Willis Towers Watson – Cyrille de Montgolfier is the new leader of the consultancy’s French business, Gras Savoye Willis Towers Watson. De Montgolfier takes up the position of head of France on 27 April and will be based in Paris.He has more than three decades of insurance industry. Since early 2019, he was running an insurance M&A boutique, Nemrod Finance, along with two co-partners. Before that he served as CEO of La Parisienne Assurance, a leading private insurance company in France. He also spent 16 years at AXA, and is a member of the French Conseil d’État.Anne Pullum, head of western Europe, Willis Towers Watson, said: “France is a significant and high-potential market for us, both in terms of the scale of our operations there, and because of its sizeable economy and array of dynamic multinationals. Cyrille is a highly respected leader who brings a wealth of industry knowledge and commercial skills to this critical role. He has a strong track record in engaging teams in strategies that deliver high performance and growth.”Dalriada Trustees – Alison Stewart and Paul Tinslay have joined the firm as professional trustees. Stewart was most recently a partner and national operations leader for UK Wealth at Mercer. Tinslay’s previous roles include head of pensions governance at JLT/Mercer, head of client relationship management at AFCA and head of pensions at Towry Law and Wentworth Rose.last_img read more

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Fitch expects ‘fundamental’ investor re-appraisal of mutual fund liquidity

first_imgA spate of redemption suspensions and the coronavirus crisis-induced application of other extraordinary liquidity management tools by global mutual funds will “force a fundamental investor re-appraisal” of the liquidity these funds can truly provide, according to credit rating agency Fitch.This was especially the case where mutual funds were invested in less liquid assets, it said, noting that regulators had identified property, high-yield bond and emerging market debt funds as most exposed to liquidity risk.According to Fitch there have been at least $62bn (€54bn) of mutual fund redemption suspensions this year, the highest annual volume for the past 10 years.These have been primarily driven by valuation uncertainty rather than the outflows that accounted for about two-thirds of cases, by assets under management, over the previous 10 years. “We believe that this will lead to greater regulatory and market scrutiny of how fund managers determine asset valuations and apply liquidity management measures,” said Fitch.It said that mutual funds had benefitted from improvements to market liquidity following central bank interventions during the March 2020 market stress, but that such central bank support might not be so forthcoming in future crises.Pricing for liquidityThe credit rating agency said it expected widespread use of extraordinary liquidity-management tools would still be a theme in future market stresses, and that investors may therefore increasingly think about liquidity availability in probability terms.Noting that an academic study* had proposed pricing of liquidity as a real option, it said investors in such a paradigm would need to consider the ‘cost’ of the potential application of additional liquidity management measures.“[I]f the expected cash flows from a fund with a given market risk-return profile are potentially either not available or materially reduced by the application of additional liquidity-management techniques, then the fund will be less attractive to the end investor,” said Fitch.“Conversely, the current sustained period of low yields may make investors more willing to accept illiquidity risk in daily dealing funds, assuming these funds offer a yield premium.”All else being equal, Fitch said, appetite for non-daily dealing funds may increase if investors did ‘price’ illiquidity risk, as these funds may have higher probabilities of providing unimpaired liquidity on demand.At the same time, perception of an increase in illiquidity risk may hinder investor acceptance of non-daily dealing funds, the credit rating agency said.It said a move to non-daily dealing would face significant obstacles to implementation, including legal and commercial requirements, market infrastructure, and “perception of simplicity”.In Europe, retail and institutional funds are allowed to offer non-daily dealing, but daily dealing is the norm.*Ang, A. & Bollen, N. P. B., 2010, “Locked Up by a Lockup: Valuing Liquidity as a Real Option”, NBER Working Paper No. 15937Looking for IPE’s latest magazine? Read the digital edition here.last_img read more

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