Asset Allocation – Page 170
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Features
Changing managers can destroy value
The hiring and firing of investment managers by institutional investors in the UK and US can be a value-destroying activity, according to a report by global investment consultant Watson Wyatt. The paper states there is “room for improvement” on the part of institutional investors when it comes to decisions about ...
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A changing marketplace
While it may be natural for European institutional investors to see European equities as a core asset class, what is not so clear is what should be included within that definition, and on what basis managers should be selected. The US market has a culture of much more specialisation of ...
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The bottom line of catastrophe
Politicians will tell you that everything changed on 11 September 2001. But then again, so will insurance companies. For the first time, hedging a bet against a major catastrophe, in the form of a terrorist attack, does not seem like a good idea. Unsurprisingly, insurance companies are still reluctant to ...
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The next big thing?
They could be the ‘new big thing’ in the US savings industry. And like the individual retirement accounts, the new Health Savings Accounts (HSAs) imply putting aside tax free money and investing it in stocks and bonds. Although the sums are smaller, the potential is not: there could be $75bn ...
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Applying an objective view
One of the reasons that portable alpha has yet to be adopted by pension funds may be that it does not appear to meet their needs. Although it is conceptually attractive, its seems to have no practical application. Ronald Ryan, founder and CEO of US-based Ryan Asset Liability Management believes ...
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Alchemy to the rescue?
Portable alpha offers pension funds the investment equivalent of alchemy – transmuting non-performing into performing assets. Using swaps or futures contracts - a process known as equitisation - funds can transfer or ‘port’ the alpha generated by one asset class to other asset classes in their portfolio. In this way, ...
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The challenges lying ahead
Hugo Clemeur of the Association of Belgian Pension Funds, Brussels Apart from the preoccupations caused generally by the demographic evolution compounded with slow economic growth, the second pillar pensions sector in Belgium faces a number of challenges of which I would mention only three, although many more could be mentioned ...
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How pension funds are addressing biometric risk
Pension funds are dealing with biometric risks in a number of different ways. A few of them explain their particular approaches . ABP, Netherlands “We fund our benefits 100% by ourselves. We are large enough to bear the risks,” says Alexander Paulis, chief actuary at the largest pension fund ...
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Active route away from the crowd
The London Pensions Fund Authority, (LPFA), is one of the UK’s leading public sector pension schemes, with 73,000 members and £3.2bn (€4.7bn) in pension fund assets. It was set up in 1989 as a stand-alone public body to take over the running of the pension fund of the Greater London ...
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Activity across a broad front
In two years’ time the status of Belgium’s self-employed as the poor relations of state pension provision should be a thing of the past. This is one of a number of challenging projects that have been exercising the powers that be in Belgium. The idea was that the self employed ...
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Start of the pooling plunge?
Several years of work have gone into Unilever’s giant asset pooling vehicle. After a long period of decision-making, logistics and negotiation, the €5bn multi-fund vehicle, named Univest, was finally launched at the end of last year. The multinational consumer products group set up Univest to provide a central investment pool ...
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Why pension pooling is a reality
As a panelist at a recent IPE conference, I was asked: “For all the talk about cross-border pension pooling, is anyone actually doing it?” A fair question, because so much pooling-related activity in recent years has gone on behind the scenes. The design and implementation of a first generation of ...
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A question of mindset?
As a junior actuarial student in 1991, I recall watching a role-play of an actuary and a lawyer in court. The lawyer was cross-examining the actuary, focusing on the fact that the actuary was advising both the trustees and the employer, without apparently drawing any distinction between the two. Fifteen ...
