All Briefing articles – Page 4
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Features‘Painful’ private equity fees are hard to avoid
The Netherlands’ €551bn ($576bn) civil service scheme ABP paid a record €2.8bn in performance fees to private equity managers in 2021, prompting the fund’s president Harmen van Wijnen to announce an external investigation to assess ABP’s rising asset management costs. The €277.5bn healthcare scheme PFZW paid €1.26bn in performance fees to private equity last year, accounting for two thirds of total asset management costs.
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FeaturesCustodians will be key as investors move into digital assets
Digital assets may seem to be the latest investment trend, but institutions are taking their time in embracing them. Moving interest to the next level will require not only greater regulation but also a solid network of custodians to provide the required security and protection.
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FeaturesAsset owners need to find the best stock pickers
For pension funds, an asset manager search is a high-stakes exercise. Get it wrong and the scheme could be saddled with an underperforming manager for an extended period of time, dragging down returns and potentially impacting member outcomes.
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FeaturesYen’s swift dive surprises market
For several decades, the Japanese yen has not been in the limelight too often. However, earlier this year it became headline news as the currency began to depreciate rapidly against the US dollar. Although investors were not overly surprised that the yen would weaken, the speed of its decline was certainly startling. Over the course of about 15 months, between the start of 2021 to early April 2022, the yen has lost about 25% of its value against the dollar, with nearly half the move occurring in that final month.
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FeaturesUK venture: new kids on the block
Google the venture firm 2150 and you won’t find an investment strategy but a manifesto.
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FeaturesEmissions reporting: taking stock of indirect emissions in Scope 3
Disclosure proposals by the US Securities and Exchange Commission (SEC) in March could guide the regulatory searchlight beyond companies’ direct and indirect C02 emissions (Scope 1 and 2) and towards upstream and downstream (Scope 3) emissions.
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FeaturesInvestors sceptical on Tokyo equity market reforms
In April, the Tokyo Stock Exchange (TSE) implemented its biggest overhaul in over 60 years in an attempt to attract foreign investors. However, many industry experts see the move as largely symbolic and believe more needs to be done to create a roster of high-quality companies with strong corporate governance practices.
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Features
The case for an EU consolidated tape
Liquidity. Equality. Fragility. With apologies to the French Republic, these three words almost act as a lodestone in discussions about a consolidated tape (CT) for EU securities. The need for such a tape is becoming more apparent than ever, but it could still be three years or so before it become a reality, according to Susan Yavari, regulatory policy adviser at the European Fund and Asset Management Association (EFAMA) and the author of a detailed official position paper on the subject published in mid-February.
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FeaturesUkraine & Russia: Asset allocation and investing in a time of war
It is a well-known fact that geopolitical events have no lasting impact on financial markets. However, Russian president Vladimir Putin’s decision to wage war on Ukraine has forced institutional investors to reassess their strategies. While stock market indices tend to recover fairly soon after the initial shock of a geopolitical event, the conflict between Russia and Ukraine has potentially wide-ranging consequences beyond a sudden spike in volatility.
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FeaturesBriefing: High yield off to a rough start to the year
High yield did not have a good start to the year. Rising inflation and a more hawkish central bank tone in the US and UK triggered panic selling in January. However, as the dust settles and bad news is priced in, the asset class looks more appealing than other fixed-income segments. Easy pickings may be gone, though, and opportunities will have to be selected carefully.
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FeaturesBriefing: Now is not the time to give up on emerging markets
“Just when I thought I was out, they pull me back in!” This classic Al Pacino line has applied to many emerging market investors in recent years. Like Michael Corleone, drawn by the potential offered by bold business opportunities, they have accepted to take higher levels of risks in a quest to obtain better results. However, similarly to the family at the heart of The Godfather saga, the outcome of such bets has often caused a lot of pain.
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Features
Briefing – ESG data: material innovations
As environmental, social and governance (ESG) considerations have risen in importance among investors in recent years, so the subject of data quality has become an essential issue.
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FeaturesBriefing: Unfinished business on IORP II
Almost three years on from the effective date for the implementation of IORP II, the directive is still being worked on, amended and adapted by Europe’s regulators. What will 2022 bring for the regulation of the EU’s pension funds?
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FeaturesBriefing - Private equity: the case for transparency
A recent paper published by US-based academic Ashby Monk and others arguably says it all in its title – *An Economic Case for Transparency in Private Equity*.
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FeaturesBriefing: EU strengthens rules on green disclosure
Investment firms need to familiarise themselves with a range of new environmental issues to prepare for a European Union law aimed at consistent environmental disclosures that also support investment decisions on environmental sustainability.
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FeaturesBriefing - CLOs: a post-pandemic resurgence
Exactly a decade after the collapse of Lehman Brothers, the collateralised loan obligation (CLO) market was breaking records. In 2018, nearly $130bn (€113.6bn) worth of CLO paper was issued in the US and €45bn in Europe, a sign that the crisis of confidence caused by the Great Financial Crisis was over.
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FeaturesBriefing: PE fees under scrutiny
The balance of power between private equity firms and investors typically swings with the fundraising cycles.
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FeaturesBriefing: UK fiduciary management
In 2019, the UK government introduced reforms to the investment consultancy and fiduciary management sector. That followed a review by the Competition and Markets Authority (CMA) that identified competition problems.
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FeaturesBriefing: Dutch fiduciary management
A new pensions agreement between the Dutch cabinet and social partners last year requires nearly all Dutch pension funds to switch to a new defined contribution (DC) contract. It includes a lifecycle system and personal pension pots. The idea is to combine collective and individual components in one pension agreement.
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FeaturesBriefing: Insurance-linked securities
Hurricane Ida in late August and early September caused great damage to the southern coast of the US. Fortunately, for people in this area, insurance policies often cover destructions to their properties. Since covering such damage can lead to severe losses for insurance companies, they are keen to reinsure themselves.
