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Private assets still a priority for pension fund investors
Investor sentiment towards private markets continues to be positive, despite the continuing challenges of higher interest rates and ongoing macroeconomic uncertainty.
Resistance to Germany’s new buffer fund proposal
Last year, the manager of Germany’s pay-as-you-go first-pillar scheme, Deutsche Rentenversicherung, recorded income of €363bn, the largest share coming from contributions (€275.6bn), and €87.4bn in public subsidies.
Cambridge and Westminster: a tale of two pension schemes
The Houses of Parliament and Cambridge University are two venerable British institutions. But the differences in how they run their pension arrangements illustrate the contrast between the UK-style pooled liability-driven investment (LDI) and a more traditional form of pension investing, no longer as popular in the UK but still common elsewhere.
Europe escaped the Great Retirement Boom but watch out for the crunch
Continental Europe appears to have largely escaped the trend known in the US as the ‘Great Retirement Boom’, where an economically comfortable cohort of 50 to 64-year-olds has retreated from work in the post-COVID period.
Capital competition: where does it leave sustainability goals?
For pension funds and other similar large institutional pools of capital, there is significant pressure from politicians to invest in politically favoured domestic sectors – like renewables or high-growth sectors like venture capital.
Lessons learned from Berlusconi’s pension reforms
To some, the death of Silvio Berlusconi on 12 June this year, is the end of an era for Italian politics. Berlusconi was the longest-serving prime minister in the history of the republic and a highly controversial figure, at home and abroad. He can be described as the first modern European populist leader.
Notes from the Nordics: NBIM still learning on equal pay after winning employment case
Norway’s sovereign wealth fund has hailed the benefits of litigation abroad to drive its corporate governance agenda. Closer to home, victory in an Oslo employment case may have rung decidedly hollow for Norges Bank Investment Management (NBIM).
Harnessing the power of corporate governance
Pension funds and other institutional asset owners have significant influence when it comes to voting in companies’ annual general meetings (AGMs). The consequences of their voting decisions can have a profound impact on company share prices and long-term objectives, especially in the context of climate change.
Viewpoint: Fee transparency – it’s good for managers too, but they probably won’t believe it
Asset managers are still not properly able to represent the true and comparative value-for-money they provide
Carbon reduction: absolute goals, please
Dutch healthcare scheme PFZW last month reluctantly changed its 50% CO2 reduction target for 2030 from a relative to an absolute target, following in the footsteps of fellow Dutch pension funds ABP and PME. The fund cited the “negative sentiment” around relative targets as a reason for its change of heart.
German pensions sector backs cost rethink
Applause, which started mildly but ended robustly, suddenly reverberated in a packed Berlin conference room a few weeks ago. An audience of industry experts, pension managers, associations and trade unions clapped at the suggestion that Germany’s BaFin regulator should avoid repeating its exercise on cost reporting for IORPs, initiated by the European Insurance and Occupational Pensions Authority (EIOPA), and implemented in turn by BaFin. The exercise was a disappointment, and an excessive, unnecessary effort for the German pension industry.
Do not blame institutions for taking risks
Alecta, the SEK1.19trn (€105bn) institution that manages the Swedish ITP private-sector pension scheme, is being probed by Swedish regulators for the €1.9bn capital loss it experienced earlier this year, as the three US regional banks it invested in – Silicon Valley Bank, Signature Bank and First Republic Bank – collapsed. The institution reacted by firing its influential CEO Magnus Billing.
Concerns over plans for Australian super funds to provide advice
In what some see as a controversial move, Australia’s Labor government under prime minister Anthony Albanese has reformed the nation’s financial advice industry, opening the door for industry superannuation funds to offer financial advice to millions of members.
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ESG remains mired in politics in the US
“I am not going to use the word ESG because it’s been misused by the far left and the far right,” said BlackRock CEO Larry Fink in a conversation at the Aspen Ideas Festival in June.
Letter from US: Annuities move into the US market
Three of the largest players in the US pension industry are launching new products that offer annuities as a retirement savings distribution option. Millions of Americans will soon have access to pension-like investments in their 401(k) plans thanks to BlackRock, Fidelity Investments, and State Street Global Advisors. The other large player in the US market, Vanguard, will not take part in this new trend.
Letter from Australia: Retail funds lured by private markets
Australia’s retail funds are trying to navigate the unfamiliar terrain of private markets as they seek to lift their performance.
US: state enrolment systems gain traction
There are signs that the US state-facilitated retirement savings plans are starting to have a positive impact on both the creation and uptake of private pension plans.
Australia: volatility stirs valuations debate
As a disconnect in the valuation of listed and unlisted assets widens in today’s volatile markets, the torchlight is again being trained on Australia’s guardians of retirement savings.
Books: Financial crises and the failure of risk measures
This is a great book for anybody who would like to understand the causes and dynamics of financial crises. The author delivers deep insights into systemic financial risks for our economies, and why risk management tools and regulations fail when it matters most. The text is written in conversational style, full of anecdotes, wisdoms and polemics, which makes reading a pleasure even for the non-expert. To be recommended not only for risk managers but also for investment directors and trustees.
Books: How liquid are liquid assets?
Amin Rajan speaks to Pascal Blanqué about his latest book
Books – Demographics Unravelled: A broad and granular understanding of demographics
Amlan Roy’s contention in his new book Demographics Unravelled is that a wider and more holistic approach to demographics is necessary. An academic by background and a long-standing former head of global demographics and pensions research at Credit Suisse, Roy’s choice of focus in his book underlines his views.
Books: How a small island helped shape modern China’s world view
The Gate to China: A New History of the People’s Republic & Hong Kong by Michael Sheridan, HarperCollins, 2021
