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FeaturesReforms are needed to improve pensions in emerging markets
The emerging world is ageing the fastest. Despite having the advantage of a young population, emerging countries are expected to transition to older age groups within 25 years, a change that took over 150 years in some developed nations.
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FeaturesCyber catastrophe bonds make a debut as insurers offload risk
Cyber catastrophe bonds may be the new kid on the insurance-linked securities (ILS) block, but they have been talked about for years. The jury is out, though, as to whether they will follow the same trajectory as their natural cat bond peers. While some analysts believe they have the potential to go mainstream, others cite concerns over modelling and lack of diversification.
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FeaturesAnalysts push back on rate cuts
Federal Reserve chair Jerome Powell’s June press conference was, like most careful central bank-speak, open to interpretation. It was possibly slightly dovish with a hint of hawk. However, in the aftermath of the press conference, and following a few busy days of US economic data releases, many analysts have pushed back their forecasts for the number of interest rate cuts this year.
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FeaturesHow the EU's pay transparency directive affects pension sponsors
Pay transparency is looking set to be the employment hot topic of at least the next few years and reflects an ongoing global conversation around addressing equal pay. The latest figures in the EU put the gender pay gap at around 12.7% and the gender pension gap at in excess of 30%, with very little movement over the last few years. Greater transparency over pay is the route being adopted in a growing number of countries as the silver bullet to accelerate progress.
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FeaturesIPE Quest Expectations Indicator - July 2024
Both US presidential candidates are slowly losing popularity, while staying very close in the polls. Trump seems to have more trouble than Biden getting through to the undecided. Trump’s legal troubles may yet hinder his candidacy, in particular among independents.
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FeaturesCorporate transition plans need to spell out net-zero dependencies
Corporate climate transition plans are gaining momentum globally. Essentially, these are reports about how a company plans to achieve emission reduction targets, but the idea is that the company will have engaged in strategic thinking and planning to produce such a plan, rather than just churn out more disclosures.
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FeaturesMarket predicts US soft landing - June 2024
A combination of Federal Reserve chair Jerome Powell’s press conference and a slightly weaker-than-expected US April non-farm payrolls outcome succeeded in flipping the market back to a soft-landing narrative for the US economy. US Treasury bonds rallied sharply, taking other markets with them, while the yen weakened significantly against the dollar before recovering.
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FeaturesIPE Quest Expectations Indicator - June 2024
Trump and Biden are both losing to undecided voters, a group that is now unusually large and may be sensitive to Trump’s legal troubles. Biden’s approval rate is below his score in presidential polls, while Trump’s score is the same in presidential polls and those measuring voters’ opinion of him. In the UK, the Conservatives took another drubbing in the local elections.
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FeaturesT+1 settlement rules pose challenges for fund managers
A global move to compress settlement cycles – that is, the time between when a transaction is agreed and executed and when the transaction is completed and the securities and cash are exchanged – is underway. While the aim is to deliver lowered risk and cost savings, investors and market participants face challenges due to the increasingly interconnected nature of financial markets.
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FeaturesUK creates social factors template for pension investors
Environmental and governance risks receive much attention, but UK and other European institutional investors have focused less on social factors and their complexities.
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FeaturesUS economy continues to surprise
The resilience of the US economy continues to confound observers. The Federal Reserve’s 11 hikes in interest rates over the course of 2022 and 2023 were implemented to rein in economic strength and to stifle inflation. Scroll forward to the second quarter of 2024 and both inflation and economic activity are still higher than expected.
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FeaturesPrivate credit secondaries come of age
Since the secondaries market came into existence, private equity has been the dominant asset class, but the tide is turning. It is finally time for private equity’s more youthful counterpart, private credit, to receive more of our attention. The private credit secondaries market borrows various elements from its older sibling, including best practices and deal structures, and it is now demanding the spotlight as awareness of the asset class increases.
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FeaturesIPE Quest Expectations Indicator - May 2024
EU parliamentary elections are approaching fast. Current polls predict a shift to the right, with the current centrist parties remaining dominant and the extremist right overtaking the Eurosceptics. US President Donald Trump is still liable to be convicted in a criminal case, but his poll figures are rising.
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FeaturesInvestors are paying for hedge funds' reluctance to use hurdle rates
Although two years have now passed since the US Federal Reserve started rapidly hiking interest rates, the likelihood that your hedge fund manager will have a ‘hurdle rate’ – a minimum rate of return before performance fees kick in – has not changed. Only a quarter of hedge funds, by our count, have such a threshold in place and the practice does not yet show signs of becoming more widespread, even though the risk-free rate has now exceeded 4% for well over a year.
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FeaturesReluctance to drop interest rates disappoints the markets
US rates markets entered the year enthusiastically pricing in over 160 basis points of cuts through 2024, and have since had to push back hard on both the timing and magnitude of interest rate cuts now expected by year-end.
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FeaturesAn inflection point for India bonds
The impending inclusion of Indian government bonds (IGBs) in JP Morgan’s widely tracked $240bn (€220bn) Govern ment Bond Index-Emerging Markets (GBI-EM) index is seen as a milestone. However, while some asset managers hope it is the beginning of a more open investment culture, others are more circumspect.
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FeaturesIPE Quest Expectations Indicator - April 2024
The shadow of the US presidential elections is longer than normal because Trump is under several legal clouds. He could still get barred from participating but that seems unlikely. He does have a liquidity problem, a self-destructive streak, a mercurial character and no credible alternative waiting in the wings, though.
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FeaturesSecuritised credit keeps on shining
For a market with a difficult past, some could even say an image-problem, securitised credit has been performing remarkably well in recent years.
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FeaturesContrasting global economic growth fortunes
Economic growth patterns across the world paint a picture of contrasts, ranging from surprisingly robust in the US to soft and struggling in China, with the stagnant euro area narrowly avoiding a technical recession after posting zero GDP growth in the fourth quarter of 2023, following a 0.1% decline the previous quarter.
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FeaturesA bumper year for convertible bond issuance
The convertible bond market ended 2023 on a strong note with its main index – the Refinitiv Global Focus – returning 6% in the fourth quarter. The optimism has continued into 2024 on the back of reasonable valuations, historically low equity volatility and better opportunites.
