All Focus Group articles – Page 4
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Features
Boutique appeal
Two-thirds of respondents to this month’s Off The Record survey stated that their fund did not have any restrictions on allocating to boutique asset managers.
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Features
‘Keep it simple’
To mark our fifteenth anniversary, we asked 15 European pension funds about the past, present and future of pensions. Although eight respondents to this month’s Off The Record survey felt the trend would abate, all believed that increases in pension members’ longevity would continue in the 2010s and 2020s. Only two felt their fund was badly prepared to deal with this. A Dutch fund commented: “We already calculate a future increasing life expectancy, and I think it will be less than our calculations.”
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Features
Consultants could improve
Almost half of the respondents to this month’s Off The Record survey used investment consultants on a retainer basis, although just slightly fewer used them on an occasional or project basis. Only two respondents never use consultants.
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Features
Fear of euro-zone break-up takes hold
Almost half of respondents to this month’s Off The Record survey felt that the biggest credible threat to the global economy or financial markets in 2012 was the euro-zone break-up beginning to look inevitable. “The risk of a break-up has consequences impossible to oversee and hedge. It is not unlikely anymore,” said a Dutch fund.
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Features
Hedging your bets
Just over 70% of respondents to this month’s Off The Record quick poll stated that their pension fund invested in hedge funds.
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Features
Currency affairs
Three-quarters of respondents to this month’s Off The Record survey used currency management, 91.5% of these doing so for currency exposure hedging and 8.5% for returns.
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Features
Fear, extremes and the euro
August was not all bad: 79.5% of respondents to the Off The Record survey stated that core government bonds had performed well; gold/precious metals (24% of respondents), currency exposures (20.5%) and global macro funds or other hedge funds (17%) also turned up trumps. But of course, that tells its own story: August was all about fear, extremes – and the euro.
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Features
Funds unfazed by ban
Almost 70% of respondents to this month’s Off The Record survey told us they had not decided to suspend securities lending in light of recent market turbulence and the short-selling bans imposed by four European countries. However, a Danish fund that had decided to suspend securities lending stated that they had taken this action as “the earnings are too little compared with the risks”.
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Features
Risk remains a top issue
Over three-quarters of respondents to this month’s Off The Record survey stated that risk management had been raised as an agenda item on their board in the past 12 months. This was slightly lower than reported at the same time last year (85%), but still clearly shows its importance as an issue for pension funds.
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Features
In pursuit of a good mix
Just over 88% of this month’s respondents said they invested with managers who use quantitative tools – although we should acknowledge some self-selection bias. Of these, 29% have a specialist quant manager section in their portfolio (and a further 12% only have them in their hedge funds) while 35% have quants working across their entire portfolio.
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Features
Good time for private equity
Just over 60% of respondents to this month’s Off The Record survey said their fund invested in private equity. One respondent said they were about to start investing, while the remaining respondents do not invest.
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Features
Signs are up for ESG
More than 70% of respondents to this month’s Off The Record survey stated their fund had an ESG policy. A Dutch fund commented: “Our participants put a lot of attention on sustainability. We have a long-term view and believe sustainability is an important theme, [and] have included it in our ...
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Features
Consultants have their uses
Just under half (45.5%) of respondents to this month’s Off The Record survey use investment consultancy services on a retainer basis. Some 32% use them on an occasional or project basis, 18% use them in other ways, such as a combination of retainer and project basis, and 4.5% never use ...
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Features
Get the message across
Respondents to this month’s Off The Record survey were evenly split on the most important form of communication with their members or participants. Some 30% believed postal correspondence to be most important, while the same number favoured their fund’s website. When asked this question a year ago, a majority of 38% stated that postal correspondence was most important, compared with 26.5% for website communication.
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Features
The year ahead
This month’s Off the Record survey asked European pension funds for their outlook for 2011, and received varying views and concerns.
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Features
Hedge in the middle
Just over half (52%) of the respondents to this month’s Off The Record survey stated that their pension fund currently invests in hedge funds. Some 66.5% do so via fund of funds, while 58.5% do so directly.
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Features
Price risk protection
This month’s Off The Record survey focused on inflation. The vast majority of respondents (66%) believed that low inflation of less than 3% was likely in the next 12-18 months. A Dutch fund commented: “Currently, [we] do not see inflationary pressures to justify high inflation expectations. Furthermore, the European Central Bank’s monetary policy will be tilted to be more restrictive if and when an inflationary environment is anticipated.” A Danish fund added: “Economies are recovering slowly and at present only working at 70-75% of total production capacity”.
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Features
Unrewarded risk
Three-quarters of respondents to this month’s Off The Record poll use currency management. Of these, 83.4% did so for currency exposure hedging, 8.3% for returns and 8.3% for both reasons.
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Features
Thumbs up for central control
This month’s Off The Record poll focused on derivatives, operational risk and custody. Some 61% of respondents felt it was positive that measures in Brussels and the US would force pension funds to clear derivatives using a central counterparty. “Central banks need to be able to control markets in extremis, as we saw two years ago. The only beneficiaries of off-exchange derivatives are investment banks. End users of derivatives should be happy to see them go to central clearers,” said a UK fund. Another UK fund added: “Being transparent will be important”.
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Features
Funds talk tactics
In this month’s Off The Record survey, 56% of the 34 pension fund respondents stated that they implement tactical or some other form of intermediate/interim asset allocation. A Danish fund described their process as such: “We review the allocation periodically, at least every six months, to enhance potential returns by exploiting perceived market misalignments, utilise momentum, or take early profits”. A UK fund added: “[We employ] in-house tactical asset allocation relative to the benchmark set by the investment committee, primarily using derivative overlays with clear limits [plus or minus] per asset class.”
