Latest from IPE Magazine – Page 399
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Interviews
Beware falling knives
The Mudrick Capital Management project was set in motion in 2008 to take advantage of a once-in-a-lifetime opportunity – “the largest supply of over-leveraged corporations ever seen” combined with the most severe recession since the 1930s “has kicked off a distressed cycle that will be unprecedented in terms of length and depth of supply”, its website declares.
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Special Report
Fiduciary/Delegation: Hedge fund beta: a cheap core portfolio?
If the trend is towards core-satellite hedge fund portfolios, what does that mean for resource budgeting? It is tempting to see this as a passive-active portfolio – why would an investor not wish to maximise her budget for the active part and minimise her budget for idiosyncratic risk, illiquidity risk and, of course, costs, in the passive part? This is the argument behind ‘hedge fund beta’ – investable indices, ETFs, super-diversified funds of funds and quantitative, hedge fund replicators.
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Features
Pension funds – future farmers
Pirkko Juntunen records the growing popularity of farmland investment in the developing world
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Features
ING OFE: Investing with your hands tied
Nina Röhrbein spoke with Grzegorz Chlopek (pictured), CIO and vice-president of ING PTE, Poland’s second biggest pension fund (with assets of €11.4bn) about the challenge of operating as a large institutional investor in a highly regulated market
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FeaturesLessons from Canada
Gail Moss assesses the challenges Canada is facing in the area of workplace pensions
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Opinion Pieces
Stephen Cooper, board member, International Accounting Standards Board
The issue of accounting for pensions has always been fraught for standard-setters who by necessity concentrate their efforts on the needs of investors who are, after all, generally considered to be the primary users of financial statements
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Features
Better late than never
On 29 April the IASB published its proposals to revamp IAS 19, employee benefits, which “aims to make fundamental improvements to the recognition, presentation and disclosure of defined benefit plans by mid-2011. These improvements will make it easier for users of financial statements to understand how defined benefit (DB) plans affect a company’s financial position, financial performance and cash flows.”
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Features
BP oil spill fuels investor concern
The Gulf of Mexico oil spill is threatening to affect more than just the environment. Investors in BP, including pension funds, have been warned they could suffer in terms of both income and regulation if BP’s share price continues to fall and the dividend payment suspension continues beyond Q3 2010.
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Country Report
Italy: Fondo Cometa: Activist investor
Fondo Cometa, Italy’s largest pension fund with €5.2bn in assets, is discussing terms to implement its new activist investment strategy for domestic equities. Carlo Svaluto Moreolo reports
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Country Report
Italy: Restrictions, restrictions
When it comes to asset allocation, Italian pension funds remain more restricted than their counterparts in the west of Europe due to the limits of legislation, writes Nina Röhrbein. Italian funds also often have their hands tied by employees who make individual investment choices from a pool of guaranteed and balanced lines the funds are obliged to offer – that is, if they even join a pension fund
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Country Report
Italy: Political machinations
As sovereign debt levels rise, and the cost of borrowing increases, Maria Teresa Cometto reports on the effects of the pension sector on Italian public finances and the political willingness to make the necessary changes
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Country ReportItaly: Caution over reform
The proposal for a €1bn government fund investing in SMEs has re-ignited the debate on pension fund investment limits. Carlo Svaluto Moreolo finds pension fund representatives cautious, but ready to argue the case for reform
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Opinion Pieces
Cash Balance
Coca-Cola is the latest big US company to convert its final salary pension plan to cash balance, thereby becoming part of a trend highlighted in a recent survey of the Fortune 100 companies by professional services firm Towers Watson. Of these companies, the number replacing their traditional defined benefit (DB) plans with account-based retirement plans for new employees continues to increase.
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Opinion Pieces
Derivatives
Proposals for legislative measures on uncovered, or naked, short selling of securities and the trade in derivatives – two crucial areas in the EU’s wholesale upgrade of financial legislation post-financial crisis – are open to response from interested parties until 10 July.
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Country ReportSwitzerland: Funding questions
Barbara Ottawa assesses the decision of the Swiss authorities not to force public funds to move to full funding over the coming decades
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Country ReportSwitzerland: Investment decisions in 2009
Pension funds’ investment behaviour has come under heavy criticism from all sides due to the financial crisis, writes Peter Baenziger. Appropriate asset allocation was a major challenge for Swiss pension institutions in 2009
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Special ReportPortfolio Construction: Three Blind Mice
Accounting for fat tails of individual instruments is not the same as managing those tails at portfolio level. Svetlozar (Zari) Rachev and Georgi Mitov explore how advanced copulas might address the problem of fat tails, dependence models and portfolio risk
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Features
Unipension: Risk, adjusted
Martin Steward spoke with Niels Erik Petersen (pictured) and Søren Bang Andersen of Unipension, the consolidated administration service for Denmark’s pension funds for architects, MAs, MScs and PhDs, agricultural academics and veterinary surgeons
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Opinion Pieces
Pension contracts and regulation
Robert C Merton and Jan Snippe argue that Dutch pension legislation should be inspired by fresh and logical thinking
