Latest from IPE Magazine – Page 585
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Features
Again a year of mixed fortunes
The January markets rally has affected 2005’s opening figures for many categories of hedge fund. Data revealing strong foreign demand for US assets had calmed fears that the US will struggle to fund its ballooning trade deficit. Instead, investors have focused on dollar-positive factors. Going forward, it is the threat ...
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Features
Back with a bang
After years of near-neglect, asset allocation is now centre stage. The pensions world has (re-) discovered its importance for investment performance, liability matching and risk management. How quickly things can change. Only a few years back the view was widespread that there was not much value added to be gained ...
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Features
Funds take their own approach
Every pension fund is, or should be, aware of its liabilities – the benefits it owes each one of its members, now or in the future. But although taking steps to tailor the investment mix to cover these liabilities may seem to make sense, in practice pension funds take different ...
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Features
Consultants' perspectives
For most consultants in Europe today, there is little use beginning a conversation on asset allocation by talking about pure alpha. Liabilities are the ship and alpha merely the wind which takes it to the longed-for destination. Consultants are spending more time explaining the nature of that ship to the ...
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Features
Tying the pieces together
Is asset allocation objective? Why are rational, intelligent individuals able to produce two radically different asset allocations both seeking to fulfil a 20-year objective? The answer lies in the conflicts of interest that are embedded in the institutional fund management industry. The fundamental point is that what the risk stakeholders ...
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Features
The jury is still out
So in a continuation of the festive seasonal spirit, here are some quiz questions for pension fund trustees:LDI stands for ‘Liability driven investing’, which was the hot topic of 2004. What acronym best describes the preceding regime? Was it: PCMI (Pension Cost Minimization Investing)? IMDI (Investment Manager Driven Investing)? or ...
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Features
Reconciling paths to matching
There is now general agreement in the UK defined benefit (DB) pensions industry that we are moving towards much higher bond allocations and far lower equity allocations – the debate is largely on how long the transition will take. Furthermore, there is agreement on the major risks facing pension funds, ...
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Features
Equity duration - how viable?
[This article is more than 15 years old. For a more recent IPE article about equity duration please click here or see our equity asset class reports] Whether the concept ‘equity duration’ is useful has been a topic of debate for several decades and there is still no consensus on ...
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Features
Look hard before changing
Put in an executive nutshell, the revised IAS19 should have little, if any, noticeable effect upon the asset allocation in German pension plans. However, asset allocation is changing and will continue to change in response to a number of inter-related developments. Asset allocation is driven initially by market movements, namely ...
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Features
TAA is put on trial
Tactical asset allocation (TAA) is the talk of the town again. Once known as market timing (before that term became associated with more unsavoury practices), the basic tenet is to buy the market when it’s low, and sell high. No one doubts that this would add significant value if done ...
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Features
Continental investors hold their course
European institutional investors are taking strong measures to address solvency concerns and improve investment performance, as evidenced by their widespread adoption of new investment approaches and unprecedented levels of turnover of external asset managers. Despite these newly aggressive tactics, however, Greenwich research suggests that many institutions are hesitating in adopting ...
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Features
Will the directive affect asset allocation?
This year the directive on institutions for occupational retirement provision (IORP) must be implemented in all EU countries. How will it affect financial markets? The directive may affect asset allocation procedures and outcomes. It requires a cover ratio of 100% at all times (art 15 and 16), it sets quantitative ...
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Features
The point where risk becomes too risky
The investment landscape has changed dramatically over the past few years, forcing pension schemes to look at their long-term investment strategies in a different light. What may be surprising, however, is that performance does not have to play the sacrificial lamb in this changing environment. Fixed-income mandates and liability-matching solutions ...
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Features
The new role for equities in a liability driven world
One of the major changes in pension fund investing in the last twenty years has been the growth in use of equities and benchmarks to measure their performance. In an inflationary context, bonds were a poor match, and with pensions linked to growth in earnings, equities came into fashion as ...
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Features
The coming IAS19 shockwave
Every inhabitant of the Netherlands is entitled to a state old-age pension which provides a minimum income after retirement. The majority of enterprises in the Netherlands provide a defined benefit (DB) plan in addition to the minimum state income. Many branches of industry have multi-employer plans, participation in which is ...
