The organisation that runs the Principles for Responsible Investment (PRI) Initiative is planning to appoint an external, independent adviser to help with the process of reviewing the PRI’s governance.The adviser will work alongside the PRI Advisory Council’s governance committee and the new Council chair in carrying out the review.The intention to carry out a formal review of the PRI’s governance structure and processes was agreed by the Council and Board at their joint meeting in Cape Town on 30 September 2013.This was announced at the PRI’s signatory meeting the next day, and in a letter to all signatories in late October. However, the decision to appoint an independent adviser follows the exit last December of eight Danish signatories from the PRI organisation over governance concerns.The decision was made at a joint meeting of the PRI Advisory Council and PRI Association Board.The PRI Advisory Council’s governance committee – chaired by Priya Mathur, board member of the California Public Employees’ Retirement System (CalPERS) – will work with the Advisory Council to finalise the scope for the governance review and request for tender by the end of January.PRI signatories will have an opportunity to provide input into scope.The review process will be overseen by the governance committee until a new Council chair is appointed, expected by the end of March.Fiona Reynolds, managing director at PRI, said improving and adapting the PRI’s governance processes to ensure it meets the needs of signatories remains a priority for the organisation.“Strong and effective governance is the foundation upon which all of the PRI’s work and success ultimately rests,” she said.“The PRI recognises that, as it calls on investors globally to drive improvements in the governance of companies and markets, it must set an example and match the levels of accountability and transparency it expects of its signatories.”She added: “The PRI is committed to ensuring this review is carried out to the highest standards of independence, impartiality, transparency and accountability, and that its finding and recommendations – along with any subsequent changes to PRI governance as a result of the review – are clear, practical, understood and supported by signatories via our decision-making processes.”The PRI will update signatories on the status of the governance review in April, following the next joint meeting of the Advisory Council and Board in London.Updates on the progress of the review will be published on the governance page of the PRI website as they become available.
Belgian defined benefit (DB) pension fund face potential closure as the country continues with its harmonisation of employment rights between blue and white-collar workers.In 2011, the Belgian Constitutional Court deemed it illegal to offer different employment rights to blue and white-collar employees, in a leveling up of rights for the trade sector.As new rules came into force at the start of 2014, pension arrangements were shelved as negotiations between employer and employee representatives continued.In the coming weeks, the social partners are expected to publish their agreement, with the government swiftly accepting the proposals as law. However, historical discrimination between Belgian workers generally resulted in occupational-DB arrangements for white-collar workers, and blue-collar either given no coverage or defined contribution (DC) schemes.The social partners are to agree a transition period for the harmonisation of pensions rights, with employers potentially given 10 years to comply.Elke Duden, counsel at law firm Linklaters in Belgium, said that, given the chance of blue-collar workers claiming for DB rights, and the unpalatable cost for employers, many DB schemes could close to new members.Due to the cost of pensions reform, she said, employers in Belgium have become increasingly concerned with competitiveness against other European firms, thus moving for cheaper options.While plans are yet to be published, the likelihood is that employers will be given 10 years to transition to equal blue and white-collar offerings.“It is difficult to go into details, as we do not yet know what is expected, and it’s quite grey on the extent of the impact,” Duden said.However, current Belgian legislation means employers cannot force current members of DB schemes to move into a lesser scheme.With this being the case, Duden said she expected DB to duly shut to new members entirely, and that all new enrolment would move into an equal-footed DC scheme.“What is likely is, employers will terminate all current pension schemes and put in pace new schemes for new hires that are equal for both blue and white-collar workers,” Duden said.The other option, she said, would be for employers to provide the employee representatives with a plan that would see the leveling up of blue-collar benefits to match white-collar workers.However, given the costs associated with this, it is far more likely for legacy benefits to be shut off entirely.With this, Duden said, in effect, real harmonisation will not take place for around 40 years, as current members will remain in DB schemes, accruing benefits.The legacy of blue-collar workers not receiving occupational pension benefits has been a sore point among trade unions for some time.Earlier this year, the country celebrated its second-pillar system becoming larger than its third, as industry-wide pension schemes took hold.In 2004, the Belgian government legislated for the formation of industry-wide schemes which created compulsory membership for uncovered workers, many of which were employed in blue-collar industries.
Aon Hewitt, ATP, KirsteinAon Hewitt – Werner Hertzog has left his position as managing director at Aon Hewitt Switzerland. No replacement has yet been named. Hertzog took on the role in the summer of 2011 after he resigned as head of the largest Swiss pension fund Publica, where Dieter Stohler took over. Separately, Koray Yesildag has joined the global asset allocation team in Aon Hewitt’s London office. He joins from GAM, where he was an economist and member of the asset allocation team. Before then, he worked at Dresdner Kleinwort Wasserstein.ATP – Four new members are joining ATP’s supervisory board. Jan Walter Andersen, bank director at Arbejdernes Landsbank, has been appointed to the ATP supervisory board by the Danish Confederation of Trade Unions (LO), replacing economist Ingerlise Buck. Anne Jæger, chief risk and compliance officer at Danish insurance company Codan, has been appointed by the Finance Ministry, replacing Niels Gotfredsen. Finn Larsen, the chairman of the Danish Confederation of Professional Associations (AC), has been appointed by AC and replaces former AC president Erik Jylling. Anne Broeng, whose move to the ATP board has already been reported by IPE, has been appointed by the Confederation of Danish Employers (DA) and is taking a vacant position on the board. The ATP supervisory board consists of six employer representatives, six labour representatives and an independent chairman.Kirstein – Bodil Nyboe Andersen, former director of the Danish National Bank, has been appointed chairman at the Danish consultancy, effective 1 May. Nyboe Andersen continues the work of former permanent secretary of state for Foreign Affairs, ambassador Eigil Jørgensen, who will remain on the board of directors. She has also served as director at Andelsbanken and executive vice-president at Unibank.
Specialist Chinese manager China Post Global has launched a smart beta exchange-traded fund (ETF) focused on the burgeoning A-shares market.The fund follows a “minimum variance” index, created in partnership with index provider Stoxx, that selects securities based on volatility and trading volume.Danny Dolan, managing director at China Post Global in the UK, said appetite for Chinese exposure was “being held back by concerns about higher volatility”.“The minimum variance approach works to address these volatility concerns while maintaining sufficient liquidity, aiming to give investors access to higher risk-adjusted returns in the medium and long term,” he said. The Market Access Stoxx China A Minimum Variance Index UCITS ETF is listed on UK, Swiss and German exchanges, as well as on the China Europe International Exchange in Frankfurt.It is registered for sale in the UK, Austria, Germany, Italy, Luxembourg, the Netherlands and Switzerland.LGIM expands multi-asset ESG rangeLegal & General Investment Management (LGIM) has launched a multi-asset fund designed specifically for UK defined contribution (DC) schemes.The Future World Multi-Asset Fund forms part of a range of institutional funds that includes the Future World Fund launched in 2016 in partnership with the HSBC Bank UK Pension Scheme. It also includes the Legal & General Future World Gender in Leadership UK Index Fund, launched last month.The new strategy consists predominantly of ESG indices, a number of which have been launched this month in partnership with index provider Solactive. These indices offer exposure to equity markets in various regions of the developed world, as well as euro-, dollar- and sterling-denominated investment grade corporate bonds.Emma Douglas, head of DC at LGIM, said: “We’ve seen a marked change in attitudes from savers who want to use their pension to help create the future they want to retire in and research has shown that 85% of millennials would like their future investments to reflect their social and environmental values.”Timo Pfeiffer, head of research at Solactive, added: “With increasing focus from investors and regulators alike, sustainability is becoming the rule, rather than the exception.”
Christoph SchlienkampSource: Bankhaus LampeHowever, German investment professionals organisation DVFA countered that removing quarterly reports could bring more volatility to equity markets.Christoph Schlienkamp, board member of DVFA and head of its corporate analysis committee, said: “It is the times between the reports in which investors become shaky. Times without facts are times for rumours.”The notion that quarterly reporting encouraged short-term thinking was outdated, Schlienkamp argued. In a statement issued by the DVFA, Schlienkamp, an analyst at Bankhaus Lampe, a German private bank, said investors needed the most up-to-date figures on cash flows and income in order to understand significant changes affecting companies.Schlienkamp also cited a study by researchers from the Kelley School of Business at Indiana University and the London Business School, published in January.Authors Salman Arif and Emmanuel De George studied the reports and stock price performance of more than 9,400 companies from 29 countries between 2001 and 2012. They found that a reduced frequency of reporting “may lead investors to overreact to alternative sources of information for non-reporting periods due to the absence of own-firm earnings announcements”.Arif and De George said their research suggested that “starving investors of interim financial reporting” could impair investors’ ability to assess companies.A separate study, published last year by the CFA Institute, looked into the effects of the introduction of mandatory quarterly reporting in Europe in 2007. This requirement was dropped in 2014.It found that, in the UK after 2007, companies moved towards “more qualitative than quantitative” quarterly reports and “gave managerial guidance about future company earnings or sales”.The researchers – Robert Pozen, Suresh Nallareddy, and Shiva Rajgopal – also reported an increase in analyst coverage and an improvement in their earnings forecasts.By 2015, a year after mandatory quarterly reporting was abandoned, the CFA found that “less than 10%” of companies had stopped issuing the reports. There was “a general decline in the analyst coverage” of those that scrapped the reports, the researchers said.While the authors supported keeping quarterly reports, they advocated a “streamlined” system for them based on the UK’s rules for interim management statements.SEC ‘considering options’For its part, the SEC has pledged to “continue to study public company reporting requirements”.SEC chairman Jay Clayton said in a statement responding to Trump’s tweet: “The president has highlighted a key consideration for American companies and, importantly, American investors and their families – encouraging long-term investment in our country. Many investors and market participants share this perspective on the importance of long-term investing.“Recently, the SEC has implemented – and continues to consider – a variety of regulatory changes that encourage long-term capital formation while preserving and, in many instances, enhancing key investor protections.“In addition, the SEC’s Division of Corporation Finance continues to study public company reporting requirements, including the frequency of reporting. As always, the SEC welcomes input from companies, investors, and other market participants as our staff considers these important matters.”Further readingDoes Financial Reporting Frequency Affect Investors’ Reliance on Alternative Sources of Information? Evidence from Earnings Information Spillovers Around the World (Arif and De George; Kelley School of Business Research Paper, 2018)Impact of Reporting Frequency on UK Public Companies (Pozen, Nallareddy and Rajgopal; CFA Institute Research Foundation, 2017) European companies are only required to report financial data every six months, although many larger firms also give quarterly updates in line with US reporting.In a statement to the CNBC television channel, Nooyi said: “Most [market participants] agree that a short-term-only view can inhibit long-term strategy, and thus long-term investment and value creation. Indra Nooyi speaks at the World Economic Forum in Davos in 2010Credit: Michael Wuertenberg “My comments were made in that broader context and included a suggestion to explore the harmonisation of the European system and the US system of financial reporting.“In the end, all companies have to balance short-term and long-term performance.”UK asset management trade body the Investment Association said the proposed move to six-month reporting was a “significant and positive intervention” from Trump.Chief executive Chris Cummings agreed with Nooyi’s sentiment that the need for firms to publish quarterly results often forced a focus on “artificial short-term timeframes” and was a distraction from longer-term objectives.“A move away from quarterly reporting would allow companies to lift their heads up, move away from constantly focusing on short-term market expectations, and instead manage their businesses with greater focus on how to build sustainable, long-term success and invest in a way that boosts productivity,” Cummings added.“Times without facts are times for rumours”Christoph Schlienkamp, DVFANasdaq, one of the US’s leading stock exchanges, published a report last year in which it also advocated semiannual reporting. It argued that such a move would encourage long-termism while also reducing costs. Companies could update “key metrics” between reporting periods “using the tools readily available to them”.‘Nein, Herr Trump’ Investors are split as to the benefits of scrapping quarterly reporting, as suggested by US president Donald Trump earlier this month.Trump tweeted on 17 August that a “top business leader” had suggested changing US equity market rules away from mandatory quarterly results to six-month reporting, and said he had asked the US regulator to “study” the idea. He later credited outgoing PepsiCo CEO Indra Nooyi, a member of an influential “business roundtable” group, with the suggestion.US rules require all companies listed on its stock exchanges to report quarterly financial data to the Securities and Exchange Commission (SEC).
A consortium of five Italian pension funds has launched a search for a private equity manager for a joint portfolio worth €216m.The consortium, named ‘Progetto Iride’ (Project Iris), was set up last year with the goal of building a portfolio of alternative investments.The five investors in the consortium are industry-wide defined contribution (DC) pension funds Foncer, Fondenergia, Fondo Gomma Plastica, Pegaso and Previmoda. As of December last year, the funds had a combined €6.1bn of assets under management.The consortium has set up a website for the project, according to which the collaboration “stems from a deep analysis of the alternative investment market, as well as the conclusion that these investments are sustainable over the medium term given the funds’ positive contribution flows”. Previmoda €39m Foncer €28m Fondo Gomma Plastica €46m Fondenergia€72m “These investments are also expected to improve our yield expectations and provide a considerable contribution to performance,” the pension funds said. “In this phase of low yields, the goal of these investments is to achieve further diversification of our portfolios and sources of return, in order to strengthen the return objectives of our members”.The consortium is looking for managers investing primarily in Europe. A significant portion of the investments are expected to be in Italian companies. Managers will focus mainly on buyout and growth strategies.The consortium has earmarked €216m, split between the five funds:Source: Progetto IrideFund Allocation Pegaso €30m Managers have until 3rd May 2019 to present their bid. Further information, including the tender announcement, can be found on the project’s website.Last year IPE reported that a number of Italian industry-wide DC funds had formed the partnership with the objective of pooling resources to target investments in illiquid asset classes. Assofondipensione, the Italian association of industry-wide pension funds, known as ‘fondi negoziali’, spearheaded the initiative.At the time Giovanni Maggi, chairman of Assofondipensione, told IPE: “The association has been working on a system-wide initiative for nearly two years.“The objective is pooling assets, in order to present a stronger business case to asset managers and enhance the governance of investments. We also want to send a signal that funds can work together and play to their strengths in a complicated phase for financial markets.”Calls for collaboration between fondi negoziali have been made repeatedly in Italy in recent years by authoritative voices in the industry, including pension fund regulator Covip. “This is the first initiative of its kind and could constitute a model for future partnerships where funds can work together to create strong synergies,” Maggi said.
“We will be looking for a global approach, with compelling small cap investment capability and strong evidence of ESG integration,” he added. “Both fundamental and quantitative managers will be considered. We will not consider regionally focused mandates.”The pool indicated it was comfortable allocating up to 30% of the portfolio to emerging markets or micro-caps, but the benchmark would be the MSCI Small Cap World index.The call for expressions of interest is the second step towards Brunel’s latest sub-fund. It launched the pre-search and registration process for the global small cap mandates in July.The pool has said it intended to launch around 25 portfolios, spread across five different buckets, to allow its client LGPS funds to implement their investment strategies. The global small cap equities portfolio will be one of six active equity funds.Brunel has already launched an active UK equities fund and a low volatility portfolio. A call for expressions of interest to manage high alpha global equities strategies went out earlier this year.Brunel’s clients have some £30bn in assets under management between them. Brunel Pension Partnership is progressing with preparations for a global small cap equity sub-fund, having today launched a call for expressions of interest from “exceptional” managers.The asset pool for 10 English local government pension schemes (LGPS) said the portfolio would have a size of around £365m (€402m), to be allocated between two to three managers. Formal launch is scheduled for the second quarter of next year.David Cox, head of listed markets at Brunel, said that, in keeping with the asset pool’s overall outlook, “individual mandates in the sub-fund will be long-term only”.
Two of Denmark’s largest commercial pension funds, PFA and Danica Pension, have reported steep investment losses for this year’s first quarter of 10.5% and 15.4% respectively, blaming the COVID-19 outbreak in their interim results statements.For mutual provider PFA, the 10.5% figure is the total return related to its PFA Plus market-rate product, while the number given by Danske Bank’s pensions subsidiary Danica Pension is the return on customer funds in its Danica Balance Mix product, for those with a medium risk profile and 20 years to retirement.At PFA, group CIO Kasper Ahrndt Lorenzen said: “From mid-February, things began to turn, as the consequences of the COVID-19 pandemic began to make their mark on the financial markets.“When the virus appeared outside China in earnest, and Denmark, along with many other countries, shut down our society, the big falls quickly followed,” he added. PFA said its riskier assets such as listed equities had been hit the hardest, with that asset class ending the quarter with a 17.7% loss, while unlisted investments had remained more stable including the property portfolio, which was down 1.6%. Overall, alternatives suffered a 10.8% loss.“At these times, the goal is to minimise losses, and that is where our many investments in the unlisted area, e.g. in properties and offshore wind farms, show their strength, as they are more robust, and largely guarantee a fixed, regular income, even though financial markets are declining,” said Ahrndt Lorenzen.PFA said the negative returns seen in this year’s first quarter translated to losses of between 4.1% and 15.1% for its customers holding market-rate pension products, depending on their selected risk profiles.In absolute figures reported by the pensions firms in their interim reports, PFA said its total return on investment between January and March was minus DKK33bn (€4.42bn), compared with the DKK57.6bn it garnered for the whole of 2019.Danica Pension’s before-tax first quarter profit was reported as having fallen to DKK22m from DKK381m in Q1 2019, and it said it had managed to retain a solvency ratio of 189%, which was on a par with the level at the end of December 2019.Ole Krogh Petersen, Danica Pension chief executive, said: “We have a solid and robust investment strategy, which we are sticking to and which we believe will see our customers’ savings safely through to the other side of the corona crisis.”On the business side, the pensions subsidiary said premiums had increased at both its Danish and Norwegian operations in this year’s first quarter from the same period last year by 9% and 15% respectively.This came after it had gained around 200,000 new customers from its takeover of SEB Pension initiated two years ago, Danica Pension said.
Ray and Corinne Sparks turned their Moorooka home into something very special. (AAP John Gass)An expansive deck was built on the top floor with enough timber flooring to create plenty of room for entertaining and relaxing outside as well as indoors. “It is a real outdoor house — when you have animals and kids it is fantastic having big outside areas like that for them to wander,” he said. WHERE BUYERS HAVE THE POWER Rocks help the pool fit in with the natural style of the property.Inside, furniture and accessories were carefully chosen to fit with the natural theme, from the combustion wood fireplace to the earthy-toned tiles, and timber and cane ceilings fans.“I guess we have been doing things to this house forever and we never stopped,” Mr Sparks said.He hoped the next owners liked the theme, but said it was a home with a lot of options and space for experimentation. “It is pretty much a naked house, we left it raw,” he said. The home will be auctioned tomorrow on-site by Damon Warat from Ray White — Ascot at 1pm. Video Player is loading.Play VideoPlayNext playlist itemMuteCurrent Time 0:00/Duration 10:02Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -10:02 Playback Rate1xChaptersChaptersDescriptionsdescriptions off, selectedCaptionscaptions settings, opens captions settings dialogcaptions off, selectedQuality Levels720p720pHD432p432p270p270p180p180pAutoA, selectedAudio Tracken (Main), selectedFullscreenThis is a modal window.Beginning of dialog window. Escape will cancel and close the window.TextColorWhiteBlackRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentBackgroundColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentTransparentWindowColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyTransparentSemi-TransparentOpaqueFont Size50%75%100%125%150%175%200%300%400%Text Edge StyleNoneRaisedDepressedUniformDropshadowFont FamilyProportional Sans-SerifMonospace Sans-SerifProportional SerifMonospace SerifCasualScriptSmall CapsReset restore all settings to the default valuesDoneClose Modal DialogEnd of dialog window.This is a modal window. This modal can be closed by pressing the Escape key or activating the close button.Close Modal DialogThis is a modal window. This modal can be closed by pressing the Escape key or activating the close button.PlayMuteCurrent Time 0:00/Duration 0:00Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -0:00 Playback Rate1xFullscreenJune, 2018: Liz Tilley talks prestige property10:02 PEACEFUL RETREAT: This Brisbane home is designed to be at one with nature.WITH its natural look of aged wood and earthy tones surrounded by plenty of trees, this home is unlike others in its near-city neighbourhood.Situated at 60 Northview Outlook in Moorooka, the unique look was a long-term goal of Ray and Corinne Sparks when they bought the home.“It is a seriously peaceful house, it is a nature lover’s retreat,” Mr Sparks said.When they bought the home back in 1995, they even needed to clean out groceries and household goods that had been left behind.“We had to get a big skip bin just to clean it out,” he said. ENTIRE TOWN ON SALE The natural look was an extended project.But with a 1466sq m block and city views it had the potential to be what they wanted. The backyard was the perfect place for a pool, and after it was installed they brought in large rocks from the countryside to fit with the natural theme. “We laid them (the rocks) there so it was like a billabong,” Mr Sparks said. PRESTIGE HOME SELLS IN JUST TWO DAYS More from newsParks and wildlife the new lust-haves post coronavirus18 hours agoNoosa’s best beachfront penthouse is about to hit the market18 hours ago
Gina Rinehart has one of the most prized riverfront properties in Brisbane. Picture: NIGEL HALLETTTHE property world was aflutter over the weekend after a mysterious property update showed Australia’s richest woman Gina Rinehart was relisting her prized Brisbane estate.It seemed for all intents and purposes that the mining magnate had changed her mind about her stunning Hawthorne riverfront estate, with a listing notice linked to a Brisbane real estate agent showing the home had been on the market for five days.The riverside estate bought by Gina Rinehart’s Wingfield Avenue firm in August 2014.Whincup home doubles in priceCricket legend sells Brisbane homeFashion blogger sells beach houseBut 24 hours later, The Courier-Mail can clarify that Ms Rinehart has no intention of flicking the sprawling riverfront home.The agent linked to the update confirmed the property was not relisted “in any way shape or form” and that the entry “must be a mistake”.More from newsParks and wildlife the new lust-haves post coronavirus17 hours agoNoosa’s best beachfront penthouse is about to hit the market17 hours agoThe stunning home needed a custodian willing to put in the funds required to maintain the heritage property.Ms Rinehart bought the estate in a multi-sale for $14m off former Mountain Designs chairman Greg Nunn and his wife Alwyne, and followed that deal with a further $4m purchase of a neighbouring block.The titles to the riverfront site were all transferred to Ms Rinehart this year from her Wingfield Avenue firm.Wingfield snapped up the neighbouring block as well (marked in yellow).Wingfield Avenue also holds three other residential titles in Brisbane — a stunning $3.175m home in Chelmer, a $4.95m waterfront property in East Brisbane that was listed for rent two weeks ago, and a vacant block beside it. It also owns three prestige properties in Western Australia.Ms Rinehart was last year renamed as Australia’s richest person by Forbes.FOLLOW SOPHIE FOSTER ON FACEBOOKVideo Player is loading.Play VideoPlayNext playlist itemMuteCurrent Time 0:00/Duration 0:35Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -0:35 Playback Rate1xChaptersChaptersDescriptionsdescriptions off, selectedCaptionscaptions settings, opens captions settings dialogcaptions off, selectedQuality Levels720p720pHD540p540p360p360p270p270pAutoA, selectedAudio Trackdefault, selectedFullscreenThis is a modal window.Beginning of dialog window. Escape will cancel and close the window.TextColorWhiteBlackRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentBackgroundColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentTransparentWindowColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyTransparentSemi-TransparentOpaqueFont Size50%75%100%125%150%175%200%300%400%Text Edge StyleNoneRaisedDepressedUniformDropshadowFont FamilyProportional Sans-SerifMonospace Sans-SerifProportional SerifMonospace SerifCasualScriptSmall CapsReset restore all settings to the default valuesDoneClose Modal DialogEnd of dialog window.This is a modal window. This modal can be closed by pressing the Escape key or activating the close button.Close Modal DialogThis is a modal window. This modal can be closed by pressing the Escape key or activating the close button.PlayMuteCurrent Time 0:00/Duration 0:00Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -0:00 Playback Rate1xFullscreenGina Rinehart’s property portfolio00:35