Currencies outside the local currency benchmark are also permitted, according to the search details.Though the mandate is on a long-only basis, opportunistic shorting of currencies is allowed.The mandate should be managed actively, and index products or enhanced index products are not of interest, according to Kirstein.Managers with a track record of fewer than three years, or those without an existing strategy, are welcome to participate, according to the search, provided they can clarify their skills within the asset class. The deadline for the search is 22 April.In other news, the UK’s Pension Protection Fund (PPF) has appointed six firms to its newly created Assessment Period Legal Panel (APLP).The panel is the last in a series of five panels the UK pensions lifeboat has set up to help schemes transition to the PPF, in addition to the Financial Assistance Scheme (FAS) wind-up.The firms appointed to the APLP are Burges Salmon, Clyde & Co, DWF, Eversheds, Norton Rose Fulbright and Osborne Clarke.The new panel, which started yesterday, is to focus on the tasks of admissible rules, equalisation and the benefit specification, the PPF said. The APLP will initially run for a two-year period. A Danish pension fund is looking for an asset manager to run a DKK750m (€100.4m) local currency, global emerging market debt mandate, or a broader blended mandate, using IPE-Quest.Search QN1403 is being initiated by consultancy Kirstein Finance on behalf of the unnamed pension fund.Kirstein Finance said the aim of the segregated mandate was to consistently outperform a benchmark with similar asset allocation, irrespective of style, by selecting investments across emerging debt asset classes.The investment universe can be local currency sovereign bonds, but allocations to hard currency sovereign bonds and hard currency corporate bonds are allowed, as are small allocations to local currency corporate bonds.
The UK government has relaxed the need for independent financial advice for savers moving defined benefit (DB) funds to defined contribution (DC) after April.In conjunction with the budget freedoms announced last year for DC savers, which come into effect this year, the government placed the requirement on DB funds to provide independent financial advice for all members wishing to transfer funds from DB to DC.However, as the law – which removes the requirement for DC savers to annuitise – reaches its final legislative stages, the government said this would only be required with DB savings exceeding £30,000 (€40,170).Towers Watson senior consultant Stephen Green said: “The fact advice is not required for small pensions does not mean this is a decision to be taken lightly – especially where people have little else besides their state pension to fall back on. “But if someone’s other final salary pensions will provide them with a good income in any case, their desire to swap a small pension for a pot of capital they can access as they like may have overridden any financial advice not to do so.”The government previously consulted on whether to outlaw the transfer of DB funds to DC in light of the freedoms granted to the latter.However, industry respondents suggested few transfers would take place to materially impact DB investment strategies and sovereign bond markets.In other news, the UK Pensions Regulator (TPR) confirmed the number of penalties issued to employers breaching auto-enrolment requirements reached 169 by the end of 2014.In the last three months of the year, the regulator issued 166 fixed penalty notices as employers that had staged auto-enrolment failed to complete their declaration of compliance.It also issued more than 1,000 compliance notices forcing employers to amend failures in compliance, before being fined.TPR auto-enrolment director Charles Counsell said: “It appears some medium employers waited for a prompt from the regulator before completing their automatic-enrolment duties.”The regulator announced last year auto-enrolment policing would dominate its budget and agenda, with its share of TPR’s budget rising from 37% to 52%.Expenditure on auto-enrolment is said to have risen by 90% as TPR manages the staging of smaller employers.Law firm Pinsent Mason’s pensions partner, Tom Barton, said threats of regulatory action did not just come from TPR but also the tax office and employees.“The regulatory scrutiny could also throw a spotlight on practices such as contractual enrolment, unilateral changes to contribution rates and salary sacrifice,” he said.“These are employment contract issues employers need to get right.”
The pension funds of several financial companies in the Netherlands are in exploratory talks to launch a ‘general pension fund’, or APF, for the financial sector.Representatives of the pension funds of custodian KAS Bank, pay firm Equens and GE Artesia Bank said they were participating in working groups to consider their options.The pension fund for Van Lanschot Bankiers previously confirmed its participation in January, making for a total of four participants.However, the various actors, when interviewed by IPE sister publication PensioenPro, made no mention of the other participants, confirming only their own individual participation. All players involved in the working groups stressed that talks were at a preliminary stage, and that participants in the discussions could pull out, and that other parties could join in.The €615m pension fund of Equens said it took part in talks due to its falling number of participants, as well as its “considerable” costs per participant.Its chairman, Ben Haasdijk, said: “The APF is the only right option for the future.”He said his scheme preferred an APF to a commercial provider to avoid having to buy services from it.The €288m scheme of KAS Bank cited the benefits of scale, as well as the ability to maintain its own identity.According to Tamis Stuker, board member of the KAS pension fund, all participating companies are likely to have an individual ring within the APF.The Dutch scheme of GE Artesia Bank, a division of US-based General Electric, also confirmed that it was participating in the working groups, but it said it did not yet know whether it would join the APF.Irma Weering, trustee of the scheme, said it was still assessing its future, as its employer ceased its Dutch operations in 2013.The Dutch pension fund of Royal Bank of Scotland previously showed an interest in the APF and recently announced that it was also weighing its options for the future.If all schemes were to join the APF, the new general pension fund would have approximately 10,000 participants and more than €2bn in assets.The new APF pensions vehicle allows the implementation of multiple pension plans within a single scheme, with a single independent board, while ring-fencing assets.The aim is to cut implementation costs through the benefits of scale.The APF is expected to be introduced on 1 January 2016.In 2012, several companies tried unsuccessfully to establish a new industry-wide pension fund – dubbed Pecunia – for the financial sector.
European pension funds have held initial talks on their class action lawsuit against the Lloyds Banking Group over the botched takeover of Halifax Bank of Scotland (HBOS) in 2008.Law firm Harcus Sinclair has amassed 6,000 claimants against the UK banking firm, including 300 pension funds and institutional investors from Canada, Europe, the UK and the US.The potentially £300m (€424m) class action suit is in reference to Lloyds TSB bank’s directors allegedly misleading shareholders into approving a takeover of HBOS despite the latter’s finances not being in order.Shareholders approved a takeover of HBOS in November 2008. However, the group now claims Lloyds TSB directors breached their legal duty in recommending the takeover, and in the information provided.Harcus Sinclair said the bank’s directors failed to disclose to Lloyds TSB shareholders that it made a secret £10bn loan facility to HBOS, or that HBOS received £25.7bn from the Bank of England and $18bn (€12.5bn) from the US Federal Reserve.The merged firm – renamed Lloyds Banking Group – then received significant bailouts from the UK government, which still retains a 21.8% stake.Claimants – which include the Royal Borough of Kensington and Chelsea Pension Fund, among other local government schemes – said the takeover was not in their best interest.They said it diluted holdings in combined banking group and included a “gross over-valuation” of HBOS.“It was a breach of the directors’ duties to the Lloyds TSB shareholders to permit the extraordinary general meeting to take place, on the basis of what they knew to be incomplete and misleading information, statements and advice,” Harcus Sinclair said.In a case management conference held yesterday, the claimants – whose lawsuit is being funded by Therium Capital Management – demanded that defendant Lloyds Banking Group reveal all legal advice provided to directors on the takeover.Claimants – which owned around 300m shares in Lloyds TSB at the time, estimated to be around 5% of market value – believe the bank’s legal advice would have included informing shareholders of the private loan facility and HBOS’s other financial assistance.Mr Justice Nugee, the presiding judge, ruled in favour of the claimants and said both parties must provide budgets to mitigate excessive costs in the case.The case is expected to continue, with pre-trial hearings this year, before beginning towards the end of 2016.The suit is among many class action cases launched against UK banks in the aftermath of the 2008 financial crisis.Five UK institutional investors, including the Universities Superannuation Scheme, are challenging the Royal Bank of Scotland over a £12bn share issue in 2008 used to fund the controversial takeover of Dutch bank ABN AMRO.
AP4 has backed a shift to a prudent person principle, despite the Swedish government’s decision to cancel the proposed reform of the buffer fund system.The government dropped plans to close two of the buffer funds last week after it became apparent the cross-party Penisonsgruppen, tasked with agreeing pension reform, could not reach an agreement. Mats Andersson, managing director at AP4, predicted it would be “some time” before any new reform proposals are tabled.“We’ve been under investigation for three-and-a-half years,” he told IPE, referencing the start of the initial Buffer Fund Inquiry chaired by Mats Langensjö. “We can’t continue to function under these circumstances.” Andersson said the proposal discussed by Pensionsgruppen would have made life for the buffer fund system “so much worse”.But he did qualify his condemnation of the proposals, which included an overhaul of sustainable investment guidelines and a shift to a prudent person model under a principal sitting within a proposed National Pension Fund Board.“I would love to see other regulation in terms of how much we can invest in unlisted [assets],” he said.AP6, the private equity fund set to be merged with AP2 under the proposals, has argued that the creation of a so-called excellence centre for unlisted assets would be the best solution for the system, despite the decision to abandon the reform.The proposal was for the remaining three AP funds to pool unlisted investments, potentially with a joint investment committee overseeing the vehicle’s activities.For his part, Andersson was also in favour of a shift away from binding investment regulation to a prudent person principle, one of the main proposals contained within the Buffer Fund Inquiry’s report. “You can implement the prudent person into the system we have today,” he said. “That’s the only part I really miss.”He added: “But given the alternatives, [abandoning the proposals is] the best we could hope for.”
Willis Towers Watson – Marco Linders has been named senior consultant for business development at Willis Towers Watson Netherlands in Amstelveen. He joins from Mercer, where he has been a business developer for eight years. Before then, he was commercial leader at Dutch consultancy Akkermans & Partners.Redington – The UK-based consultant has announced plans to appoint a dedicated chief executive. Since inception in 2006, co-founders Robert Gardner and Dawid Konotey-Ahulu have held the combined roles of client consultants, co-chief executives, board directors and shareholders. An internal selection process has begun, and a formal announcement will be made in due course, Redington said.ING Pension Fund – Armin Becker has started as director of the pensions bureau of the ING CDC Pension Fund, established in 2014. Previously, he has served as director of the €1bn Arcadis Pensioenfonds, which adopted collective defined contribution arrangements in 2004.Allianz Global Investors – Eugenia Jackson has been appointed as a senior governance specialist and ESG analyst. She joins from F&C Investments, where she was an associate director. Matthew Couzens has been appointed as a regional sales manager for London, joining from Canada Life Investments, where he held a similar role.Commission de Surveillance du Secteur Financier – Claude Marx has been sworn in as director general of the Luxembourg financial services supervisory authority. He had been appointed to the post last year but took up his position this week. He replaces Jean Guill, who is retiring. Marx joins from Lombard International Assurance, where he was chief executive. He also previously worked at HSBC Private Bank (Luxembourg).Standard Life Investments – Euan Stirling has been promoted to head of stewardship and ESG investment. Stirling joined SLI in 2001 from Schroder Investment Management. He has served as a senior fund manager and investment analyst in the UK equity team. APG, UNOPS, ABP, Kempen Fiduciary Management, Alberta Investment Management Corporation, Achmea Investment Management, Willis Towers Watson, Mercer, Redington, ING Pension Fund, Allianz Global Investors, F&C Investments, Commission de Surveillance du Secteur Financier, Standard Life InvestmentsUNOPS – Bart le Blanc, chairman of the supervisory board at Dutch asset manager APG, has been appointed as a member of the new investment committee of UNOPS, the Copenhagen-based UN organisation for humanitarian, peacekeeping and development missions. UNOPS has also named Knut Kjaer, an external member of the investment committee of the €356bn civil service scheme ABP, on its investment committee. Kjaer is the founding chief executive of the €400bn Norges Bank Investment Management, manager of Norway’s sovereign wealth fund. UNOPS has been managing its investment and treasury services in-house since 1 January. It took over these tasks from the United Nations Development Programme to increase flexibility and efficiency.ABP – Jan van Zijl has been appointed vice-chairman of the €357bn Dutch civil service scheme, as of 1 April. He will succeed Cees de Veer, who is to retire. Van Zijl had been nominated by VSO, the industry organisation for employers in all government sectors. Currently, he is chairman of the MBO Council, the representative body for secondary occupational education and adult education. Previously, he chaired the Council for Work and Income. He has also been an MP for the PvdA party. Meanwhile, Jan Christiaan Hellendoorn as head of corporate communication as of 1 March. In this new position, he will be responsible for communication to participants, the public and the media. Heading a four-strong team, Hellendoorn is to advise the pension fund’s board on strategic matters. He will also be tasked with public affairs, in co-operation with APG, ABP’s asset manager and pensions provider. Hellendoorn has been head of communications at supermarkets chain Albert Heijn since 2005.Kempen Fiduciary Management – Johan Cras has been appointed managing director, based in London. His appointment follows Remco van Eeuwijk’s decision to accept the role of chief risk officer at the Alberta Investment Management Corporation. He joins from Achmea Investment Management, where he was member of the executive committee with responsibility for the fiduciary management business. Before then, he held several positions at Russell Investments, latterly as chief executive for the EMEA region.
Germany’s Universal-Investment has been sold to a UK private equity firm, bringing to an end a decades-long ownership by local banks.Montagu Private Equity acquired the €280bn asset manager, Germany’s third-largest institutional manager behind Deutsche Asset Management and Allianz Global Investors, for an undisclosed sum.Daniel Fischer, director at Montagu Private Equity, cited Universal’s proven track record spanning 45 years managing Germany’s master KVG market as his firm’s rationale for the deal.“We’re particularly impressed by the performance of the management team, which has developed Universal-Investment into a growing platform with an outstanding reputation,” he added. “We’re excited to work closely with Bernd Vorbeck and his team going forward, accompanying them through the company’s next growth phase.”Vorbeck, spokesman for the board at Universal, also emphasised the KVG market’s importance the company’s success.“Our recipe for success includes our employees’ commitment and expertise, our independence and our distinct business model as [the] leading Master-KVG platform,” he said. “That’s why we’re especially excited to have found a new partner and owner in Montagu, which will continue to actively support this strategy in future.”Joh. Berenberg, Gossler & Co, also known as Berenberg Bank, and Bankhaus Lampe have each owned 50% of Universal since 2012, when they jointly acquired German regional bank LBBW’s 27% stake.Universal has seen a rapid increase in assets under management over the last decade, growing from €60bn to €280bn over the period.Within Montagu’s portfolio, it will complement the London-based private equity firm’s recent acquisition of Equatex, a global employee share plan administrator.Last year, it also bought Denmark’s largest property manager DEAS from its pension fund owners PKA and Sampension.
Ilmarinen, which had total assets of €35.7bn at the end of June this year, has around 23% of its assets in direct equity investments, which are worth some €8.5bn.”At the same time, we have sold investments in companies where more than 30% of the business was in coal,” Mursula said.The pensions insurer said it would only invest in such companies in cases where they had credible plans to reduce the use of coal in the future.Ilmarinen said the plan to increase sustainable direct equity investments forms part of its climate-related responsible investment principles, which it will publish in their entirety later this autumn. Ilmarinen said the principles will set out “ambitious, concrete targets” aimed at curbing climate change.“We genuinely believe that considering climate change within our investment activities is a strategic and responsible choice, in order to ensure the best return for Finnish pensioners in the long-term,” Mursula said.He said Ilmarinen calculated the carbon footprint of its equity portfolio for the first time in 2015, and had now committed to follow this up every year. “This year, the portfolio of direct greenhouse gas emissions decreased by 27%,” he said, adding that this had been achieved by reducing investments in coal and increasing investments in renewable energy, with an emphasis on electrical companies. “It is our aim to maintain the same trend in the future,” he said. However, climate change would not be stopped just by buying or selling shares, he said.“It requires changes in operations, and for an investor, the best opportunity to influence climate change mitigation is to try to influence the practices of the companies it owns,” he said.As an asset owner, Ilmarinen said it supported and encouraged companies to develop energy-efficient and environmentally-friendly solutions, as well as to report openly on emissions and other environmental factors.Solutions-, or impact-focussed, investing is garnering increased interest among large European institutional investors, with major Dutch pension investors and Nordic asset owners recently having put their name to a commitment to step up investment targeted at helping achieve the UN Sustainable Development Goals (SDGs). Finnish pensions insurer Ilmarinen is aiming to double the volume of its direct equity investment related to solutions for sustainable development by 2020, it has announced.Ilmarinen’s CIO Mikko Mursula said: “We are actively seeking investment opportunities, where the business is associated with, for example, renewable energy, clean water, or improving resource efficiency. “Companies that provide business solutions to global challenges can grow faster than the market, and are therefore also good investment targets,” he said.At the moment, 6% of the annual turnover of Ilmarinen’s direct equity investments derives from sustainable development solutions, and Mursula said the goal is to double this proportion to 12% over the next four years.
The Swiss supreme court has ruled that BVG-Sammelstiftung Provitas, a collective pensions foundation, took inappropriate risks with its investment strategy before it went into liquidation and was closed in 2003.In late 2016 the court partially approved a complaint from the Swiss second pillar guarantee fund, the Sicherheitsfonds, which had to step in to pay legally promised benefits between November 2003 and August 2004.The rescue fund paid around CHF50m (€32m*) to the foundation over that period, although a spokesman at the guarantee fund said this amount has been reduced to around CHF40m due to repayments.In October 2012 the Sicherheitsfonds filed a suit with the social security court in the canton of Zurich to seek CHF8.3m, plus interest, in payment from the foundation’s board of trustees, the spokesman confirmed. The cantonal court dismissed the suit in September 2015, with the guarantee fund then filing a complaint with the supreme court.This has since ruled that, over the course of 2000, the Provitas trustee board violated the basic principle of ensuring the security of its assets by “significantly” expanding its equity investment without having built up adequate reserves beforehand.According to the supreme court ruling document, Provitas increased its equity holdings from CHF8.4m as at the end of 2009 to around CHF21.7m at the end of 2000. This represented a 10 percentage point increase in the share of total asset allocation, from 23.2% to 33.9%.The ruling said Provitas did not increase reserves accordingly before ramping up its equity exposure, meaning that, as at the end of 2000, reserves of only 2.6% were set aside for Provitas’ equity allocation (33.9%) – a “clearly insufficient” amount, according to the supreme court.The Provitas foundation had around 2,000 members in early 2003 before it went into liquidation.The supreme court’s ruling annuls the September 2015 decision from the Zurich cantonal court, which has to revisit the matter.Hans-Peter Konrad, director of ASIP, the Swiss pension fund association, said the supreme court ruling showed how important it was for the bodies governing pension funds to operate professionally.The management and monitoring of Pensionskassen must be responsible, transparent, and geared towards securing the long-term trust of members and other stakeholders, he said. *Based on an exchange rate as at 31 December 2003
Brian Mikkelsen, minister for industry, business and financial affairs, said: “The first loan will be granted as early as this month, and now we are looking forward to the money being put to work in agriculture, which needs new investment to increase effectiveness and boost earnings.”The fund was already in contact with many farmers regarding loans, according to the ministry.Since the new financing vehicle was targeted at farmers who need new investment, but who already have high levels of debt, the new fund is offering subordinated loans that are non-callable by Danish Agricultural Capital. This means that mortgage and banking institutions will be able to treat the investment loans as if they were equity, the ministry said.Individual loans are expected to be for typically DKK5m to DKK10m, for terms of up to eight years and at an individually-determined rate of interest.Between 100 and 200 farms, across sub-sectors, are expected to get loans from Danish Agricultural Capital over the next few years, the ministry said. Four of Denmark’s biggest labour-market pension funds have agreed to invest DKK500m (€67.2m) in a state-backed fund to lend money to the country’s farming businesses.The Danish Ministry for Industry, Business and Financial Affairs is launching the fund, Danish Agricultural Capital (Dansk Landbrugskapital), and investing DKK500m alongside the pension funds via the Danish Growth Fund (Vækstfonden) — a state investment fund set up in 1992.The giant DKK759bn labour-market supplementary pension fund ATP, social and healthcare pension fund administrator PKA, PensionDanmark and Industriens Pension have each committed DKK125bn to the fund.Torben Möger Pedersen, chief executive of PensionDanmark, said: “PensionDanmark and the other investors putting money into the new fund can get a reasonable return and at the same time help deliver financing to skilled farmers who have the courage to invest in their businesses. We will contribute to growth and employment in exactly those areas of Denmark where they are most needed,” he said.