Santander scheme targets disposable income in leisure property deals

first_imgHe added that the scheme was looking into the acquisition of further entertainment venues, as they often presented opportunities to grow income with the opening of other food outlets.“Often these assets were built with public money and it would be uneconomic to do privately. But suitably repriced, they make a very good opportunity for us, particularly where we can see there is scope to add on hotel space, additional corporate hospitality or nightclub facilities.”“We like properties whereby the intrinsic value may take 7-10 years to emerge, and will need work to do it,” he added. “If the value is obvious, it will be wiped off the price.“Because they are perhaps a 7-10 year game, a pension fund would be the natural holder of these assets, but you need a pension fund with the capability to compete effectively in a transactional situation and the governance to support it.”Speaking to IPE’s How We Run Our Money, Barker said that the fund’s strategy was to target distressed situations “where the property intrinsically has a much better value”.“That’s not to say that it’s actually distressed property,” he explained. “It’s a distressed situation where – it could be the tenant, it could be the landlord, or in many cases, it’s the landlord’s banker – in trouble and therefore the need for a transaction leads to a price distortion.” The UK’s £7.8bn (€9.3bn) Santander pension scheme is to grow its exposure to leisure and retail assets in an attempt to benefit from the “mass affluent generation looking to relive their youth”, according to the company’s head of pensions.The master trust, encompassing half a dozen legacy defined benefit funds of varying sizes, has grown its property portfolio by £800m since Antony Barker joined the firm in mid-2012 from consultancy, JLT.As part of the expansion, it has acquired stakes in the Manchester Arena concert venue, a brewery complex in London and Liverpool One, a 16-hectare shopping centre redevelopment.According to Barker, both the price of concert tickets and the speed at which these were sold were good indicators of how UK residents were spending their disposable income.last_img read more

UK Pensions Regulator probes four schemes over poor record-keeping

first_imgThe Pensions Regulator said that, on top of the original seven cases it had opened as a result of last year’s review into scheme record-keeping, it had now opened another four investigations into schemes that were included in that review.The first seven cases were still ongoing, it said. According to the latest record-keeping survey from the regulator, the proportion of schemes failing to measure their common data – basic pieces of information such as the name, address, National Insurance number and date of birth of their members – had risen to 10% in 2014 from 9% last year.On the other hand, it said two-thirds of trust-based scheme members were in schemes that had met the regulator’s common data targets.But it also said a ceiling was being reached in terms of schemes engaging with the process. Warwick-Thompson said pension scheme members had the right to expect to be in schemes that were well run. “With the government’s legislation on quality standards coming into force in under a year, the introduction of automatic transfers and the end of contracting out for DB schemes, it is vitally important all schemes work closely with their administrators to really get to grips with their data and avoid problems and high costs further down the line,” he said.The record-keeping survey showed that large schemes performed better, with only 9% of such schemes not having measured their common data, compared with 44% of small schemes.Large schemes were also more likely to have measured their conditional data – extra, more detailed information such as the employing company, date of leaving, lifestyle, DC transactions and investment splits.While 71% of small schemes did not measure conditional data, 40% of large schemes did. The UK Pensions Regulator has said it is investigating four more pension schemes regarding their record-keeping, and warned schemes more generally to take action to measure basic data such as members’ addresses and dates of birth. Andrew Warwick-Thompson, the regulator’s executive director for DC, governance and administration, said: “It is highly disappointing to see that a proportion of schemes still do not see record-keeping as a priority.”He said more needed to be done to make sure the right benefits were paid to members at the right time, and that schemes that fell short could be named publicly.“We will be working with schemes to improve standards, but we will take action where problems become apparent to us and report publicly on the outcomes, as appropriate,” he said. last_img read more

Brussels pledges to cut regulation to attract infrastructure capital

first_imgThe European Commission has pledged to grow the single market, while reducing regulation, in order to attract private capital to infrastructure projects.The executive’s 2015 Work Programme, published after a speech by Commission president Jean-Claude Juncker to the European Parliament, remained largely unchanged from the leaked version seen by IPE.The Commission’s agenda for the coming year did not see it dropping the planned revision of the IORP Directive, after the proposal was highlighted as “under review” in a November letter by Juncker and his deputy Frans Timmermans.In the document’s introduction, the Commission identified removing both regulatory and non-regulatory hurdles as key to attracting investment to the Continent, but also stressed that it was important to further re-enforce the single market. The introduction also saw the Commission say it would “encourage” the adoption of the Financial Transaction Tax – currently only backed by a minority of member states – and once again highlighted the importance of its proposed Capital Markets Union.It said the CMU would strengthen cross-border capital flows in the single market to “enable capital to be used in the most productive way”.Juncker also shed more light on the Commission’s proposed European Fund for Strategic Investment (EFSI), the cornerstone of his €300bn investment package.In a speech in Strasbourg, he stressed that the EFSI’s launch would go alongside “concrete proposals” to improve the existing investment environment, and by removing barriers in place within the single market.“There will be no sectorial or geographic pre-allocations or ‘quotas’,” Juncker added.“However, technical assistance will be stepped up so project promoters and relevant authorities in all countries will be able to present viable and investible projects.”The emphasis on viable projects will be welcomed by the pensions industry, with the Association of Paritarian Institutions (AEIP) recently stressing that funds should keep in mind their fiduciary duties before investing in infrastructure, as pension assets cannot be expected to fund all projects.last_img read more

Credit Suisse, UBS estimate 8% return for Swiss pension funds

first_imgSwiss pension funds are set to return 7.7% on average over the course of 2014, according to the latest Credit Suisse Pensionskassen Index.Credit Suisse’s estimate is considerably lower than that of Towers Watson, which, on behalf of the Swiss pension fund association ASIP, recently estimated a 10% average return.As a sample, Credit Suisse – as well as UBS – used Pensionskassen that have mandated the banks as global custodians.As of the end of November 2014, UBS estimated a 7% return for Pensionskassen in Switzerland, based on returns after the first 11 months having amounted to 6.98%. It said this would be the second highest return over the last five years, with 2012 having produced similar results at 7%, after a record high of 10.6% in 2009.Based on the Credit Suisse Index, the 7.73% anticipated return would also mark the best average performance for Swiss schemes since 2009.In a statement, it noted that all asset classes, except liquidity (-0.51%), contributed positively to the 2014 annual result.The main positive contributors were foreign equities (2.53%), Swiss equities (1.6%), Swiss bonds (1.46%), real estate (1.43%) and non-CHF bonds (0.85%).The annualised return of the Credit Suisse Pensionskassen Index since 2000 now stands at 2.84% – for the first time since the financial crisis, slightly higher than the annualised legal minimum interest rate of 2.56% that Pensionskassen must grant.last_img read more

Asset management roundup: China’s Interbank Bond Market, RWC

first_img“Partnering with Clearstream places us in an excellent position to help foreign institutional investors tap into opportunities in the CIBM, which is the third-largest fixed income market in the world, with a size of approximately 54trn renmimbi,” he said.In other news, RWC Partners, through its emerging and frontier markets team, has entered into an advisory relationship with RiceHadleyGates (RHG).RHG is an emerging-market strategic consulting firm led by former US secretary of state Condoleezza Rice, former US secretary of defence Robert Gates, former national security adviser Stephen Hadley and former state department official Anja Manuel.RHG will provide strategic input on political and structural market developments to support RWC’s top-down macroeconomic views. HSBC and securities settlement systems provider Clearstream have linked up to enable customers of the international central securities depository (ICSD) to access to China’s Interbank Bond Market (CIBM).In the cooperation, HSBC will be the onshore bond-settlement agent for Clearstream’s overseas institutional investor customers, providing trading execution, settlement and custody services in the Chinese market. Philip Brown, co-chief executive at Clearstream Banking, said: “This development coincides with an important milestone – the inclusion of the renmimbi into the IMF’s SDR currency basket – which is expected to boost investors’ demand for what is already the third-largest bond market in the world.”Ian Banks, head of HSBC Securities Services for Asia-Pacific, said a deep and liquid domestic bond market was a major step on the road to China’s achieving its ambition of making the renmimbi a truly global currency.last_img read more

Think tank questions PRI signatories’ ESG capacity

first_imgDedicated ESG specialists are rare at institutions signed up to the Principles for Responsible Investment (PRI), in particular at asset owners, according to analysis carried out by climate and energy think tank E3G.The analysis found that, in general, PRI signatories directly employed one ESG specialist per $14bn (€13bn) of assets managed on average. One-third of its signatories directly employed no dedicated ESG staff* and a further 20% employed only one ESG specialist.E3G said this meant that over 500 PRI signatories directly employed one or no ESG staff. There are more than 1,700 signatories to the PRI.Signatories that employed a high proportion of ESG staff tended to be smaller boutique investors, according to the analysis. Source: E3GESG specialists as a percentage of total staff by institution typeWhere asset owners did employ ESG specialists, they said, these employees tended “to define an RI [responsible investment] policy and monitor its implementation by investment managers”.Policymakers should understand this difference and take it into account when developing sustainable finance strategies, said Egli and Maule.“Sustainable finance policy responses should acknowledge the fact that best practice development of RI policies needs to start with asset owners, even if much of the implementation is “one level down” at investment managers,” they said.E3G is represented on the European Commission’s High Level Expert Group on Sustainable Finance.A senior responsible investment specialist at a UK pension fund recently told IPE it was positive that asset managers had begun to make more senior appointments in the responsible investment area, but this trend had yet to materialise in the asset owner segment. In contrast to asset managers, asset owners were not sufficiently valuing the multi-disciplinary skills of ESG staff, the pension fund executive said.E3G’s Egli and Maule said they explored the possibility that signatories declared no dedicated ESG staff because they fully integrate responsible investing throughout their business, but suggested this did not bear up.“This could be true in certain circumstances, for example at investment managers that specialise in ESG investing,” they said. “However, based on our conversations with many leading responsible investors and observing the data, we find that boutique ESG investors tend to declare all staff as ESG.”Overall, Egli and Maule conclude that “while some investors outsource responsible investing, and others claim to take an integrated approach, it is clear that the majority of investors assessed here need to rapidly expand and strengthen their in-house expertise by employing more specialists and training existing staff”.*According to E3G, the PRI defines ESG specialist/staff as follows: “Dedicated responsible investment/ESG staff are those individuals with the majority of their time allocated to responsible investment/ESG activities (either oversight or implementation).” One quarter of the signatories in the dataset used by E3G were asset owners and the rest were investment managers.The authors of the E3G briefing, “The lack of ESG capacity at leading investors”, Florian Egli and Sam Maule, said that while the vast majority of asset owners and investment managers employed fewer than 10% of their staff as ESG specialists, investment managers tended to hire more dedicated ESG staff than asset owners (see graph).#*#*Show Fullscreen*#*#last_img read more

ING scheme loses 0.6% in second quarter

first_imgThe pension fund’s coverage ratio rose by 1.4 percentage point to 139.4% since March, but is down by 2.8% since the start of the year.ING’s pension fund said it had increased further its inflation hedge, made up of an allocation to inflation-linked bonds and inflation swaps. At the end of 2016, it had hedged 14.4% of the inflation risk.The €18.8bn Philips Pensioenfonds reported a quarterly return of 0.8%, taking its first half result to 1.3%. The scheme’s funding ratio rose to 112.5%.It said that it had moved its 7.5% cash position from its return portfolio to its matching portfolio.Its cash holdings comprised short-term loans with a good creditworthiness and therefore had a low risk profile like its fixed income allocation, the pension fund explained. It emphasised that the shift didn’t mean its investment policy had changed.The Philips scheme also said it had increased the diversification of its 30% government bonds allocation within and outside Europe.Jasper Kemme, the pension fund’s chief executive, told IPE that just over half of its holdings had been invested in euro-denominated bonds, as well as in government paper of non-euro countries including Denmark, Sweden and Switzerland.The pension fund also invested in government bonds of the UK, the US, Canada and Australia, he said.Progress, the €5.2bn closed defined benefit scheme of Unilever, saw its coverage ratio rise by 5 percentage points to 130% between April and June.Following rising interest rates, the scheme’s assets dropped by €14m. However, its liabilities, which are discounted against the interest rate, fell by €100m, it said.Forward, Unilever’s new €153m defined contribution scheme, said its funding had remained at 142%.The Unilever pension funds did not disclose their quarterly return figures.The €3.3bn company scheme Pensioenfonds TNO said it had generated 0.6% over the first six months, after losing 0.5% during the second quarter.During the first half of the year, the pension fund of the technical research institute said its fixed income holdings, including residential mortgages, had lost 0.6%.Equity and property gained 3.8% and 0.7%, respectively, while private equity lost 8.3%.The TNO scheme added that its currency hedge – covering part of the risk of its investments in dollar, sterling and yen – had generated 1.1%. However, it had lost 0.5% on its interest rate hedge, due to rising swap rates.The pension fund closed the first half year with a coverage ratio of 110%.The Q2 losses incurred by ING and TNO reflected the experiences of the largest multi-employer schemes. Of the five biggest Dutch funds, none generated a positive return in the second quarter. The €26.6bn ING Pensioenfonds said it lost 0.6% on investments during the second quarter, chiefly due to rising interest rates and the appreciation of the euro relative to the dollar.The closed scheme said that its 75% matching portfolio lost 0.8% as a consequence of the impact of increased interest rates on its fixed income holdings.The appreciation of the euro negatively affected its investments outside the euro-zone, leading to a 1.3% loss on its return portfolio, it added.The ING scheme made lost money on equity (down 1.7%), emerging market debt (down 3.7%) and real estate (down 2%). Credit and alternative investments gained 0.7% and 2.1%, respectively.last_img read more

Dutch transport sector pension schemes resume co-operation talks

first_imgBoth a spokesman for SPF and Peter-Paul Witte, SPOV’s chairman, declined to elaborate on the new discussions.However, in its own annual report, SPOV said that a recent review had indicated that the need for growth and lower costs remained. The scheme said it would not be able to achieve sufficient growth under its own steam.Such growth could be possible by focusing on the entire public transport sector, the SPOV board said, which could include future co-operation with SPF.In its annual report, SPOV said it also wanted better performance from SPF Beheer so that its administrative and financial quality would be assured for the longer term.The board indicated that it would decide this year whether or not to continue with the joint provider beyond 2019. In 2016, SPOV’s relationship with SPF Beheer was among the reasons why the co-operation talks failed, it said.Railways scheme boosts funding with 6.7% gainIn its annual report, SPF recorded a net return of 6.7% for 2017, adding that its funding had improved by more than 10 percentage points to 112.7%. This had enabled the scheme to grant an indexation bonus for members of 0.16%.SPF said it had divested its 5% stake in commodities, citing the carbon footprint of the oil and gas component of the asset class as well as the its impact on food prices.It reinvested half of the proceeds into its residential mortgages portfolio, which increased to 7.5%, while keeping the other half as liquid assets.The scheme said it had lost 5.2% on its commodities holdings, while government bonds and its interest rate hedge had also incurred losses of 1% and 0.7%, respectively.Almost all other asset classes yielded positive results, with equity (16%) and private equity (16.1%) the best-performing investments.Infrastructure and residential mortgages produced 11.9% and 3.7%, respectively.SPF also made clear that its impact portfolio for environmental, social and corporate governance (ESG) related investments had incurred a 0.2% loss. The majority – €16m – of the committed €25m hadn’t been called in yet.The ESG portfolio comprises 0.5% of the scheme’s assets and is set to double in size.SPF said it had set up a dedicated advisory committee for ESG issues, which is to investigate whether climate change requires the pension fund to change its policy. The €16.5bn Dutch railways scheme SPF and the €4bn public transport scheme SPOV are again exploring the options for co-operation – including a potential merger.In its annual report for 2017, SPF said it had approached SPOV for a second time, after a previous attempt to merge failed in 2016.At the time, the schemes – which both use SPF Beheer as their provider – concluded that a merger would not offer their participants sufficient benefits.Although the smaller SPOV was actively seeking co-operation, it was also keen to keep its own identity.last_img read more

Queenslander sold for 25pc less than Brisbane’s median price

first_imgThe home is solid, with a hardwood frame and timber floors.But the ultimate feather in the cap for the new owner has got to be the potential for water views with the home offering “options to renovate or raise to enhance northern bay views”. FOLLOW SOPHIE FOSTER ON FACEBOOK Great space for a new bathroom. 72 North Road, Brighton, sold on June 21 for $400,000.IN what’s got to be one of the bargains of the week, a sprawling Queenslander in Brisbane’s north has sold for $400,000, about 25 per cent less than the city’s median house price.It was $132,500 under the Brisbane median of $532,500 for the new owner of the two bedroom, single bath, single car park house at 72 North Road, Brighton. The suburb is considered a high demand one, with 640 visits per property compared to the Queensland average of 362. Brisbane apartment slump over Checklist for buying at auction Entire town for less than one average house Beautiful high ceilings.More from newsParks and wildlife the new lust-haves post coronavirus18 hours agoNoosa’s best beachfront penthouse is about to hit the market18 hours agoAgent Carl Calio of Calio & Scott Real Estate listed it as the “ideal hillside starter home”.“In 1948 the parents proudly ran a dairy cattle from this original family home in Brighton,” was how he described it. “Located on a high and dry block with 16.7 metre frontage the weatherboard home has separate lounge and dining rooms, two bedrooms and two sleep-outs upstairs. “The kitchen and bathroom are in original condition and there are two store rooms, laundry and second water closet downstairs.” 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 property10:02last_img read more