Varma, Finland’s largest private investor and mutual pension insurance company, has appointed Risto Murto as president and chief executive.Murto will step into his new role on 1 January 2014, replacing Matti Vuoria, who will retire.Murto is currently the €36bn firm’s deputy chief executive and a member of the executive group, serving as the CIO.He joined Varma in 2006. Prior to that, from 1997 to 2005, he held the roles of managing director and director at Opstock.Murto has also worked as head of research at Erik Selin, today called Carnegie, and as head of research at the Bank of Finland.Sakari Tamminen, chairman of Varma’s board, said: “Murto has an extensive background and strong competence in matters concerning the international economy, as well as in managing the assets of a pension company.“A key issue for the pension system, both now and in future, is the success of investment operations.”The appointment is said to reflect the growing importance and appreciation in the local pension scene of investment expertise as asset volume has been increasing.During Murto’s time as Varma’s CIO, the firm’s assets under management have grown from €24.6bn to the current €36bn.As Murto himself pointed out, “an investment professional has not become the chief executive of a mutual insurance company in the Finnish work pensions industry before.”According to him, at present, the most important challenge in managing the country’s largest pension portfolio is low interest rates.“On the other hand, we are lucky, as Finnish legislation does not force us to invest in risk-free bonds, like regulations in some other countries do.” Over the first half of 2013, Varma’s investments returned 3.2%.The best-performing asset class was equities, with a return of 7.1%, and hedge funds, which generated a return of 4.4%.At present, Varma’s portfolio is invested in equities (36%), fixed income (34%), property (12%), hedge funds (13%) and other investments (5%).“The main change in our asset allocation over the first half of 2013 was a boost in our equity exposure, from 34% to 36%,” Murto said.“The increase took place outside Finland, although we still have a strong home bias – a 40% exposure to Finnish listed stocks.”
Some 57 managers – which have either completed or have committed to completing the framework – now represent more than £13trn (€16trn) of assets under management.Joanne Segars, chief executive at the NAPF, said the fact 51 asset managers had already completed the framework, and with six more committing to do so, was a huge step forwards in only four months.“This is a huge step towards ensuring pension funds can readily understand and compare the stewardship approach taken by investment managers,” she said.However, she raised concerns over the fact that 15 asset managers signed up the FRC’s Stewardship Code but were yet to commit to completing the lobby group’s disclosure framework.She called on the remaining managers to do so, questioning their commitment to engaging with pension funds and improving transparency.“A number of signatories of the Stewardship Code have yet to complete a framework,” she said.“Inevitably, this raises questions about their willingness to give transparency in this crucial area.“With pension schemes like those sponsored by BT, Barclays, British Airways, Marks & Spencer, Nationwide and Whitbread having signed up to the Stewardship Code, it is hard to imagine why an asset manager would not want to disclose their stewardship credentials to existing and future clients.” The UK’s National Association of Pension Funds (NAPF) has seen a further six asset managers sign up to its stewardship framework, joining the 51 managers already taking part.The NAPF launched its Stewardship Disclosure Framework last autumn as it looked to foster engagement and transparency between pension funds and those who manage institutional money.Since its inception, and with the further six asset managers announced, a total of 57 firms have signed up to the framework.The framework, which is set alongside the Financial Reporting Council’s (FRC) Stewardship Codes, sees managers publish their activities and voting habits, increasing transparency to current and prospective pension fund clients.
Spanish pension funds have achieved average returns on their investment portfolios of 6.8% for calendar year 2014, according to preliminary figures from Mercer.This takes their average cumulative returns for the three years to 31 December 2014 to 8.4% per annum, and 5% per annum for the five years to the same date.The figures, from Mercer’s Pension Investment Performance Service (PIPS), are based on a significant sample of the biggest occupational pension funds and pension fund managers in Spain, and include estimated returns for December 2014.They are also broken down between three asset classes – fixed income, euro-zone equities and non-euro-zone equities. The biggest return over 2014 in terms of asset class – 22.1% – came from non-euro-zone equities.Mercer said there were two factors behind this: the increase in valuations in non-euro-zone stock markets, and appreciation in non-euro currencies, especially the US dollar.Non-euro-zone equities also returned an estimated 1.4% during December for the funds in the survey.In contrast, euro-zone equities were the asset class that performed most poorly, with a return for the year of only 4.9%, including a loss of 3% in December.This helped drag down the average estimated return over all asset classes to -0.04% in December.Meanwhile, the fixed income return during December was 0.5%, and 9.2% for the whole of 2014.Mercer said the return was buoyed by the fall in interest rates in the euro-zone, and by more favourable sentiment towards Spanish fixed income, which has benefited from a further reduction in the risk premium.Mercer has been compiling the PIPS survey since 1997.
IPE understands that there have also been discussions about including General Electric’s Irish pension assets in such a pan-European fund.The Belgian government has been keen to establish the country as a host for cross-border IORPs, with the Finance Ministry expected to announce further measures in the coming weeks to make it more attractive for funds to base themselves in Belgium.Daniel Bacquelaine, the finance minister, reportedly met with MasterCard to discuss a potential cross-border fund in Belgium when he was on a trip in the US in June. Earlier this year, the Belgian regulator said it estimated that several billion of euros of Dutch pension assets could be transferred to Belgium-based IORPs over the next year if Dutch companies followed through with their current plans.The Dutch pension fund for BP aims to relocate to Belgium this year, with the company’s Irish, Spanish and Swiss pension funds having done so already, while ExxonMobil has said it would like to relocate its Dutch pension scheme to Belgium.The FMSA’s website does not yet show an approved auditor for the GE European Pension Fund, but a daily management committee has been set up for the fund.The fund looks to have first been registered in December 2014, according to company documents. Belgium’s financial supervisory authority (FSMA) has approved a European pension fund for US multinational General Electric, understood to be the cross-border fund the company would like some of its existing Europe-based pension schemes to join. The FSMA authorised the GE European Pension Fund last Wednesday, 21 September.The fund takes the legal form of an Organisme de Financement de Pensions (OFP), Belgium’s IORP-compliant vehicle for pensions provision.GE did not return requests for comment by the time of publication, but it is well-known that the multinational has been considering launching a cross-border pension fund in Belgium, and Dutch GE-affiliated pension schemes have been debating joining such a fund.
London’s largest public pension fund is facing renewed calls to divest from fossil fuel-related holdings as it emerged it held companies involved in the Dakota Access Pipeline.The London Pension Fund Authority (LPFA) had holdings in three companies involved in the controversial US development, according to portfolio data from 30 September 2016 circulated by campaign group Divest London. The investments were bonds issued by Energy Transfer Partners, ConocoPhillips, and Marathon Petroleum, worth roughly £393,000 collectively.A spokesperson for the £4.6bn (€5.4bn) pension scheme said the holdings were made through a pooled fund managed by BlackRock. The LPFA made the decision last year to exit the fund and is gradually redeeming its position. The decision was not linked to the pipeline-related holdings, the spokesperson added.As of the end of December 2016 only the holdings in Energy Transfer Partners bonds were still in the portfolio. The pipeline has faced major protests as campaigners have said its construction will affect a Native American reservation. However, US president Donald Trump, within days of taking power, signed an executive order that eases restrictions put in place by his predecessor Barack Obama.IPE earlier this week reported that Nordic banking group Nordea had divested from Energy Transfer Partners, Sunoco Logistics, and Phillips 66 due in part to the companies’ refusal to engage with the financial group over their activities with the pipeline.The LPFA had an investment worth roughly £39,000 in Phillips 66 at the end of September. This position is also held via the BlackRock fund and stands to be redeemed.Suzanne Dhaliwal, co-director of the activist group UK Tar Sands Network, said: “It is essential that London show global leadership and divest now from the Dakota Access Pipeline to set an example that we cannot continue to fund projects that devastate indigenous rights and push us further into climate chaos.“With Trump and [Canadian prime minister Justin] Trudeau hell bent on pushing forward with tar sands expansion and associated pipelines, our collective action lies in stopping capital flowing from London.”In a statement, the LPFA said: “As a pension fund we have a fiduciary duty to make investments where we see the best return for our stakeholders. Our key aim must be to ensure we can continue to pay pensions as they fall due. However, it is also our objective to use our influence as a large institutional investor to encourage responsible long-term behaviour in the companies in which we invest. We feel that engaging with companies on these issues is more productive than divesting.”Sadiq Khan, the mayor of London, pledged to force through divestment policies during his campaign for the mayor role last year. The previous London mayor, Boris Johnson, rejected similar calls in 2015, despite pressure from local lawmakers.The LPFA is now part of the Local Pensions Partnership with the Lancashire County Pension Fund, in line with the UK government’s policy of pooling the assets of public sector pension schemes.
Some provisions affected limits on investing in external funds: pension funds can hold up to 25% of the shares of an individual UCITS fund, which has not changed from the previous rulebook. However, the limit for “investment funds” was decreased from 25% to 20% of shares. There is also a 20% maximum for other types of fund.Other provisions include:The limit on individual equities has been increased from 15% to 20% of the company’s share capital;UCITS and investment funds are no longer “looked-through”, i.e. underlying assets will not be included in investment limits;The restrictions on counterparty risk are virtually unchanged, but former look-through funds will be seen as a specific counterparty, instead of as underlying assets;The 50% limit on foreign currency exposure in a pension fund’s portfolio is unchanged.The new regulation was not connected with the changes made to rules on foreign investments: all restrictions were largely lifted by the Central Bank of Iceland in March this year.Meanwhile, the new ESG rules related to the pension funds’ investment policy statement. Pension funds were already obliged to include an assessment of returns and risk in the statement, which has to be reviewed each year.Now, however, they must also include a clear ESG benchmark or guideline in the statement, although there was some flexibility as to how this was to be done.Pension funds must also now send an annual report on ESG compliance to Iceland’s Financial Supervisory Authority, along with their investment policy statement.Gunnar Baldvinsson, managing director at Almenni Pension Fund, told IPE: “We regard these changes as positive for pension funds. In addition to modifications to the restrictions, there is a clause about risk management, which is good for the industry.”Balvinsson said any extra work caused by these regulatory changes would be insignificant.He added: “Investment restrictions are similar as before, but are put forward in a new and clearer way. Almenni has already updated its investment policy in accordance with these changes.”Halldór Grétarsson, institutional asset management specialist at Arion Bank Asset Management, said: “The regulation is helpful to pension funds and their asset managers, as it formalises and specifies the role of risk management and risk monitoring. It also focuses on the prudent person principle, rather than setting only numerical limits.”Gretarsson continued: “However, the regulation increases the need for human resources by pension funds and their asset managers, as well as tougher requirements for the risk management set-up and systems. For example, it requires a dedicated risk manager who is independent from the CEO of the fund.”The regulation came into force on 1 July but there is a transitional period to 1 December 2020, by which time pension funds must comply fully with the new investment limits. A new investment regulation for Icelandic pension funds has shifted risk management provisions towards the prudent person principle, rather than simply relying on prescriptive investment limits.It has also introduced new requirements for environmental, social and governance (ESG) related investment reporting.Previously, pension funds were allowed to invest in 11 different asset categories, with limits for each category. Additional restrictions included limits for individual equities and foreign currency exposure, as well as restrictions on counterparty risk, except for government bonds.The new regulation left asset categories largely unchanged, but restrictions have been directed towards groups of similarly risky assets – a form of risk budgeting – instead of individual asset categories.
Swedish national pension fund AP7 made an average loss of 2.8% on its balanced fund Såfa last year – but still beat the average 2.9% loss from private-sector pension providers.In its annual report, AP7 said falling global equity markets had led to negative returns on products that had a high equities weighting.Chief executive Richard Gröttheim said in the report: “No one knows if the year was a minor correction, the beginning of a major decline, or just a staggered journey sideways for some years.”The year’s results compared to a positive return of 14.4% in 2017. On a time-weighted basis, AP7 said Såfa had returned an average 5.9% a year since the fund’s inception in 2000, above the 3.1% average return from the private sector providers in Sweden’s Premium Pension System (PPM) – the defined contribution (DC) part of its state pension provision.AP7 said responsible investment with an emphasis on environmental impact had been particularly important in its activities in 2018.In a statement accompanying the annual report release, the pension fund said: “In 2018 we focused on whether the companies we invest in are engaged in lobbying that prevents the Paris agreement from being translated into national climate legislation.“We will continue this important work in 2019, as companies that oppose climate laws constitute a serious problem.”Having invested during the year in companies that contribute to the UN’s Sustainable Development Goals for fresh water and climate, AP7 said it was continuing to raise its ambitions as a sustainable and responsible investor in 2019.Total assets managed by AP7 rose to SEK460.1bn (€43.6bn) at the end of 2018, from SEK430.7bn a year before. Within this, SEK418.9bn was in its equities fund and SEK41.2bn in the bond fund.The increase in total assets was due, the fund said, to the inflow of contributions during the year.AP7 runs the Såfa fund as the default option in the PPM. The system also includes a platform where Swedes can choose to invest their contributions with any of hundreds of private investment companies. This section is currently undergoing a thorough reform process .Further readingInterview: Mats Langensjö weighs options for Sweden’s giant AP7 The Swedish Finance Ministry has tasked pensions expert Mats Langensjö with devising a new framework for the country’s largest public sector pension fund.Swedish Premium Pension: Lundbergh’s nudge How to formulate evidence-based pension reform proposals in 10 weeks Sweden cuts one third of investment options in system overhaul Roughly SEK9bn will be transferred to the default provider AP7 after Sweden culls a third of the investment funds from the defined contribution section of its state pension system
They said that antimicrobial resistance – resistance to antibacterial, antiviral and other drugs in different types of micro-organisms – was responsible for at least 700,000 deaths globally each year, and cost more than $1.5bn (€1.4bn) in healthcare expenses and productivity losses in the EU.Jeremy Coller, founder of FAIRR and chief investment officer at private equity firm Coller Capital, said: “Our defences against AMR are wearing thinner by the day, and the microbes are getting tougher.“We need urgent global change to combat AMR – and that needs investors in the driving seat.”Citing the work done with FAIRR, he said “money talks”.“Over the last few years our investor coalition has engaged with 20 global restaurant chains who had no plans to reduce antibiotics,” said Coller. “Now all 20 have an antibiotic stewardship policy in place, and the livestock industry has reduced antibiotic use by 40% in five years.” A coalition of public and private sector entities is looking to investors to help stem further growth in antimicrobial resistance (AMR).Investor Year of Action on AMR, as their initiative has been dubbed, was launched in Davos, Switzerland, today, and has as its main objective “to leverage investor influence to make change happen”.It is backed by the UK’s department of health and social care, Access to Medicine Foundation, the Principles for Responsible Investment, and FAIRR, a non-profit organisation working with investors on the topic of intensive animal production.“The financial sector sits at the top of the investment chain and can positively change behaviour if it aligns with international standards and guidelines such as the WHO Global Action Plan on antimicrobial resistance,” the organisers said in a statement.
Danish insurance and pensions provider Topdanmark announced it has hired Andreas Stang to fill its newly-created role of head of responsible investments, luring him away from his current job as head of ESG at Denmark’s largest commercial pension fund PFA.Topdanmark – which is a major occupational pension provider in Denmark but makes more from general insurance – said the hire formed part of its plan to increase its focus on responsible investing.Stang, who has previously worked for Danske Bank as a senior ESG analyst, is due to start his new role on 1 September, the firm said.He said: ”If you are serious about ESG, then it is important that the function is located where you make your investments, and that you are consistent in choosing the right companies, sectors or countries to invest in.” Topdanmark had shown it was ready to engage with sustainability and accountability more broadly and systematically within its investment processes, he added.A spokesman for the company, which is based in the Copenhagen suburb of Ballerup, told IPE that Stang would be joining an existing team of portfolio managers “where ESG responsibility is embedded in the mandates”.The position was new, and the decision to create it was mostly driven by overall expanding activity, he said.Henrik Thornval, director of Topdanmark Asset Management — who has been responsible for ESG up to now — said: “We are experiencing significant customer interest in, as a pensioner, being able to avoid having to live on money earned from investments in companies that destroy the environment, grossly exploit employees and everything else that is being thrown up by ESG analyses.”This February, Topdanmark launched the new pension product Formålspension (Purposeful Pension), which imposes stricter ESG rules on its equity investments than apply overall to the firm’s shareholdings.Looking for IPE’s latest magazine? Read the digital edition here.
This house at 131 Mountjoy Tce, Manly, has spectacular views of the bay and marina.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 three-level home boasts bay and island views, and is just a short walk from the waterfront.Designed to make the most of the vistas, it has open planned living spaces, a “dream kitchen” complete with wine fridge and a large entertaining deck. And what has been described as a “dream kitchen”.On the middle floor, there is three bedrooms including a master with water views, a large walk-in robe and ensuite with freestanding tub.On the lower level, there is another bedroom with an ensuite, an extra living area and a three-car garage. Outside, there is a resort-style pool. But it is its location that is expected to really draw in the crowds. It is just five minutes to The Esplanade and waterfront, and “a few steps” to the Cambridge Parade cafe precinct and The Manly Harbour Village. The showpiece home is being marketed by Marc Sorrentino of Place Manly, and will go under the hammer at 10am this Saturday.“There has been a lot of interest from both local and interstate buyers,” Mr Sorrentino said. “We have had 30 groups and I am expecting a big crowd on Saturday.”Another one to watch this weekend is 29 Robe St at Newmarket, which is on the market for the first time in 28 years.Situated on a hill, the four bedroom, two bathroom home needs some love and updating but is otherwise reno or rental ready. The 19 Mawson St home is expected to sell on SaturdayFreedom Property agent Tomas Mian said the current owners were selling due to a change of circumstances, and were motivated to sell. “We have had about 110 groups through over the past four weeks, multiple offers but it will go to auction and we are expecting the property to sell,” he said.“We are expecting a big crowd.”And the terracotta warrior statues? Mr Mian said they were craned in and were a “package deal”.The impressive house is just one of a number of homes up for grabs, with a mixed bag of luxury residences and zombie houses to go under the hammer this weekend. Speaking of luxury, check out the views from 131 Mountjoy Terrace at Manly. There is expected to be quite a bit of interest in 29 Robe St, Newmarket, which is on the market for the first time in 28 years.Ray White — West End agent Matt Sale said the house had been rented for the most part of three decades, with the owners spending “maybe four nights in the whole 28 years”.“They have been living the dream travelling around in their motorhome for more than 15 years,” he said.“And when they weren’t travelling they were living at Chinchilla. They are definitely country folk.“They are now selling the house to buy in Toowoomba.”It sits on a fully fenced 506sq m block, and also comes with a large living area, a side deck, a huge storage space underneath and is just a short walk to the bus stop or Newmarket train station.Newmarket has seen a 28.3 per cent increase in median house sales prices over the past five years, and the house is expected to draw in buyers.Mr Sale said have had about 30 groups through the house so far, and had six pre-registered bidders. “It is a big block and the house is one of only two that aren’t in the character precinct,” he said.“Subject to council approval, the buyer could knock it down and build their dream home>’The house will go under the hammer at 11am on Saturday. Two terracotta warriors come with this house at 19 Mawson St, KedronTHIS house comes with the lot, including two life-size Terracotta warrior statues to guard over their new owners. You can see one of the terracotta warriors looking out over the pool.The architecturally-designed home at 19 Mawson St at Kedron will go under the hammer on Saturday at 10am, and comes with a range of features suited to an owner who does not want to lift a finger.The six bedroom, three bathroom house sits on a 765sq m block, and comes with high ceilings and open plan interiors, a lounge/family room with built-in surround sound speakers and outdoor access via bi-fold doors, a gourmet kitchen fit for a MasterChef, two dining rooms, a covered patio with retractable fly screens overlooking the pool, a rumpus room, a large home office, and much more.