The transaction adds to PIC’s written business in 2014. The company currently dominates the UK bulk annuity market, writing more than half of all business in 2013.The trustee board and the sponsor, FreemantleMedia, were both advised by KPMG.In other news, figures from the Pension Protection Fund (PPF) showed the aggregate deficit for 6,150 UK defined benefit (DB) schemes remained relatively stable over April.However, the figures – calculated via s179, which estimates the deficit of schemes on a PPF-level benefits basis – officially show an increase in the deficit from £70bn to £112.3bn, after a change in the assumptions used in s179.The fund recently reduced the effective yield used in the discount rate, and updated mortality assumptions, fuelling the deficit rise.Over April, the schemes witnessed asset increases of £6.3bn, as the total level hit £1.15trn.Liabilities increased by £48.7bn to £1.26trn, with deficit levels reaching £112.3bn.The fund stressed that the rise in liabilities was purely down to the assumptions within s179, and that, when using the now outdated calculation, deficits only rose by £1bn.Funding ratios among the 6,150 schemes averaged at 91.1%. The Freemantle Group Pension Plan has completed a £47m (€57m) buy-in insurance arrangement with Pension Insurance Corporation (PIC).The deal covers liabilities for some pensioners and deferred members for the scheme, whose sponsor is known for popular British reality shows The X Factor and The Apprentice.Chairwoman of the trustee board, Sarah Tingay, said PIC’s selection as insurer was based on its price and the offer of a structure that met the needs of the sponsor.“A transaction of this nature is never easy to put together,” she said, “but, with advice from KPMG and a flexible and proactive attitude from PIC, we were able to secure our members’ benefits for the long term.”
“The contribution over the past six years totals almost SEK8bn, which can be viewed in the context of an annual cost of about SEK90m to conduct active management,” he said.Overall, AP4 said its management costs remained low, with the management cost ratio including commission expenses at 0.11% last year, the same as the year before.In absolute terms, management expenses had totalled SEK296m, up from SEK277m. The emphasis on performance, and outperformance, comes amid continued uncertainty about the future of the existing buffer funds, which the previous Swedish government agreed should be reduced in number from five to three. Net profit was SEK40bn in 2014, up from SEK37bn the year before, and fund capital rose to SEK295bn by the end of December from SEK260bn.Andersson said AP4 had increased its holdings in low-carbon investments in 2014, and added that the pension fund wanted to increase strategic investments with a horizon longer than three years.The buffer fund paid out a net SEK5.1bn last year into the national pension system, down from SEK6.9bn the year before, it said.To see how other pension funds have fared over the course of 2014, see IPE’s coverage of pension scheme returns Sweden’s AP4 praised its approach to active management for generating a benchmark outperformance worth SEK1.4bn (€147m) last year, while only costing the fund around SEK90m to implement. Presenting its 2014 annual report, the buffer fund said it made an annual total return of 15.7% after expenses, down slightly from 2013’s 16.4%, but nevertheless outperforming its fellow buffer funds. AP4 said active management meant it outperformed the benchmark index by 0.7 percentage points before expenses, compared to 0.5 percentage points the year before, giving a positive contribution to earnings of SEK1.4bn — up from SEK900m in 2013.Mats Andersson, the pension fund’s chief executive, said: “We are very pleased that AP4’s talented managers have outperformed the index for the twelfth consecutive half-year.
The chair of Dutch communications watchdog AFM has admitted she struggled with the complexity of pension value transfers when moving to the regulator last year.Upon moving from her previous employer – the Dutch Railways (NS), where she had been a board member – to the AFM, Merel van Vroonhoven said she had been considering a transfer of her pension rights between the railways pension fund SPF and the AFM scheme.However, as the information provided by both pension funds was too complex, she ultimately decided not to act at all, she said during the annual symposium of the pensions magazine PBM, last Thursday.In 2013, Job Swank, a board member of regulator De Nederlandsche Bank (DNB) conceded that he had difficulties comprehending his own universal pensions statement (UPO). According to Swank, who is also a professor of economic policy at Rotterdam’s Erasmus University, the Dutch pensions system had become far too complicated.In Van Vroonhoven’s opinion, despite new legislation on pensions communication, the biggest challenge for pension funds was still to get people in their twenties and thirties thinking about an additional pension, and actually start saving for it.“The new Pension Communication Act isn’t a cure against all illnesses,” she stressed, adding that participants were “insufficiently using the already available digital channels”.Van Vroonhoven said that the AFM was currently looking into how the pensions industry can digitally increase interest in pensions, and how participants could be taught to take steps themselves, “as this is a good way to keep their interest alive”.The AFM chair indicated that the regulator was also scrutinising how transparent pension funds were about the risks to participants future purchasing power. “We want to know whether the effect of non-indexation is properly explicable.”She further said that her biggest worry was that all risks were gradually shifted to participants without them being aware of it.The new Pensions Communication Act, with its options for a tailor-made approach as well as picturing scenarios, could help to prevent this from happening.Referring to the nation-wide debate about a new and sustainable pensions system, she reiterated that the AFM favoured fewer mandatory elements.Increased freedom of choice should, for example, apply to the contribution level, but not allow people to choose their pension fund or to invest individually, she pointed out.
Bayerische Versorgungskammer, BVI, DVFA, Willis Towers Watson, Vivat, THEAM, Bouwinvest, Kames Capital, Barnett WaddinghamBayerische Versorgungskammer – Reinhold Weger has been named head of fixed income at the €65bn pension fund, Germany’s largest. Weger, in charge of the fund’s equity investments, succeeds Constantin Echter, who is set to join insurer Münchener Verein as head of asset management.BVI – Tobias Pross has been elected president of the German Investment Funds Association and will succeed Holger Naumann, a member of the board of Deutsche Asset Management, from the beginning of next month. Pross, who has been part of BVI’s management board since 2011, is head of EMEA at Allianz Global Investors.DVFA – Stefan Bielmeier has been re-elected managing director of the German association of investment consultants. Currently chief economist at DZ Bank, he joined the association’s board in 2010 and was first elected managing director in 2012. Willis Tower Watson – Rolf Kooijman has joined the board of the Towers Watson PPI, succeeding Jan Kloet, who is to retire. During the past two years, Kooijman – a professional supervisor – has taken a sabbatical. Between 2009 and 2013, he was CFO and a member of the management board at custodian KAS Bank. He has also been financial director at insurer Delta Lloyd.Vivat – Dutch insurer Vivat has appointed Hans Visser as general manager for pensions. He will be responsible for pensions at Vivat’s subsidiary Zwitserleven, succeeding Seada van den Herik, who stepped down in October. Visser joins from Vanbreda Risk & Benefits, where he was commercial director.THEAM – The BNP Paribas Investment Partners subsidiary specialising in capital-protected, indexed and model-driven management has appointed Isabelle Bourcier as head of ETF and indexed fund activities. Between February 2011 and November 2015, she was head of business development at Ossiam, a subsidiary of Natixis Global Asset Management specialising in smart-beta ETFs. Bouwinvest – Frank Nijs has been tasked with acquisition at the new Healthcare Fund of Dutch property manager Bouwinvest. Nijs joins from Heeren Loo Zorggroep, where has been project developer responsible for portfolio management. Before then, he worked at the project development companies Kristal and Heijmans.Kames Capital – David Ennett has been appointed to the high-yield team. He joins from Standard Life Investments, where he was head of European high yield.Barnett Waddingham – Andy Greig, Simon Rusling and Stuart Harrison have been appointed partners at the UK consultancy.
A group of 67 Dutch professors has urged the €409bn civil service scheme ABP to support a resolution at Royal Dutch Shell’s annual general meeting in May to make the energy firm carbon-free by 2050.In a letter, published by Dutch daily newspaper NRC, the signatories argued that Shell’s promise last November to halve the carbon footprint of its products by 2050 was insufficient to meet the climate targets of the Paris agreement.In the opinion of the professors – who formed part of an association of private green-minded shareholders, named Follow This – Shell could become carbon-free by investing its profits in sustainable energy rather than in oil exploration.The professors said they wanted their pension contributions to be deployed to turn Shell into a sustainable firm. They said the only alternative for ABP was to divest from Shell – an approach being advocated by NL Fossil Free, another Dutch pressure group.Many of the signatories to the letter were conducting research on climate, ecology and geophysics. They included Fieke van der Lecq, professor of pension markets at Amsterdam’s Free University and Herman Wijffels, professor of sustainability and social change at Utrecht University.Wijffels is also co-founder of the Sustainable Finance Lab, former executive chairman of Rabobank and former chair of the Social and Economic Council.In the past, ABP has voted against resolutions tabled by Follow This. In 2017, it opposed the group’s call on Shell to set CO2 emission targets that would keep global warming considerably lower than two degrees Celsius.At the AGM, just 6.3% of shareholders supported the resolution, although supporters included large Dutch asset managers, such as MN, Achmea IM, Actiam and Van Lanschot Kempen.At the time, ABP said it opposed the resolution as it also involved emissions as a result of the use of fossil fuels sold by Shell, so-called “scope three” emissions. ABP agreed with Shell that the oil giant could not be held responsible for these emissions.However, Shell later announced that it would halve its emissions, including those from its products.In 2016, ABP also opposed a resolution from Follow This, arguing that shareholders should not step into the board’s shoes. However, according to the professors, this problem could be solved by requesting the board to set goals.
Varma has become the first Finnish pension provider to sign up to the international Tobacco-Free Finance Pledge.The company, one of Finland’s top two pension insurers with €44bn in total assets, said that it had signed up to the United Nations-backed project along with Finnish retail bank S-Bank.The new signatories mean 107 entities have now backed the international project since it was launched in September 2018. European investors including AP4, FRR and Church Commissioners for England signed up at its launch.The Tobacco-Free Finance Pledge aims to raise awareness among financial institutions of the “essential” role they play in promoting anti-tobacco policies in the sector. Varma’s director of responsible investment Hanna Kaskela said tobacco also exacerbated poverty.“There is very little anti-tobacco regulation in developing countries,” she said. “Low-income consumers in developing countries spend a significant proportion of their meagre income on cigarettes, on top of which they suffer tobacco-related illnesses.”Companies signed up to the pledge promise to take on tobacco-free finance policies such as building knowledge and understanding around the dangers of tobacco, and reducing investment in the industry.Rachel Melsom, director of Tobacco-Free Finance in the UK and Europe, said the addition of Varma and S-Bank brought the total assets under management represented by the signatories to more than €8.3trn.This showed tobacco-free finance was becoming increasingly common and important worldwide, she added.Other European asset owners have been divesting from tobacco stocks in recent months, including Sweden’s AP1 and ABP in the Netherlands.
Clifton Suspension Bridge in Bristol, England, where Brunel Pension Partnership is based‘Impact investor buzzword’Brunel emphasised in its announcement that the Neuberger fund represented “excellent investment opportunities”. The investment was not made to fulfil a specific impact mandate.Other asset owners have also made commitments “impact” funds, but have been reticent to label themselves impact investors.Sweden’s AP1, for example, has invested in a private equity fund committed to the SDGs and in a BlackRock Emerging Markets Impact fund, but does not see itself as an impact investor – referring instead to “dedicated sustainable investments”.“This is a softer, or broader, definition than impact investing, which we are not, cannot be and do not want to be,” Mikael Angberg, CIO at AP1, recently told IPE. “The buzzword ‘impact investor’ risks becoming very binary.”UK defined contribution fund NEST previously told IPE that impact was at the centre of every asset class decision and fund manager selection it made, but that it shied away from referring to impact investments due to apprehension about watering down the term ‘impact’.In recent years mainstream institutional investors have become more interested in the environmental and social impacts, or outcomes, of investment activity. This development has been welcomed, but has also triggered a close guarding of the term and practice of ‘impact investing’. The Global Impact Investing Network and the International Finance Corporation have both taken steps to grow impact investing while addressing concerns about “impact washing”.For more about impact investing, see IPE’s special report out this month Brunel Pension Partnership has made a cornerstone $60m (€54m) commitment to a private equity impact fund on behalf of four of its UK local government pension scheme (LGPS) clients.The £30bn (€35bn) LGPS pool said it had obtained attractive terms from the manager – Neuberger Berman – for its clients’ commitments and had also negotiated terms on behalf of the entire £263bn local authority pension system, “should any other individual funds or pools wish to commit before final close”.Richard Fanshawe, head of private markets at Brunel, said the Neuberger Berman Private Equity Impact Fund was “ground breaking in seeking attractive financial returns in lockstep with positive social and environmental impact, having identified investable themes that can map to 15 of the 17 UN Sustainable Development Goals (SDGs)”.According to Brunel, Neuberger Berman was targeting a high proportion of direct co-investments into underlying companies, “complemented by select investments in specialist impact primary funds that Brunel would be unlikely to access alone”. Source: Brunel Pension PartnershipRichard Fanshawe, head of private markets, Brunel Pension PartnershipFanshawe said greenwashing – or “SDG-washing” – had become prevalent, making it more difficult to find “authentic” sustainable investments.The LGPS pool emphasised the importance of having a due diligence process “that digs deeper into non-financial data and reporting”, as it was “essential… to ensure our clients’ capital does not get diverted into greenwashing strategies purporting to be impactful but with very little substance”.The pension partnership said it was impressed by Neuberger Berman because of its approach to impact screening as an additional filter for investment opportunities that had already met the manager’s financial screening criteria.“We believe this not only improves overall risk consideration but hones in on the tangible impact these companies can have and allows the manager to track relevant reporting key performance indicators to prove their thesis using the Sustainability Accounting Standards Board framework,” said Fanshawe. It said Neuberger would aim to encourage private equity managers to make integration of environmental, social and corporate governance (ESG) considerations a formal part of their process and support specialist impact managers to achieve scale. Digging deep
“The demand for fossil fuels, including oil, will decrease as the green transition accelerates”Anders Schelde, MP PensionThe pension fund said it had been collecting data on the firms’ contribution to the green transition and found that BP, Royal Dutch Shell, Total and Equinor were taking steps towards transitioning towards a low-carbon economy. The other six had no – or very limited – initiatives to support the transition to a low-carbon economy.Schelde said the fund hoped these companies would increase their efforts to become more environmentally friendly.He added: “When they have done so, we would very much like to invest in the same companies once again – but it requires a significant change in all 10 companies.”MP Pension’s board of directors pledged in 2018 to dump all shares in coal, tar sands and oil activities by the end of 2020, and excluded all coal and tar sands companies from its investments last year.It then carried out work to assess whether it considered that the largest oil companies had adapted their long-term business models and strategies to the objectives of the Paris Agreement – an exercise that led to yesterday’s divestment announcement.The fund said it would assess more than 1,000 companies by the end of 2020, but had initially focused on the 10 largest firms.MP Pension’s members voted at its latest AGM for the fund to divest from bonds issued by fossil fuel companies.As a result of this, the fund said it was in the process of preparing an impact assessment of the sale. It currently holds DKK168m issued by two of the companies already analysed, Rosneft and Petrobas.In July, Danish labour-market pension fund PenSam blacklisted 26 oil companies , selling off shares with a total value of DKK130m, but had chosen to remain invested in Royal Dutch Shell and BP. The fund told IPE these firms had increased their openness on how they planned to reach clear green targets. The Danish pension fund for academics, MP Pension, has blacklisted 10 of the world’s largest oil firms, a decision that will mean divesting DKK644m (€86m) of stocks.In addition, the pension fund is considering the impact of divesting from bonds issued by oil firms.The fund said it wanted to take responsibility for the green transition while securing long-term investment returns.Anders Schelde, CIO of MP Pension, said: “We do not believe that this sector can deliver a return on a par with the rest of the market in the coming years. “The demand for fossil fuels, including oil, will decrease as the green transition accelerates.”The 10 companies are ExxonMobil, BP, Chevron, PetroChina, Rosneft, Royal Dutch Shell, Sinopec, Total, Petrobras and Equinor.“The total market capitalisation of these 10 companies exceeds DKK9.2trn,” Schelde said. “MP’s shareholding in the 10 companies amounts to DKK644m, which corresponds to two thirds of all of MP’s equity investments in oil.”
AXA Investment Management has named the leadership team for core investments, a new division that was created last year as part of an overhaul of the asset manager’s corporate structure.Core investments is one of the four “pillars” into which the business was reorganised, and combines AXA IM’s fixed income, multi-asset and active equity (the Framlington Equities platform) strategies.According to the €730bn asset manager, the appointments in the core investment leadership team will “accelerate collaboration and innovation” between the strategies, as well as further embed research and quantitative insights into portfolio decisions.They see Chris Iggo, chief investment officer for the fixed income platform since 2008, taking on additional responsibility in the newly created role of CIO for core investments. Marion Le Morhedec has been appointed head of active fixed income for Europe and Asia, a role that Iggo carried out on top of being fixed income CIO. Le Morhedec had been head of products specialists and solutions for the core investments platform since February 2019, and before that head of business development and client relationships for fixed income. Chris Iggo, newly appointed CIO for core investments at AXA IMSerge Pizem, previously global head of the multi-assets investments team, has been named head of multi-asset, while Laurent Clavel, formerly head of research at AXA IM, has been appointed head of the firm’s “Quant Lab”, a unit that pre-dates the corporate reorganisation. Hans Stoter, who was named global head of core investments at AXA IM in December, said: “I am convinced that this new leadership team will result in increased collaboration, lead to better performance and engender a true transformation in the way we manage portfolios.”DWS adds ESG criteria to money market fundsDWS today said it would apply environmental, social and corporate governance (ESG) criteria to money market funds managed in the EMEA region.According to the asset manager, the criteria include a set of sector exclusions, screens based on norms, and best-in-class rankings, but “no changes in the portfolio allocations were necessary as the ESG quality was already high”.Harm Carstens, co-head of short duration portfolio management for EMEA at DWS, said: “The ESG money market funds universe is still at an early stage and we are pleased to announce these latest advancements. DWS ESG money market funds aim to cater to investors’ increasing demands for sustainable investment vehicles in the money market space.”DWS said that it last year launched the first money market fund available in the US to apply ESG criteria.In Europe, BlackRock launched a “Liquid Environmentally Aware Fund” in July. Moody’s said it was the first money market fund in Europe to apply environmental and other characteristics, including social and governance factors, when selecting the funds’ investments.“Investors in money market funds in Europe are showing a strong interest in sustainable investment that will over time pressure all short-term debt issuers to improve adherence to ESG principles, or face difficulties placing their debt,” said the credit rating agency.
Danish labour-market pension fund Sampension has won another workplace pensions deal which will boost its assets total by around DKK630m (€84m), as the provider continues its drive to woo new business.The contract, which covers 640 salaried staff of accident insurance firm If Skadeforsikring, was awarded at the end of tender process attracting several pension providers – including the insurer’s current pensions partner Danica Pension.Though relatively small, the contract adds to recent business gains for the DKK262bn north Copenhagen-based pension fund, which announced two months ago it was taking over the pension provision for around 11,000 part-time Danish military pension scheme members from its rival Nordea.Hasse Jørgensen, Sampension’s chief executive officer, said of the latest win: “It is really positive that If Skadeforsikring has chosen to come on board after the turn of the year, and we look forward to introducing them to our service concept with information meetings and personal advice.” Economic value creation was absolutely central, he said, but added that his company was also equally focused on providing high advisory and service value.The agreement with If Skadeforsikring involves annual contributions of DKK63m and will see total savings of about 10 times that amount transferred to Sampension, company spokesman Søren Espersen told IPE.In addition to If Skadeforsikring, Sampension said other companies including GK Nordic and Sparekassen Kronjylland, had also joined it recently.Since 1 January 2017, Espersen said Sampension had added more than DKK40bn in pension funds more under management, with customer deposits having risen by 30%.He said Sampension participates in pension offerings in the corporate market to win, and always delivers its strongest bid.“However, we enter into tenders with a lower price limit, which we do not go below,” he said, adding that things needed to add up.“It is really very simple – growth is only sustainable when the pension company does not build up systematic losses that other customers are otherwise at risk of taking on.”However, one of Sampension’s larger customers – Danish IT provider KMD – has now put its pensions contract out to tender, he confirmed. KMD has almost 3,500 staff mostly in Denmark, with some in Poland and India.Danica Pension – the company’s current pension provider – did participate in the If Skadeforsikring tender, which was handled by the broker Skinnerup Consulting.Asked to comment about this business passing to Sampension, Danica Pension’s chief operating officer Søren Lockwood said that in the past year, the focus of the Danske Bank pensions subsidiary had been on welcoming its 200,000 new customers from SEB Pension in Denmark, which has been a huge task.“The integration of 250,000 policies is now complete, and the result is a stronger, larger and more focused Danica Pension, ready to attract new customers in the coming period,” he said.“We are participating in more pension offers than a year ago and we are winning more,” Lockwood said.