Garanti Pension and Life, the largest pension insurance company in Turkey in terms of the number of pension savers, is planning to launch new funds investing in commodities and international equities.Cemal Onaran, managing director at the TRY4.6bn (€1.3bn) firm, told IPE the new funds would be launched within the next four years.“Our foreign stock market investment fund will most likely invest in both developed markets such as the US and Germany, as well as in emerging markets like Brazil, China and Russia,” he said.“This will respond to the need for alternative investment vehicles, provide tool for diversification away from the domestic risks and vulnerabilities.” Most pension fund assets in Turkey are at present invested in T-bills and Turkish government bonds (59.83%), which lost 0.32% last year.The remainder of pension portfolios are invested in other investment vehicles (17.97%), stocks (12.87%), reverse repos (7.08%), foreign securities (1.24%) and money markets (1.01%), according to Turkey’s financial regulator (SPK).Turkish private pension investments pulled in an average total return of -0.76% last year.Onaran believes that, although Turkish investors still strongly prefer fixed income investments, equities will be the most rewarding instrument for pension funds in the long term.Garanti Pension has some 813,000 customers at present.“Until 2008,” Onaran said, “interest rates in Turkey were quite high, at around 25%, so the optimal strategy was to invest in money market or government bond funds.“From 2008 on, however, interest rates fell down to 7-8%, and investors started to demand higher returns.“This, as well as growing knowledge and experience on financial markets, is increasing interest in alternative investment vehicles such as foreign equity funds.”Garanti Pension is also planning to grow its overall exposure to equities, where it currently has some 13.5% of its assets.In addition, some 68.8% of Garanti Pension’s assets are invested in local fixed income, 9.8% in reverse repos and 7.9% in time deposits, foreign exchange fixed income instruments and commodities.“Already now, we allocate more funds to equities than the average firm in the market,” Onaran said.“We are planning to increase our equity exposure further, up to 15% of all assets in 2-3 years, and to 20% in the long run.“We will gradually increase the average equity ratio within our flexible and equity funds as the market prices test reasonably low levels.”
France’s €36.3bn national pension reserve fund is looking to invest some €600m in French private debt and has launched a procurement process for up to six mandates in connection with the creation and management of dedicated funds.The call for tender is split into two, with up to three mandates up for grabs in relation to each of the debt categories. A FRR spokesperson told IPE that each mandate would correspond to one dedicated fund, and that the €600m could be split across mandates in any number of ways. The first set of mandates is for private placements, with the Fonds de réserve pour les retraites (FRR) noting that it could provide financing to companies in the small to medium and intermediate size categories via private placements in the form of debt or loan instruments. The second is for the purchase of acquisition-related debt of companies also in that size bracket – “these transactions have the primary objective of financing and refinancing an acquisition or financing a merger or acquisition”, said FRR. French regulation specifies different types of companies by size, adding ETI for entreprises de taille intermédiaire (intermediate-sized enterprises) to the SME category – petit et moyenne entreprises (PME) – more familiar in the Anglo-Saxon world. Each mandate to be awarded by FRR would be for 12 years, with the possibility of two one-year extensions.Interested investment managers have until noon on 17 June to apply.The procurement process is part of the implementation of a new €2bn allocation to French illiquid assets, according to the FRR spokesperson. She confirmed that the new mandates would not represent FRR’s first foray into private debt, as it is already an investor in the Novo SME direct-lending funds launched in 2013 by the Caisse des Dépôts et Consignations and several French institutional investors, and also invests in private debt via five other funds. These can involve allocations to foreign private debt of up to 50%, while the Novo funds and the freshly tendered-out mandates are exclusively for French debt.
The cost of outsourcing private equity investment is so high for pension funds that their net returns on the asset class are generally lower than they are for their small-cap investments, according to CEM Benchmarking.CEM principal Mike Heale, speaking at an event organised by IPE sister publication Pensioen Pro, questioned whether pension funds generated sufficient returns for the costs involved, and cited the challenge of finding a proper benchmark.“Sometimes, pension funds take a return of 10%, or the LIBOR rate plus 4%, as a guidance, but these numbers are very bad indicators,” he said. Heale said CEM’s calculations had shown that pension funds that invest in private equity through funds of funds had incurred more than 5.5 percentage points in costs over the last 20 years relative to schemes that manage private equity in-house. He also claimed that pension funds that participate in private equity as limited partners on average incurred 3.24 percentage points in additional expenses.According to CEM, only pension funds that invest directly in private equity – as some Canadian schemes do – have managed to achieve an outperformance – of 2.4 percentage points – resulting in a net return of almost 15%.This approach is similar to the investment policies at APG and PGGM – asset managers for the €380bn Dutch civil service scheme ABP and the €179bn healthcare pension fund PFZW, respectively – which look to manage non-listed equity in-house to avoid the cost of external managers.CEM’s analysis also found a correlation between a scheme’s scale and returns on private equity.It found that schemes with assets of more than $100bn (€91.1bn) achieved 16 basis points of additional returns relative to smaller pension funds.CEM said its survey into the costs and returns of private equity was based on information collected from all of the 367 pension funds in its database.More than 30 Dutch pension funds – representing more than two-thirds of pension assets in the Netherlands – use the services of the Canadian firm.Their asset-management costs were 58.5 basis points on average.
Three of the Netherlands’ largest pension managers are likely to participate in a class action lawsuit against German car maker Volkswagen related to the 2015 emissions scandal.In addition to the €470bn Dutch asset manager APG and the €27bn ABN Amro Pensioenfonds, the €215bn Dutch asset manager PGGM is also likely to join the lawsuit, according to Pensioen Pro, IPE’s Dutch sister publication.Pensioen Pro reported that it was not yet clear whether metal industry schemes PMT and PME had also joined this action, or had opted for another case against the German car manufacturer.Last week, the giant litigation case – in which approximately 3,500 investors claim damages as a result of their stake in Volkswagen (VW) dropping by one-third – started at the court of justice in Braunschweig. Both APG and the ABN Amro pension fund have confirmed that they are among the participants of the class action, which also targets VW’s subsidiary Porsche.In their annual reports PMT and PME both mentioned “legal procedures because of the emissions scandal of diesel cars”.Other Dutch pension funds and providers declined to state whether they were among the litigants.’However, it is likely that PGGM has also joined the class action. In its most recent sustainability report, it cited a “German legal action against VW and Porsche because of ‘dieselgate’”.Andreas Tilp, of German law firm Tilp Litigation, also declined to provide further details to Pensioen Pro. In 2016 he told Dutch financial newspaper FD that he was representing 30 large Dutch players.MN, the €130bn asset manager for both metal schemes, declined to confirm whether it would take part in the litigation case that started last week.Despite the emissions scandal, the large Dutch civil service scheme ABP, healthcare pension fund PFZW and PME have remained invested in VW, keeping both equity and bond holdings.The €72bn PMT has since divested its entire stake in the car maker, however. A spokeswoman explained that the decision was not related to the current class action, but to the fact that VW no longer matched PMT’s investment criteria.She said a screening had revealed that it was among the 10% of companies with the lowest ESG score.Approximately 1,000 institutional investors are claiming billions of euros in damages in total from Volkswagen.In 2016, Norway’s €853bn sovereign wealth fund filed a suit claiming roughly €2bn in damages. It was represented by Quinn Emanuel Urquhart & Sullivan and backed by US pension fund CalSTRS among others.The €21bn Greater Manchester Pension Fund, the UK’s largest local authority scheme, joined a class action suit financed by Bentham in 2016, while in the same year the German state pension funds of Bavaria and Hesse filed suits claiming losses of €700,000 and €3.9m, respectively.The German court of justice, which will only examine the liability question, is to reconvene at the end of November.
Dutch employer organisations want the government to enable workers in hard manual jobs to be able to claim the state pension (AOW) early without a penalty.In a letter published in financial daily FD, Hans de Boer, chair of VNO-NCW, and Marc Calon, chair of LTO Nederland, suggested that the government should also refrain from charging AOW contributions during the period of early retirement.Jacco Vonhof, chairman of MKB Nederland, supported the proposal in a separate interview with daily De Telegraaf.The retirement age for the AOW is currently 66 years and four months. The government has already decided that the AOW age is to rise to 67 years and three months in 2022. The employer chairs said their proposal was meant to entice trade unions back to the negotiation table to discuss pension system reform, after talks between the social partners and the government collapsed at the end of last year.They were angered by the unions’ announcement of industrial action on 18 March – two days ahead of provincial elections – arguing that strikes would hit employers rather than the government.“The unions are not only barking up the wrong tree, but are also putting the saw into it,” argued the employers. However, they didn’t dispute raising the retirement age.In the past, methods for agreeing a definition of hard physical jobs failed as the issue was deemed too complicated by the government.However, De Boer argued that the Austrian government had shown it was possible by using ‘calories burned’ as a criterion.He said the country had also made a list of jobs subject to the option of early retirement. The arrangements didn’t automatically apply to people who did predominantly administrative work.The Austrian list also included irregular night shifts, work conducted in overly hot or cold conditions, work exposed to chemicals and work with severely disabled people.Unions respondResponding to the employers’ proposal, Tuur Elzinga, trustee at the largest union FNV, said that it was only willing to resume talks if the AOW age was fixed at 66.Therefore, the employers should target its proposals at the government instead, he said.Elzinga highlighted the difficulties in compiling a list of hard manual jobs, arguing that, for example, similar efforts in Belgium hadn’t succeeded. Credit: Mark PrinsWouter Koolmees, minister for social affairsWouter Koolmees, minister of social affairs, described the employers’ proposals as “interesting”, while highlighting the importance of a joint approach by the parties involved.Last year, Koolmees said that a solution for workers in hard physical jobs shouldn’t be sought in a definition “as the subject can’t be properly demarcated and would be unmanageable as well as difficult to implement as a consequence”.
Oliver Morley, CEO, PPFIt had a funding surplus of £6.8bn (€7.9bn) as of 31 March 2018, according to its most recent annual report.The fund’s five priorities for 2019-22 are: maintaining sustainable funding “in volatile times”; building for innovation; providing “brilliant service” to schemes and scheme members; providing value for money; and achieving “the best of financial and public services culture”.The PPF collects a levy each year from eligible DB funds. Its estimated bill to schemes for 2019-20 was £500m, while its modelling indicated “an overall downward trajectory for the levy in the long term”.Morley succeeded Alan Rubenstein as PPF chief executive last year. Debenhams schemes not in PPF despite administrationThe PPF this week moved to reassure members of UK high street store chain Debenhams’ pension scheme after it was placed into administration. “The PPF will remain prudent and maintain its current funding strategy and low risk investment approach over the course of the strategic plan to ensure there will be sufficient revenue and reserves to take on large schemes with significant deficits without risk to members,” the organisation said. Credit: PhilafrenzyA Debenhams store in LondonThe group’s operating subsidiaries have continued to trade after they were transferred to a new holding company owned by creditors, meaning Debenhams’ DB pension schemes have not entered the lifeboat fund’s assessment period.A PPF spokesperson said: “We have been advised of Debenhams PLC’s administration and are aware that the two associated pension schemes have not been affected and will continue to operate as normal. Members can be assured that the PPF is there to protect them if needed.”Debenhams’ schemes had assets worth £1.1bn at the end of September 2018, according to the company’s most recent accounts, and a funding surplus of £156m.Alex Hutton-Mills, managing director at sponsor covenant adviser Lincoln Pensions, said: “This is a very good example of where the trustee board has worked collaboratively alongside the Pensions Regulator, the PPF and the sponsor to ensure members’ interests have been protected on what is a very unfortunate day for the retail sector.”‘Significant minority’ of firms support CDCRoughly 13% of pension trustees and sponsors say their organisations will adopt collective defined contribution (CDC) schemes after the UK government confirmed its intention to legislate for new pension model last month, according to Willis Towers Watson (WTW). The consultancy giant polled 70 companies and reported that “a significant minority” said it was ‘likely’ or ‘very likely’ that they would bring in CDC benefits by 2025.The majority of respondents offered an individual defined contribution (DC) plan, WTW said, but two thirds said they would “prefer to offer a pension providing a regular income throughout retirement”, as offered by CDC arrangements.Roughly a third of participants (34%) said members would “struggle to understand the nature and variability” of CDC schemes, WTW said.Simon Eagle, senior director in WTW’s retirement business, said: “New things usually take time to catch on. While only a minority of organisations are expecting to be part of the first wave of CDC benefit provision, our data shows that most organisations would like to provide their employees with a regular income in retirement rather than a flexible pensions pot. This suggests there may be further appetite for CDC provision in the longer term.”DB funding level falls over Q1UK private sector DB funds were 97.4% funded on aggregate at the end of the first quarter of 2019, according to the PPF.The lifeboat fund’s monthly 7800 Index of DB funding levels showed that combined assets rose to £1,649bn at the end of March, up from £1,603bn a month earlier.However, total liabilities climbed from £1,612bn to £1,693bn in the same period, increasing the aggregate deficit to £44bn.Aggregate deficit of UK defined benefit pension schemes, 2016-19 (£bn)Chart MakerOver the course of the first quarter the 7800 Index showed a 5% increase in total assets but a 5.6% increase in combined liabilities.Andy Tunningley, head of UK strategic clients at BlackRock, said: “In general, pension schemes appear to have withstood most of the surprise equity market falls in the latter months of 2018 and equity markets have retraced most of those losses over the first quarter.“This is mirrored in other asset classes such as global credit, high yield and emerging market debt. With yields falling 60 basis points over the last six months, increasing liability values by over 10%, those schemes with liability-driven investment strategies in place will have come through the period largely unscathed and can sail on to self-sufficiency.” The UK’s Pension Protection Fund (PPF) wants to become a standard-setter for innovation over the next three years, according to its new business plan published this week.The lifeboat fund for defined benefit (DB) schemes set out five priorities for the next three years in its first business strategy plan under its new CEO Oliver Morley.Morley said: “Over the course of this strategic plan, we will be setting standards for innovation, assurance and service at the PPF. We will do this by adopting innovative approaches to our business operations including moving to cloud based technology and the development of digital technologies so we can respond quickly and efficiently to the environment in which we operate.”The fund said it would seek to develop “innovative digital services and explore future technical developments” while also maintaining its investment approach to ensure it has sufficient reserves to meet future claims.
Elena Manola-Bonthond, CIO of CERN pension fund“As a global investor, having agreed standards facilitates our due diligence and raises the quality of manager practices for the benefit of all market participants.”Mario Therrien, chair of the SBAI, said: “We are excited about the launch of the EMEA committee and are grateful for the support of the industry leaders who agreed to serve as its members.“While the SBAI’s standards are universal in nature, it is important that we have industry leaders to address unique topics and facilitate the dialogue between regional asset owners, managers and regulators.”Therrien is head of strategic partnerships for developed markets at Caisse de depot et placement du Quebec, and was appointed SBAI chair in April, alongside Luke Ellis, CEO of Man Group as deputy chair.Looking for IPE’s latest magazine? Read the digital edition here. It is the SBAI’s third regional committee. Managers from Europe, including the UK, account for 35% of the SBAI’s signatories and institutional investors in Europe account for 32% of its “Investor Chapter” members.CERN’s Manola-Bonthond said: “I am honoured to chair the SBAI’s EMEA committee to help further the important work and growing adoption of the alternative investment standards in this region. Elena Manola-Bonthond, chief invesment officer of the CHF4.4bn (€4.1bn) CERN Pension Fund, has been chosen to chair a committee that the Standards Board for Alternative Investments (SBAI) has established to focus on its work in Europe, the Middle East and Africa (EMEA).The SBAI said membership of the 11-strong committee would generally be split equally across asset owners and investors.Representatives of the former on the new committee include Roy Kuo, team head, alternative strategies at Church Commissioners for England; Kai Rimpi, head of hedge funds at Varma Mutual Pension Insurance Company; and Patrick Bronger, expert portfolio manager at APG Asset Management.Doc Horn, head of total return equities at Pictet Asset Management, has been named deputy chair of the new EMEA committee.
13A Ocean View, Mermaid Beach sold for $4.6 million.CASHED up buyers are snapping up beachfront homes in secret deals with more than $50 million in property trading hands already this year.The Gold Coast’s exclusive beachfront real estate, often dominated by Mermaid Beach’s millionaire’s row, continues to be the most sought after property on the Glitter Strip, with many transactions happening off-marketThis Hedges Ave penthouse sold earlier this year for $5.25 million.REIQ’s John Newlands said living on the beachfront was something many buyers aspired to.“It’s a limited resource,” Mr Newlands said.“There’s only a small amount of it so it comes down to supply and demand.”A beachfront home in Broadbeach sold in a secret deal for $4.25 million this week. The four-level property at Vogue on Broadbeach went under contract to a Brisbane-based buyer.Apt 4 ‘Jade’ 35 Northcliffe Terrace, Surfers Paradise sold for $3.625 million.More from news02:37International architect Desmond Brooks selling luxury beach villa16 hours ago02:37Gold Coast property: Sovereign Islands mega mansion hits market with $16m price tag2 days ago1/5-9 Broadbeach Blvd, Broadbeach sold for $4.25 million.Tolemy Stevens of Harcourts Coastal handled the off-market sale and said the beachfront market was booming.“The global aspiration of any property investor is to own a piece of waterfront real estate,” he said.“Taking that a step further, the beachfront more specifically and living on the ocean is the pinnacle of lifestyle property.“While most have witnessed the recent slowdown of the southern state markets, the Gold Coast luxury beachfront market continues to go from strength to strength and shows no signs of slowing.”103-105 Hedges Ave, Mermaid Beach holds the beachfront sales record for 2018 — it traded for $11.6 million.The highest priced achieved for a beachfront sale this year went to a house at 103-105 Hedges Ave — retired cotton farmer Alan Frost sold his mansion in an off-market sale for $11.6 million in April through agent Michael Kollosche.It is also the highest sale on the Gold Coast this year.FREE HOUSE OFF THE MARKETLAVISH PRICE FOR LUXURY HOME51 Cylinders Drive, Kingscliff sold for $3 million“The lack of stock available to purchase and the calibre of buyers that have purchased over the past seven years will be the catalyst for the market to show steady consistent growth and remain insulated from any market volatility in the future,” Mr Kollosche said.The beachfront also holds the Gold Coast sales record — the $27 million paid in 2008 when BreakFree founder Tony Smith sold an uncompleted mansion in Hedges Ave to later-failed internet whiz, Daniel Tzvetkoff.
Paolo Biscaro and Cordell Khoury at Julius Pizzeria in South Brisbane.THE owners of two of Brisbane’s most popular Italian restaurants have put their amazing New Farm outlet on the market.Cordell and Justine Khoury, the duo behind Beccofino and Julius Pizzeria, bought the property when it was an old 1940s Queenslander in need of a makeover in 2013.GET THE LATEST REAL ESTATE NEWS DIRECT TO YOUR INBOX HEREThis house at 100 James St, New Farm, is for sale.The back of the house at 100 James St, New Farm.They’ve since modernised it with the help of Chris Brumby of Big House Little House, who drew up the renovation plans.The two-level home has three bedrooms and a master retreat, three bathrooms, an inground pool and off-street parking for four cars.The open-plan design and use of glass throughout the house makes it perfect for entertaining and pizza nights by the fire.OLD AND NEW GO UNDER THE GAVELMore from newsParks and wildlife the new lust-haves post coronavirus17 hours agoNoosa’s best beachfront penthouse is about to hit the market17 hours agoThe kitchen in the home at 100 James St, New Farm.100 James St, New Farm.Given Cordell is a professional chef, a lot of thought went into the kitchen design and finishes, which include marble and stainless steel benchtops and timber veneer cabinetry, similar to his restaurants.The master bedroom is like a cantilevered glass pod.WINTER FEAST FOR PROPERTY BUYERSOne of the bedrooms in the home at 100 James St, New Farm.City views from the rooftop terrace at 100 James St, New Farm.There’s even a ‘secret’ rooftop balcony, perfect for soaking up the city views.The property is being marketed by Matt Lancashire of Ray White New Farm and is scheduled for auction on August 18.
THERE is no end to the problems clogged, leaking or just old gutters can cause in a home.And with cyclone season bearing down on the Far North, now is the time for homeowners to get a rooftop steel check-up. Leaves and twigs can clog downpipes and gutters preventing water flow and causing flooding in and around the property. Water damage, rot and algae growth could also be a side effect.Depending on how close a house is to trees, Mosquito Cairns owner Dave Williams said most gutters and roofs need cleaning at least once a year and when he and his staff are on top of a house, the list of items they pull out of drains and roof cavities is astounding.“We’ve found all sorts of weird and wonderful things like emu feet in communities,” he said.“I’ve pulled out knives, utensils, machetes, shoes, school bags, bottles, hats, a doctor’s stethoscope, wallets, calculators, coffee cups, pillows, clothing. You name it, if it can be thrown or blown, we’ll find it.“But the biggest problem is people not getting their gutters cleaned and plants taking root. When you see a plant six inches above your roofline that could have a root system of four to six metres and it’s too late — it will have already blocked your downpipes.“I’ve taken out a tree growing in the middle of someone’s roof that was two metres tall.”Mr Williams also said during summer bats could drop hundreds of mango seeds on roofs.“Just that weight alone is enough to pull off your gutter,” he said.More from newsCairns home ticks popular internet search terms2 days agoTen auction results from ‘active’ weekend in Cairns2 days ago“One of the things people don’t realise as well is the amount of ants, cockroaches, worms and millipedes living in gutters. You can have an ant’s nest with hundreds of thousands of insects and they’ve got to go somewhere so they go down the walls and into the roof.“Once gutters overflow, you may end up water backing up inside the roof and coming down the internal walls and coming in contact with electricity, potentially risking lives.”Birds, bats, rats also snakes make their way into ceiling cavities via the guttering.Mr Williams said with the wet season traditionally started at the beginning of December and urged homeowners to get their gutters checked before the end of this month.He said while most operators tried not to turn customers away, they could not possibly attend to all the calls they receive the day after a massive downpour.