UK pensions industry laments government intransigence on transfers

first_imgThe National Association of Pension Funds (NAPF) has criticised the government’s move to refuse amendments to the Pensions Bill that would have allowed further discussion on how to solve a potential small defined contribution (DC) pots crisis.The Pensions Bill, which entered its final phase of becoming law, last night, was voted on by the House of Lords, the UK Parliament’s second chamber.The opposition Labour party had tabled amendments to the Bill that would have allowed the creation of a central aggregator.Pot-follows-member, which is the system devised – and preferred – by the Department for Work & Pensions (DWP), would see DC pension pots move with members as they changed employers, joining their new employer’s scheme. Opponents to the system have long lobbied for a more centralised method, where DC pots would leave occupational schemes when a employee leaves employment, and automatically move to a central aggregator scheme.However, in last night’s House of Lords debate, the Conversative and Liberal Democrat coalition government rejected the amendments.The NAPF said, given the broad agreement against the pot-follows-member system, it was disappointing to see the government ignore this, and not vote through the amendments.Helen Forrest, head of policy at the lobby group, said: “Broadening the legislation would have allowed alternative proposals to be pursued whilst keeping pot follows member on the table.“There is now a risk pension savers and the pensions industry are stuck with a flawed system of automatic transfers that is prescribed in legislation but can’t be made to work in the real world.”  The rejecteion came after an pensions industry collective wrote to the government urging it to accept amendments made to the pot-follows-member system.In an open letter published in the Financial Times, the group raised concerns with the government that it was moving too fast to implement its preferred option.The collective comprises the National Association of Pension Funds (NAPF); the Trades Union Congress (TUC); the EEF, an organisation of manufacturers; charity Age UK; and Which?, a consumer protection lobby group.The letter, while commending the government for tackling the issue of small DC pension pots, said pot-follows-member failed to safeguard savers’ interests.“Our organisations collectively call on the government to accept opposition amendments to the Pensions Bill,” the letter said.The letter said the government’s preferred model carried inherent risks that must be addressed, and that savers could suffer from higher charges and penalty charges with automatic transfers, or a reduction in governance.It said it could also expose savers to transaction costs and investment risks, as well as see pension providers use more liquid asset classes, with lower returns, as they would have no guarantee of future commitments.“Alternative proposals have been made to manage a number of these risks, but these, like pot follows member, require more detailed thinking to ensure savers’ interests are safeguarded,” the letter said. “Widening the scope of the legislation to allow the development of more than one potential model would be the most useful step.”last_img read more

Mercer Switzerland head of retirement to leave consultancy in autumn

first_imgWilli Thurnherr, head of retirement at Mercer in Switzerland, will be leaving the consultancy on 30 September.He had been in this position since 2007 and is rumoured to be joining another international consultancy in Zurich. Catherine Schoendorff, chief executive at Mercer Switzerland, is to head the retirement business on an interim basis.She confirmed to IPE that the consultancy was “looking into internal and external options” to replace Thurnherr. “We are sure we will be able to present a successor shortly,” she added.Further, Schoendorff stressed that Switzerland would remain a “market of great importance and a major growth opportunity” for Mercer.Schoendorff herself had been named country head of Mercer Switzerland in January this year.She joined the consultancy in 2011 after a decade at Hewitt as leader of its pension administration business in Belgium, the Netherlands, Germany and Switzerland.Over the last year, there have been several shifts in the Swiss international consultancy universe, with former Publica head Werner Hertzog having left Aon Hewitt Switzerland in May 2014.Around the same time, Edouard Stucki left as a senior consultant at Towers Watson Switzerland.At beginning of 2015, he joined comPlan’s asset management team, managing the assets of Swisscom’s Pensionskasse. In July last year, Mercer Switzerland announced its head of investment Christian Bodmer was to leave the consultancy.last_img read more

Dutch schemes’ exodus from hedge funds continues

first_imgThe funds indicated that an important reason for the decision was that their investments had not produced the added value they expected.They made clear that the returns of the relatively expensive asset class had been disappointing, and sometimes even yielded negative results.In addition to the argument about costs and returns, the Avebe scheme said that its fiduciary manager, TKP Investments, had indicated that it was unlikely that hedge funds would generate better results for the short term.SPH, the €10bn Dutch pension fund for doctors, also decided to cut its hedge fund allocation last year, citing costs and complexity. Despite shrinking overall allocations, Pensioen Pro said that it had found one pension fund that had increased its exposure to hedge funds last year.The €3.6bn occupation scheme for physiotherapists (Fysiotherapeuten) said it had to shift assets to its hedge funds portfolio in order to stick to its strategic allocation of 4%, following an increase of its total assets.In December, analysis by Pensioen Pro found that hedge funds had generated a return of 19.8% for Dutch pension schemes between the start of 2013 and the middle of 2017.Access Pensioen Pro’s original article here (in Dutch). The trend of Dutch pension funds abandoning hedge funds is continuing, according to IPE’s Dutch sister publication Pensioen Pro.Citing statistical figures from supervisor De Nederlandsche Bank (DNB), it said the total amount Dutch schemes have allocated to hedge funds fell again last year to €23.6bn.At the end of 2016 combined investment in hedge funds was €25.5bn, down from roughly €30bn the previous year.Additional research by Pensioen Pro showed that, for example, the pension funds Randstad (€1.1bn), Avebe (€230m) and Van Lanschot (€989n) decided to divest their holdings in funds-of-hedge-funds last year.last_img read more

Analysis: Experts warn of bank stress test impact on covered bonds

first_imgFuchs added: “Maximising liquidity for the bank with covered bonds can swiftly and significantly alter a covered bond’s risk profile.” Eberhard Schwarz, ComplementaEberhard Schwarz, Swiss consultancy Complementa’s representative in Germany, shared Fuchs’ concerns. He told IPE: “The criticism voiced by Scope is interesting as it points to a weakness in a market downturn: banks could be tempted to use existing cover pools for covered bonds to up their liquidity in crisis situations.”  Covered bonds are an important and long-standing investment for many institutional investors. In Germany in particular, the local variant – known as Pfandbriefe – makes up a significant part of institutional portfolios.Scope confirmed to IPE that its criticism of the ECB stress test proposal still stood even if only applied to new issues of covered bonds.“This sends the wrong signal,” Fuchs stated. “Allowing the reduction of over-capitalisation to the legal minimum could prompt investors to demand higher risk premia if they know that supervisors are comfortable with issuers diluting existing security packages.”Schwarz said the ECB should leave this element out of the stress test altogether.Harmonised covered bondsMeanwhile, the EU parliament has laid the groundwork for the harmonisation of covered bond issuance in Europe.By 2023 covered bonds all over the EU will look more similar than they currently do. However, national discretion will still be allowed regarding the content of the cover pools – assets set aside as collateral to underpin the covered bond – to cater to the different tastes of investors, according to Scope.It remains to be seen how detailed the minimum quality criteria requirements set by the EU will be. Source: European ParliamentProposed EU rules on covered bonds have been informed by German Pfandbriefe regulationsSchwarz said he was not too worried, highlighting that the EU “has been certainly inspired to some degree by the German law on Pfandbriefe” in its new regulation.Scope also did “not expect any market disruption once implemented, even though harmonisation will prompt amendments to all European covered bond frameworks”, as the agreed timeline “allows for a smooth transition”.Schwarz was convinced that “covered bonds now have a more internationalised standing”, adding that “a more standardised regulatory framework widens the market and increases potential for diversification”.However, he emphasised that investors should assess carefully not only the size of the surplus cover of any covered bonds, but also the content of these reserve assets.In the first quarter of 2019 Scope reported a new record high in covered bond issuance across Europe, with a volume of €60bn. This was the highest new issuance volume since 2012.New issuers included “household names” as well as “more exotic supply”, Scope said. Among the latter were the first Slovakian benchmark covered bond, a Danish shipping finance firm’s first covered issue, as well as “a constant trickle of ESG-type covered bonds”.center_img Banks could be asked to tell the ECB how much liquidity they could generate from over-collateralised covered bonds – a move that has caused some experts to warn of negative consequences for the burgeoning asset class.In a note regarding new stress test information requirements for the European banks, the ECB has told tells banks to report “the estimated nominal value of additional covered bonds [CBs] which could be generated out of assets already mobilised into CBs cover pools… the expected additional liquidity… potentially obtained assuming that such additional CBs were retained and encumbered in central bank funding operations”.German rating agency Scope has voiced concern that this information could mean the ECB was “focusing solely on the survivability of banks” and thus “jeopardising the credit strength deriving from the dual recourse nature of covered bonds”.“Investors will be deprived of the umbrella of strong cover support and high over-capitalisation just as it starts to rain,” wrote Karlo Fuchs, head of covered bonds at Scope Ratings, in a commentary.last_img read more

Mandate roundup: LGPS Central, Scandi investor initiate EM searches

first_imgThe investment pooling company for eight local authority pension funds from across central England is looking for global active emerging market bond managers to run a fund of around £900m (€1.1bn).According to an announcement via IPE’s Quest service, LGPS Central’s current intention is for the fund to predominantly invest in hard and local currency government bonds, and hard currency corporate bonds.Subject to slight variations as the search process unfolds, the asset pool indicated it expected the fund mandate to include certain exposure floors and limits, the main ones being:At least 50% of the fund should be invested in hard currency sovereign and quasi-sovereign debtUp to 30% can be invested in local currency sovereigns; andUp to 30% can be invested in hard currency corporate bonds LGPS Central said active management would be expected to achieve net outperformance of 100bp against the benchmark, which is expected to be the JPMorgan EMBI Global Diversified Index GBP Hedged index.The asset pool is looking for asset managers to be able to demonstrate a “consistent, robust, repeatable, investment process”, with value for money, full transparency and responsible investment among other key requirements.The tendering process is a three-stage process, with third parties initially invited to tender through a “standard selection questionnaire” process. Successful applicants will then be invited to complete a request-for-proposal before a “competitive” dialogue during final interviews and selection.The closing date for selection questionnaire submissions will be 12 noon UK time on 23 December.LGPS Central is responsible for pooling the investments of the local authority pension funds for Cheshire, Derbyshire, Leicestershire, Nottinghamshire, Shropshire, Staffordshire, West Midlands and Worcestershire. They have around £45bn in assets under management between them.Scandi EM equity searchSeparately, a Scandinavian investor has tendered a $100m (€90m) long-only mandate for investing in the equity of small and mid-cap (SMID) companies in global emerging markets. According to search QN-2583 on IPE Quest, the investor wants an active bottom-up focussed investment style, with a tracking error of between 3% and 8%. The benchmark should be MSCI Emerging Markets SMID Cap Index (NR USD).Applicants should be signed up to the Principles for Responsible Investment or in the process of doing so. When applying they should state performance to 30 September 2019 gross of fees.The final closing date is 14 January at 5pm UK time.The IPE news team is unable to answer any further questions about IPE Quest, Discovery, or Innovation tender notices to protect the interests of clients conducting the search. To obtain information directly from IPE Quest, please contact Jayna Vishram on +44 (0) 20 3465 9330 or email jayna.vishram@ipe-quest.com.last_img read more

Burpengary home has sold for $335k above suburb median after 12 months

first_imgThe home at 34 Chestnut Drive, Burpengary, sold for $790,000.THIS home at Burpengary has sold after nearly 12 months on the market.The 34 Chestnut Drive residence sold for $790,000.LJ Hooker Morayfield and Caboolture area manager Jye O’Brien said the home sold at a much higher price than other properties in the area, which was why it had spent some time on the market.According to CoreLogic data the suburb median for Burpengary is $455,000.He said the new owners, a couple, liked the size of the home and the lack of maintenance. More from newsLand grab sees 12 Sandstone Lakes homesites sell in a week21 Jun 2020Tropical haven walking distance from the surf9 Oct 2019The kitchen at 34 Chestnut Drive, Burpengary.Mr O’Brien said although this sale took some time, the market at Burpengary was performing well.“The market is amazing,” Mr O’Brien said. “We’re breaking record prices but there aren’t enough properties for the number of buyers.”The agent said there was a diverse range of buyers but had recently experienced an influx of first-home buyers.“It’s unusual because previously first-home owners wouldn’t be looking around the $400,000 to $500,000 price range,” he said.“However, people are now moving further north and getting more value for their money.”Video Player is loading.Play VideoPlayNext playlist itemMuteCurrent Time 0:00/Duration 7:28Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -7:28 Playback Rate1xChaptersChaptersDescriptionsdescriptions off, selectedCaptionscaptions settings, opens captions settings dialogcaptions off, selectedQuality Levels576p576p480p480p256p256p228p228pAutoA, 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 Rate1xFullscreenPrestige property with Liz Tilley07:29last_img read more

World’s tallest man-made waterfall receives green light in Brisbane

first_imgWORLD’S TALLEST: Developer Aria to deliver world’s tallest man-made waterfall and Brisbane’s first inner-city park in 20 years.BRISBANE-BASED developer Aria Property Group will give new meaning to the term ‘urban jungle’, having been given the green light for a project which will deliver the largest man-made waterfall.The development will also see the creation of Brisbane’s first inner-city park in more than 20 years and its residents will have access to two electric Tesla vehicles available, for free, through an online booking system.The architecturally-designed building features 216 residential apartments crowned by a 118m-high water wall cascading from the 50-metre rooftop lap pool.Brisbane City Council approved the project on July 6, 2018 and stated it would be one of the most sustainable residential buildings in the city.City planning chairman councillor Matthew Bourke said the city-shaping design would add to the ongoing urban renewal of South Brisbane, including the laneway dining precinct along Fish Lane.“Brisbane is a great city to live, work and relax, and place-making designs such as the waterfall tower contribute to our reputation as Australia’s ‘new world’ city,” Cr Bourke said.Aria Property Group design manager Simon White said the architecturally-designed building features 216 residential apartments crowned by a 118-metre-high water wall cascading from the 50-metre rooftop lap pool.Designed by world-renowned water feature specialists Wet Design, the water wall named ‘Marvel’ moves down a glass facade, captivating passers-by with its continuous moving texture, accentuated by glistening lights.>> AWARD WINNERS REVEAL PLANS FOR INNER CITY WATERFALL PROJECT<> FOLLOW EMILY BLACK ON TWITTER< read more

Amazing renovation: From tired classic to exquisite inner-city oasis

first_imgThe bathroom before the renovation. A photo of the house at 36 Riverton St, Clayfield, when it was originally built in the 1940s. One of the bathrooms after the renovation.Features include polished timber floors, travertine tiles, two fireplaces and original French chandeliers.“There is nothing fake — everything’s real in the house,” Mr Miller said.The two-level home is on an elevated 1070 sqm block over two lots, offering the potential to subdivide subject to council approval.The backyard accommodates a large, in-ground pool and outdoor entertaining area with a fireplace, framed by landscaped gardens.The property is for sale for offers over $2.4 million through Drew Davies and Rhys Cockram of McGrath Estate Agents.RENO FACT CHECKTime taken: 13 monthsTotal spend: $900,000End valuation: Approx. $2.4m The pool post renovation. The kitchen before the renovation. Dr Andrew Lee and Daniel Miller at the Clayfield home they renovated and are now selling. Image: AAP/Richard Waugh.ANDREW Lee knew he had found the perfect home as soon as he stepped through the front door.The Brisbane doctor looked past the dated pink and green walls and straight through the giant casement windows showcasing a secluded garden and lighting up the room.“When I walked into the house for the first time, that’s what made me fall in love with it, and it’s still the area that appeals to me the most,” Dr Lee. GET THE LATEST REAL ESTATE NEWS DIRECT TO YOUR INBOX HERE The kitchen post renovation.And the attention to detail and quality features shine through.“We wanted to keep the existing feel of the house,” Mr Miller said.“We didn’t add any modern features — we wanted something classic. “When you walk in, you don’t assume its been renovated.”Dr Lee agreed they were determined to create something “less trendy and more timely”, so that it would stand the test of time.More from newsParks and wildlife the new lust-haves post coronavirus16 hours agoNoosa’s best beachfront penthouse is about to hit the market16 hours ago JAMES PACKER SPLASHES $80M ON NEW HOME One of the bedrooms before the renovation. The pool at the house before the renovation.center_img A photo of the house at 36 Riverton St, Clayfield, when it was last renovated in the 1980s. The wallpaper in the kitchen, dining and living area is a blue willow pattern. The exterior of the house after the renovation.But co-owner Daniel Miller had a less romantic first impression.“It was in a pretty bad state,” Mr Miller said.“We needed to completely gut and redo every single room.”The pair bought the 1940s property at 36 Riverton St, Clayfield, in 2005 with a view to taking on a bigger home they could restore to its former glory.It was their first renovation project — and they made sure it was done properly.“The renovation was never done with a view to flipping the house,” Dr Lee said.“A lot of decisions were made (when choosing materials and finishes) because they were beautiful things that we wanted to have.” WHY DID OWNERS DROP PRICE BY $30K? There is also a separate, formal sitting room with a marble and timber fireplace.As a result, the entire process was relatively stress-free.“We were sensible in knowing that the prices we were quoted were going to completely blow out,” Mr Miller said.There was one room the pair didn’t originally see eye-to-eye on though.“I chose the wallpaper in the kitchen,” Mr Miller said.“My grandmother liked collecting blue willow patterned china, so that’s where that came from. “I wanted something to remember her by.”Dr Lee admitted it was not his favourite room in the house.“I was a bit ambivalent and, to be absolutely honest, without the rest of the room done, it took me a while to come around,” he said.Mr Miller, on the other hand, said he spent much of his time in the kitchen, which is equipped with a 60cm x 90cm double oven, marble bench tops, an oversized sink and custom-made overhead lights imported from New York. The kitchen in the home at 36 Riverton Street after the renovation. They recruited interior designer, Christopher Thomas, Trebilcock & Associates Architects and Yates Builders to take on the challenge, and moved out for 13 months.“We rented five minutes down the road, so we stopped by on a daily basis to see how things were progressing,” Dr Lee said. One of the bedrooms after the renovation.The original kitchen, which was small and in the middle of the house, was opened up to incorporate the living and dining area flowing out to the pool and backyard.Dr Lee’s favourite room — the formal entertaining area — required the least structural work.The concrete fireplace was ripped out and replaced with a marble one with a timber frame and some of the architraves needed to be remade to match the existing features.On this level, there are also two bedrooms and two bathrooms.Upstairs, there are another three bedrooms, a main bathroom and a family room.“We added an extra bedroom upstairs because (the home’s in) an area with lots of schools, so we thought one day we might sell to a family,” Mr Miller said.“Every original bathroom was completely removed and three new ones put in completely different places.”last_img read more

Architect’s QLD masterpiece sold in bluechip Brisbane suburb

first_img FOLLOW SOPHIE FOSTER ON FACEBOOK The home sits in prime position among Ascot’s avenues and within the much sought after Ascot School catchment, but it’s the house itself which has been widely coveted.Mr Lockyer designed 30 Kitchener Road as a five bedroom, four bathroom, three car space home, hugging three sides of the large 898 sqm block.The home also has dual street access — a rarity in any suburb, let alone bluechip Ascot.Add to that just about every modern feature a 21st century family could lust after — from au pair accommodation to a separate playroom for kids. The home has dual street access. More than enough room in the walk in robe. Light and dark interplay throughout the home.There’s an outdoor kitchen, wood fireplace, external shower and powder room, full automation of everything from security to lighting to music, underfloor heating and Miele appliances. The house also has 10.68kW solar system with 10kW battery storage, a vertical garden, swimming pool and pool storage house. Mr Lancashire, who marketed the property with colleague Jahkoda Ferguson, had listed the home as “a luxe ultra-modern residence” and “one that must be inspected to truly grasp its magnitude”.It was described as “an atrium-style design allows for extraordinary visibility and functionality with a seamless indoor/outdoor integration between the lavish interior and Steven Clegg-designed landscape”.center_img 30 Kitchener Road meshes concrete, metal and greenery for street appeal. High ceilings and an open plan living style. 30 Kitchener Road, Ascot, has gone under contract.The latest masterpiece of renowned Brisbane architect Shaun Lockyer has been snapped up for a suitably jawdropping sum.You needed deep pockets to nab the Ascot creation that only recently burst onto the listings scene — it’s believed to have gone under contract in the mid-$5million range.The property has seen strong interest and a blaze of publicity since it was released in October in an expressions of interest campaign. It was declared under contract this week.Its charm was that it exemplifies new age Queensland living, built entirely around indoor-outdoor flow, maximising living space and creating zones for various family activities.Agent Matt Lancashire of Ray White New Farm could not comment except to confirm the property had three offers, with 68 buyers met during inspections with interest nationally and offshore. More from newsParks and wildlife the new lust-haves post coronavirus15 hours agoNoosa’s best beachfront penthouse is about to hit the market15 hours agoThe outdoor area was an integral part of the design.last_img read more

Acreage lots in demand close to highway and CBD

first_imgThe Crossing, Karalee. Larger acreage lots close to Brisbane’s CBD will become harder to find with families and tree changers expected to drive demand.Colliers International residential director Daniel Hirst said in the second half of 2018 the wider market for house and land slowed due to tighter lending restrictions by banks. However, buyer demand for acreage lots in Karalee, 30km southwest of Brisbane’s CBD, remained strong.Mr Hirst said at Aspect they had sold 30 blocks averaging 4300sq m since launching mid last year, which was a great result that had spurred on the release of another stage.More from newsParks and wildlife the new lust-haves post coronavirus13 hours agoNoosa’s best beachfront penthouse is about to hit the market13 hours ago“And we expect another acreage estate in Karalee, The Crossing, to be sold out this year, with only 30 of the 160 blocks remaining for sale, averaging 2800sq m in size,” he said.“Second home buyers are active in this market and they are drawn to the space and lifestyle that acreage living offers. It is the Australian dream to live on half an acre, especially for those living in built up urban areas where large lots are scarce.“We are seeing old farmland on the outskirts of Brisbane being divided into 400sq m lots on average, whereas in the Karalee peninsula the small acreage size lots remain, in a beautiful location along the Brisbane River and within 40 minutes drive of the CBD.”Kylie Gallagher and her family bought a 4000sq m lot in Aspect and are due to move into their four-bedroom, four-bathroom home in May. “We have been in the market for three and a half years looking for acreage lots in the southwest of Brisbane,” Ms Gallagher said.“In our search we mostly came across lots that are 1000sq m in size but we really wanted more space and required a location within proximity to the highway and the city. It was important to us as we have teenagers and they wanted easy access to the city, university and high school.”Lots around 4046sq m within Aspect are selling from $328,000, while The Crossing offers fully serviced larger lots which are selling for an average of $338,000 and will soon release its last riverside precinct.last_img read more