September, 2020 Archive
In absolute terms, AP6’s net profit for the year was SEK1.86bn (€210m), compared with SEK1.7bn in 2012, the fund said in its annual report.In the last 10 years, it said the net annual return had been 5.6%.This was the result of “very successful investments in mature companies,” on the one hand, it said, with these producing a 14% return, both directly and through funds, and losses made on early-stage companies of 11.7%.Early-stage companies, however, now make a up a relatively small percentage of the portfolio, AP6 said, as a result of a change in overall investment strategy in recent years.Internal costs fell to SEK98m from SEK116m.The fund said its activity levels had been high during 2013 in both corporate and mutual fund investments.Karl Swartling, deputy director at AP6, said: “Transition work towards a more mature company has continued both in terms of direct investments and fund investments.“We are still at the beginning of building a new portfolio of investments that will generate long-term returns, over a 5-10 year time horizon.”Value growth in this type of unlisted portfolio will not happen from day one, he said, but will normally be visible in performance figures some years into the ownership period.AP6’s total assets under management grew to SEK22.1bn at the end of December 2013 from SEK20.2bn a year before. Sweden’s AP6 pension buffer fund, which invests solely in private equity, made a net return of 9.2% in 2013, the same as the previous year, with profits from mature companies outweighing losses on new firms.The pension fund said it was continuing to shift its portfolio towards buyouts and away from venture capital.The sixth AP fund differs from the other AP funds in the Swedish pensions buffer fund system in that it receives no new money from the government, nor does it make pension payments.It invests in private equity – directly as well as through funds – focusing on companies in the Nordic region.
AP6, the sixth Swedish national buffer fund, has invested SEK100m (€11m) in Tobii Technology, a developer of comprehensive eye-tracking solutions, and eye-tracking components for integration with computers, gaming devices and vehicles.Eye tracking is a technology that makes it possible for computers to know where users are looking.One of its main applications is an eye-operated communication system allowing people with disabilities to interact with the outside world.Tobii has a global presence, and its 2013 turnover was SEK412m. Last May, it acquired Dynavox, the US-based provider of augmentative and alternative communication products and speech-generating devices for disabilities.Tobii said the capital injection provided by AP6 would be used to finance this acquisition and also its own continued expansion, in both its existing markets and new ones.Henrik Eskilsson, chief executive at Tobii Technology, said: “Funding from AP6 gives us the substance we need to strengthen Tobii’s position in each market while we continue to expand.“AP6 and Tobii have had a sound relationship for a long time. From our perspective, this is a very healthy next step in terms of Tobii’s ownership structure.”Other institutional investors include Amadeus Capital, Intel Capital and Northzone Ventures.Ulf Lindqvist, head of communications at AP6, said: “The investment is totally in line with our strategy to invest in growth-orientated mature companies. We have been following Tobii for some time, and that is why we took the opportunity to invest.”AP6 is a long-term investor in unlisted companies, both directly and indirectly.Its portfolio is made up of 84% buyout/mature companies and 16% venture/early phase.Investments in venture capital are done only indirectly through funds.AP6 focuses on more mature companies with growth potential, on which it has historically enjoyed a return of 16.3% per year since AP6 was set up in 1996.
PFA Pension’s chairman has demanded a statement from the company’s chief executive Henrik Heideby to explain how and why the company is using an advertising agency partly owned by his son.Denmark’s largest commercial pensions provider came under fire recently in Danish newspaper Berlingske Tidende for being a long-term major client of advertising agency Umwelt, which, according to the paper, is 16% owned by Heideby’s son Mikkel Heideby.Mikkel Heideby is one of four partners in the agency and also has the role of contact director.The newspaper reports suggested the situation represented at least a potential conflict of interest. PFA chairman Svend Askær responded with a letter to the newspaper, saying: “Against the background of the article in Berlingske Tidende, I have asked Henrik Heideby for a statement to the supervisory board, so we can have it made clear what is going on in this case.”When the statement is available, the board will deal with it, he said.“The board is of the opinion there should not be business relationships with companies in which there are family relationships,” Askær said in the letter.“When we have dealt with the case within the board, we must at the same time assess the need to tighten up the conditions around PFA’s general policy surrounding business relationships with companies in which PFA staff have family relationships.”A spokesman for PFA Pension confirmed the wording of Askær’s letter but said the company had no comment on the matter.According to the news reports, PFA and Umwelt have worked closely together since 2008.PFA, after statutory pension fund ATP, is Denmark’s largest pension fund, with DKK417bn (€56bn) in assets at the end of 2013.It is run as a commercial enterprise but owned by its customers.
Lisbeth Hald, director of HR and facility management at KMD, said the company gave overall consideration to economics and industrial relations, but that it had also been important for the agreement to be with a provider that delivered the whole package of a KMD pension and healthcare system.“It is obviously important that the pension return is OK, but we also put a strong emphasis on being able to offer our staff a completely new insurance product in case they lose the ability to work, and a healthcare plan with a focus on preventative counselling,” she said.Sampension manages assets of around DKK230bn. Danish labour market pension scheme Sampension has won a contract from IT and software company KMD to provide a unified pension scheme for its workforce of around 3,000.The contract from the Danish IT company will put about DKK3bn (€400m) of pension savings under Sampension’s management, the pension scheme said.Sampension said KMD invited the leading pension providers to tender for the contract, and was advised by PwC in the process.Hasse Jørgensen, managing director at Sampension, said: “We are both pleased and proud about the choice for Sampension.”
Slippage of both dates could be possible, the Commission official admitted. However, the projected speed makes the new Commission’s motives to succeed with CMU reform clear, with lawmakers conscious of the potential of the initiative to help solve the EU’s economic problems by facilitating cross-border investments.It was only on 1 November that Jonathan Hill, the new commissioner for financial stability, financial services and capital markets union, was instructed by Jean-Claude Juncker, Commission president, to “develop and integrate capital markets as a source of financing for innovative projects and long-term investment”.Hill has previously identified the underdeveloped European private pensions market as a hurdle to creating the CMU.External advisers to the team working on the CMU have recommended that the Commission define policies well ahead of future action. Diego Valiante, head of research at the Brussels-based European Capital Market Institute, said objectives should be clearly expressed but not “blurred”.Somewhat guarded in his enthusiasm is Syed Kamall, leader of the European Conservatives and Reformists (ECR) Group.The MEP welcomed any Commission proposal that would lead to “well functioning” capital markets in the EU.However, he warned that if the plans turned out to be more “institutional”, and aimed at building yet another ‘regulatory union’, then “there will be resistance”.Fabian Zuleeg, chief executive at the European Policy Centre, a Brussels think tank, was even more pessimistic in the view that, on matters of economic reform, progress is hindered simply because the EU member states “are not ready for it”.For more on the role of sustainability and green investment in the CMU, see the current issue of IPE The European Commission is fast-tracking its programme to reform the EU’s Capital Markets Union (CMU) by planning to publish a ‘green’ paper, or consultation document, on the subject before the end of January 2015.A Commission official, who confirmed the deadline, added that a large team had already been set up and was working on the project.Previously, leaked information from a Commission source put the target date for the policy paper as before Christmas this year. In fact, the Commission plans to arrive at a ‘white’ policy paper before the summer of 2015, as its official target.
The coverage ratio at SSPF, the €25bn Dutch pension fund of energy giant Shell, has dropped from 131% to 124% due to increasing liabilities last year. According to the scheme’s annual report for 2014, it temporarily scaled back its interest hedge to zero over the third quarter of last year, when interest rates were falling. Because rates continued to fall, the move came at the expense of the scheme’s funding level.However, the pension fund’s ‘policy’ coverage ratio – the new criterion for indexation and rights cuts – improved to 126% over the first quarter of 2015, the scheme said. SSPF posted an overall annual return of 13.4% in 2014, with its liability hedge providing 2.7 percentage points of performance. The equity portfolio generated 12%, with US, Pacific and emerging market holdings helping the portfolio to outperform its benchmark by 0.8%, while fixed income holdings returned 8.5%, underperforming their benchmark by 0.2 percentage points.Private equity, despite producing a 22.1% return, fell 7.7 percentage points short of its benchmark.The scheme attributed the underperformance to the “vintage year effect”, when funds and volumes of the actual portfolio fail to match the operational benchmark.Hedge funds, real estate and other alternatives produced returns of 3.9%, 9.8% and 19.8%, respectively.SSPF changed its final salary scheme to average-salary arrangements with unconditional indexation as of 1 January 2015.The pension fund used the savings resulting from this change, as well as the increase of the official retirement age from 65 to 67, to reduce the employer’s contribution from 41.6% to 38% of the pensionable salary.It kept the workers’ premium at 2%.Last year, SSPF granted its participants a regular inflation compensation of 0.4%, as well as a 50% allowance for the 2.2% indexation in arrears over 2012.Referring to new regulations and the reduction of tax-facilitated pensions accrual, SSPF chairman Garmt Louw said its board was worried that politicians were “hollowing out pensions as a labour condition”.He noted that the fiscal rules for pension plans were now dictated chiefly by the government, rather than companies and their employees.Louw also cited “the challenge of dealing effectively with the uncertainties posed by the financial markets, historically low interest rates and unique support measures of the European Central Bank”.
MN, Towers Watson, Cardano, Kempen Fiduciary Management, Morningstar Investment Management, Plum Grove, PFA, Nordea, Principles for Responsible Investment, PWRI, Danica Pension, Danske Bank, Jupiter, Mercer, P-Solve, London Clearing House, Sandaire InvestmentMN – The €110bn Dutch asset manager and pensions provider is to reduce its management team from eight members to four. New chief executive René van de Kieft is to lead a team consisting of Henri den Boer, head of pensions operations and insurance, Gerald Cartigny, head of asset management, and a head of finance, risk and IT, yet to be appointed. Paul Versteeg, director of investments, and Walter Mutsaers, head of client relations, are to leave the company. Van de Kieft will take on Mutsaers’s responsibilities, while Versteeg’s will be transferred to Cartigny. Kor Boscher, the current CFO, and Femke de Jong, director of information, will join the director of finance, risk and information’s team.Towers Watson – Duncan Higgs has re-joined the consultancy, having been appointed to the delegated investment team. He joins from Cardano, where he was a senior investment consultant. Before then, he worked as an investment consultant at Towers Watson, providing investment strategy and implementation advice to a range of pensions funds. Kempen Fiduciary Management – Kempen has added to its investment and risk-management teams in the UK with the appointment of Katia Radermacher and Rob Kelly. Radermacher, who joins from Morningstar Investment Management, will be responsible for the portfolio management of client accounts. Kelly, who joins from Plum Grove, an Australian commodities company, will be responsible for reporting and risk-management oversight. PFA – Mads Kaagaard is joining Denmark’s PFA, having been appointed to the newly created position of executive vice-president, responsible for private customers and business support. He will become one of the group’s directors. PFA said the role had been created to strengthen its focus on individual customers. Kaagaard comes from Nordea, where he was in charge of savings and wealth offerings for the Nordic region. He will start his new job at PFA on 1 February 2016.Principles for Responsible Investment (PRI) – Xander den Uyl has been appointed as a board member at the PRI. Den Uyl has been a board member at ABP since April, following a six-year period as vice-chair at the €345bn civil service scheme until 2013. He is currently vice-chair at PWRI, the Dutch pension fund for disabled workers. Den Uyl has also been a board member of the Pensions Federation.Danica Pension – Jacob Aarup-Andersen, CFO at Denmark’s Danica Pension, is leaving the DKK327bn (€43.8bn) commercial pension provider, where he has spearheaded a major strategy overhaul in the last year and a half, to take a top position at Danica parent company Danske Bank. Aarup-Andersen was named as the successor to Danske Bank’s current CFO Henrik Ramlau-Hansen on 1 April 2016, when the latter has said he wished to resign.Jupiter – Matteo Dante Perruccio has been appointed as an executive adviser, initially focusing on developing Jupiter’s business in Italy. He served for eight years as a non-executive director at Jupiter Fund Management. In 2008, he founded and was chief executive at Hermes BPK Partners, a joint venture with the BT Pension Scheme. From 2000 to 2006, he held various roles at Pioneer Investments.Mercer – Alison Coulson has been appointed head of central functions in the consultancy’s Retirement Administration Leadership team, focusing on business development and marketing strategy. She joins from Towers Watson, where she was a senior client manager within the administration business.P-Solve – Matt Way has been appointed COO for P-Solve’s Advisory and Fiduciary Management divisions. He joins from London Clearing House. He has also worked at Ernst & Young, Lehman Brothers, Bear Stearns, MAN Group and RBS.Sandaire Investment – The investment office for families and foundations has appointed Bonny Landers as head of socially responsible and impact investing. Before joining Sandaire, Bonny founded Bay Street Consultants in Hong Kong in 2013, where she also served as managing director. In the eight years prior to this, she was chief executive at Sterling Private Management in Hong Kong.
The €226m pension fund of merchant bank GE Artesia is considering relocating to Belgium or joining the general pension fund (APF) of insurer and Achmea subsidiary Centraal Beheer.In its 2015 annual report, it said it concluded that both options had great potential, after assessing all other alternatives, including joining the APF for financial service providers.The scheme’s board said GE Artesia Bank’s sponsor, General Electric, preferred the pension fund’s linking up with the Belgium-based pension fund for its European subsidiaries.Last year, the €270m General Electric Netherlands sister scheme said it was considering a transfer to Belgium, due to the falling number of participants after its parent company scaled back Dutch activities. GE Artesia Bank stopped operating in the Netherlands last year.Its pension fund is looking into the alternative of joining the Centraal Beheer APF, in part because Syntrus Achmea is its pensions provider.Laurens Roodbol, chairman at the scheme, said he expected a decision would be made within a couple of months.Together with the pension funds of Van Lanschot Bank, KAS Bank and payment processor Equens, GE Artesia Bank recently looked into the feasibility of launching an APF for financial service providers.Because an APF offered by a commercial provider or insurer was deemed more attractive, however, the GE Artesia scheme withdrew before the other participants dropped the initiative last March.The Pensioenfonds GE Artesia Bank is now closed, with approximately 1,140 participants.
The FRC’s own investigation was launched following a referral by the Institute and Faculty of Actuaries in response to matters arising from TPR’s investigation.TPR reached settlements with the company in December last year. Contrasting figures for July UK private sector DB fundingDeficits of private sector pension funds increased during July, according to estimates from JLT – but decreased according to PricewaterhouseCoopers (PwC).JLT put the total deficit across all UK private sector schemes at £183bn (€205bn) at the end of July, up from £176bn at the end of June.At £183bn, the deficit is back to where the consultancy estimated it was at the end of May.The aggregate funding level remained at 90%.Charles Cowling, director, JLT Employee Benefits, said: “It is the trustees’ funding deficit that drives contribution demands on companies. Those companies and pension schemes currently carrying out their three-yearly actuarial valuation are likely to see significant increases in funding deficits and hence considerable demands for cash contributions.”He also flagged the prospect of accounting changes adding “tens of billions of pounds of additional liabilities on to the balance sheets of UK companies”.The International Accounting Standards Board has proposed changes to a part of the IAS19 accounting standard, and is currently carrying out work to assess the impact of the proposed amendments.The PwC figures, based on the consultancy’s Skyval index, put the deficit of private sector DB funds at £420bn at the end of July, down £40bn since last month.This was mainly as a result of falling liabilities, with asset values relatively static, according to Steven Dicker, PwC’s chief actuary.The funding position was 78.7%, the highest recorded by PwC since autumn 2014. The monetary value of the shortfall, at £420bn, is higher than it was three years ago, Dicker noted.“Part of this is due to schemes not being hedged against the fall in gilt yields, to what have been historically low levels,” he added. “However, while this hedging would have reduced the disclosed deficit on the ‘gilts plus’ funding approach, it is important to realise this wouldn’t necessarily improve the actual long-term outturn for schemes.”PwC’s deficit measure is different from JLT’s – instead of being based on IAS accounting measures it uses the target used by pension fund trustees to determine company cash contributions, as agreed between the trustees and sponsor. The Financial Reporting Council (FRC) has expanded the scope of its investigation into the conduct of certain actuaries and accountants involved with Coats Group pension schemes.The UK regulator has added one more actuary to the group it started investigating in July last year.It has also decided to extend the period of investigation, to start from 2002 rather than 2004.Thread manufacturer Coats Group, formerly called the Guinness Peat Group, has also been the subject of an investigation by the Pensions Regulator (TPR) in connection with sizeable deficits across three of its defined benefit schemes.
The CHF12.8bn (€10.9bn) pension fund for the Swiss canton of Geneva has cut out coal-related companies as part of a wider plan to reduce the carbon impact of its investment portfolio.CPEG is also mulling further carbon footprint constraints, according to chief investment officer Grégoire Haenni, via exclusions or best-in-class approaches in its investment portfolio. Best-in-class approaches involve seeking out companies that are leaders on a particular matter within a given sector or industry.The changes have been influenced at least in part by former vice president Al Gore. The environmentalist and chair of Generation Investment Management was a speaker at IPE’s annual awards conference in Prague last year and also held a private session with a select group of pension fund delegates, of which Haenni was one.“I was very honoured to have the opportunity to meet with him in a closed session and it was very inspiring because I realised that it’s happening now, and that this is because governments are now involved and committed,” Haenni told IPE. Al Gore addresses IPE’s annual conference in Prague in NovemberRecent climate change-oriented steps taken by CPEG include measuring the carbon footprint of its equity and corporate bond investments, the first time the pension fund had conducted such an exercise.This week it announced that the results were encouraging, in that the CO2-equivalent emissions linked with the portfolio were less than the market’s.In connection with the carbon footprint results CPEG announced that it had decided to ban investments in coal extraction and production. This would only affect a few holdings and studies showed it would not cost much in the way of tracking, said Haenni. “It’s not because we are excluding coal that we are really going to have a big impact on carbon emissions, but it’s an ongoing process and this is one step,” he said.Engagement and co-operation plansCPEG this week also announced that it was joining the internationally-oriented engagement group co-ordinated by Ethos. The Ethos Engagement Pool International carries out engagement programmes on a range of topics and sectors for its institutional investor members.The pension fund would also like to express its stance on climate change via impact investing, according to Haenni.He said CPEG was interested in exploring impact investing in Switzerland by inviting other asset owners to co-invest in domestic projects.Haenni emphasised that climate change was not a new consideration for the pension fund.Two years ago it embarked on a pilot energy efficiency project in its real estate portfolio, which saw it carry out more than 1,000 tenant visits and ultimately win the “Watt d’or” (“Golden Watt”) award from the Swiss federal energy department.Now, however, the pension fund wanted to implement climate change considerations across all asset classes, he said. “It’s always been important for CPEG but now we want to be an active member of the IIGCC [Institutional Investor Group on Climate Change].”CPEG joined the IIGCC in January.