Month: September 2020

Strathclyde to add drug royalty exposure after below-benchmark returns

first_imgThe £13.8bn (€17bn) Strathclyde Pension Fund saw returns of 7% over its 2013-14 year, falling marginally below its benchmark after suffering losses in both its equity and fixed income portfolios.The fund, which manages the pensions for the public workers and associated employers in western Scotland, saw losses of 7.4% and 7.3% in its emerging market and Asia ex Japan equity portfolios, and underperformed against its benchmark in UK, European and North American stocks.As a result, the fund grew by 7% over the year, but fell 10 basis points short of its benchmark.The fund allocated roughly three-quarters (75.6%) of its assets to equities, with 12.8% in fixed income and 9% in property. Despite its losses in segments of its equities and fixed income holdings, and singling out property as a performing asset, the fund reduced property exposure in support of traditional assets and remains overweight equities.It also said it expected to approve four separate investments, increasing its exposure to the renewable energy sector, and investing in a fund aimed at the drug royalty market.Its annual review revealed a deficit of £1.9bn and a funding level of 87.9%, although it showed a substantial improvement on the £2.6bn deficit at the end of March 2013.Positively, the fund returned 10.3% from UK equities and 17.5% from European stocks.Property returned 13.1%.In addition to losses in emerging market and Asian stocks, the fund also took a hit on its Gilt holdings and index-linked bonds.“Most bond markets fell over the financial year after the announcement of some reduction in quantitative easing by the US Federal Reserve,” the fund said.“Some of the highest investment returns were achieved in UK commercial property, where activity in markets outside London picked up markedly.”Strathclyde, the largest local government pension scheme (LGPS) in the UK, also provided firmer details for investments into renewable energy, wind energy and healthcare.Proposals have been submitted to board members seeking approval for an initial £45m seed investment into six different projects.It’s New Opportunities Portfolio, which seeks outs local real estate and real assets, is set to invest in a range of different renewable technologies via equity holdings and investments in limited partnerships.It is awaiting councilor approval for a seed $25m (€18.3m) investment into Healthcare Royalty Partners, a firm that specialises in purchasing drug royalty contracts.The investment, which aims for an internal rate of return (IRR) of more than 12%, purchases drug royalty agreements between large pharmaceutical companies and universities or smaller drug development companies, and taking over receipt of payments.The fund also adjusted its use of external managers, shifting allocations from Henderson Global Investors and Legal & General Investment Management (LGIM) to PIMCO.LGIM remains the fund’s largest external manager, with around £5.8bn in mandates, or 41.8% of assets.last_img read more


September 29, 2020 0

LaSalle invests in Amsterdam for Bavarian pension fund BÄV

first_imgLife Fund Syndication sold the 21,248 sqm property in Jodenbreestraat as German institutional capital rediscovers its appetite for Dutch commercial real estate.Last week, Patrizia said it was investing €578m in a Dutch residential portfolio for a German pension fund, the largest deal in the sector’s history. Patrizia’s WohnModul I fund, set up for a German pension fund in 2012, will buy the 5,500-unit portfolio by year-end.Savills, which advised LaSalle on the Jodenbreestraat deal, said the acquisition was Amsterdam’s second largest city centre deal since 2009, following Hamburg institutional HiH’s €90m purchase of Prins en Keizer earlier this year.BVK, the Bavarian umbrella pension scheme for self-employed professionals, has close to €60bn in total assets and is ramping up its global real estate exposure.It is currently investing in global real estate through a number of mandates, including two €500m global mandates by LaSalle and CBRE Global Investors, a pan-European core strategy managed by Invesco Real Estate, a global fund-of-funds strategy managed by UBS Global Asset Management, and two listed property strategies managed by LaSalle and Principal Global Investors. Bayerische Ärzteversorgung (BÄV), the pension fund for doctors in Bavaria, has bought a mixed-use property in the Netherlands for €80m.The building in Amsterdam was acquired by LaSalle Investment Management on behalf of BÄV, one of 12 institutions that make up Germany’s pension fund giant BVK.The deal, the first LaSalle has done for BÄV/BVK in Europe, comes a year after BVK awarded LaSalle a €500m mandate to invest in global real estate.Claus Thomas, international director for the client capital group at LaSalle, said: “Although the focus of our acquisition efforts for this mandate is predominantly North America and Asia-Pacific, this asset fits the strategy and complements the acquisitions we already have made in Australia, Canada and the US.”last_img read more


September 29, 2020 0

UK scheme funding boosted by stock markets, longevity changes

first_imgThe overall funding position of UK defined benefit (DB) schemes improved significantly in 2017, according to new figures. According to the Pension Protection Fund (PPF), total assets held by UK private sector DB funds grew by 7.7% over the course of the year, from under £1.5trn (€1.7trn) to nearly £1.6trn.Combined liabilities fell slightly, the PPF reported, to just under £1.7trn. This left an aggregate funding level of 94%, compared with 87% at the end of 2016.The data backed up similar research from consultants JLT Employee Benefits and Mercer, which both reported that asset growth outstripped increases in liabilities during 2017. Mercer found that the funding position for FTSE 350-listed company pension schemes improved marginally. Combined DB liabilities grew by 4.4% to reach £857bn, but assets rose by nearly 6% to £781bn. This left an aggregate funding ratio of 91% at the end of 2017, compared with just under 90% a year earlier.JLT reported similar findings in its estimate of the aggregate FTSE 350 schemes’ funding position, which it said rose from 91.6% to 93.7% during the year.Its data for all private sector DB schemes showed that the aggregate funding level rose from 89.2% to 91.5%.Charles Cowling, director at JLT Employee Benefits, said a slowdown in the rate at which longevity was increasing had helped rein in liability increases, as had growing expectations of interest rate rises.Alan Baker, partner at Mercer and chair of its DB policy group, said the funding improvement could release significant capital for companies to invest in growth rather than fund their pension schemes.“This is really positive news for the UK economy because improved profits in 2018 resulting from lower pension costs could amount to £400m among the FTSE 350 [companies],” he said.However, his colleague Andrew Ward, head of risk transfer consulting, said that “the levels of risks being taken are still significant and the positive outcome we have seen for 2017 is very closely linked to stock market performance”.“As we move into 2018, it’s important for individual schemes to consider how prepared they are for any market shock,” Ward added. “With Brexit-related uncertainty trustees need to consider the potential impact on their sponsor’s financial security.“Against this backdrop, we expect schemes to reduce risk and consolidate gains. The pace of risk management activity we saw in 2017 is likely to accelerate and we expect 2018 to be the biggest year ever for pension risk transfer.”JLT’s Cowling echoed Ward’s prediction, and added that increased appetite for buyouts could reduce the number of private sector DB schemes to fewer than 5,000 by 2020.The PPF said there were 5,588 schemes in its 7800 Index database at the end of December.Debates over DB scheme closures – including high profile cases such as Royal Mail, USS and Tesco – drew negative headlines in the UK national press last year as scheme sponsors sought to address large deficits.In addition, controversy surrounding the British Steel Pension Scheme’s restructure and government inquiries into the DB system drew attention to the shortfalls in many schemes.However, the latest funding data appeared to support the UK government’s assertion last year that there was no overarching funding crisis in the country’s DB system.last_img read more


September 29, 2020 0

‘Only big players will survive’, says Universal Investment CEO

first_imgBernd Vorbeck, CEO of Universal Investment“I think only the big players will survive,” he said.In the German market there were quite a few mid-sized companies, with assets ranging from €40bn to €200bn, but theirs was not “a real valid business position”, according to Vorbeck.A spokesman for Universal said the company differed from most of its competitors as they were specialised, for example either in fund administration or as an investment management company, while Universal was “a one-stop shop” for both investors and asset managers.Universal used to be owned by small German private banks but last year it was sold to Montagu Private Equity. Vorbeck said this was the first big move by a private equity company in the German fund market.The change of ownership may mean that, for the first time, the company could grow by joining forces with outsiders rather than organically.Vorbeck said that, with a private equity company as owner, the question of mergers and acquisitions is much more on the agenda and that Universal “could imagine pure synergy plays” or adding specialists to grow with “adjacent services”.It was “quite realistic” that a transaction like this could happen over the next few years, although Universal was not necessarily actively working towards this on a day-to-day basis.“We’re ready whenever an opportunity would be on the horizon,” said Vorbeck. The fund service provider sees room for growth both domestically and in Luxembourg, where it also has a fund service platform.Vorbeck said that in Germany there was still business to be had, but only for companies of sufficient size.“The only thing that counts in this environment is are you big enough, do you have enough money to invest, and do you have enough attention from your shareholder in your strategy,” he told IPE.He was referring to pressures stemming from the low interest environment, regulation and digitalisation. German fund service providers with less than €200bn in client money are unlikely to be able to survive the current market environment, according to the chief executive of Universal Investment, the country’s second-largest institutional fund provider. The company has a goal to raise its own volume to €500bn over the next four to five years and to be the leading fund service provider for all asset classes in Europe, said CEO Bernd Vorbeck.As at the end of its last fiscal year in September, Universal had €340bn of assets under administration, the bulk of which was for institutional investors (€278bn). Most of this was held in Spezialfonds, or master funds (€242bn).Universal is a big player in the market for so-called Master-KVGs, a fund service model used by mainly German institutional investors for the consolidated administration of assets held in Spezialfonds.  last_img read more


September 29, 2020 0

Investors request ‘urgent’ information from mining companies

first_imgIt follows two high-level investor round tables convened by the CEPB and Council on Ethics, with another meeting scheduled for May.The extractives companies have been asked to provide an overview of their tailings management system, and how they manage risk. They should also confirm whether their approach to tailings management has changed following Brumadinho and other disasters.More specific requested information includes:A list of all tailings storage facilities and their ownership;Height and storage volume;Date of latest independent expert review;Details of engineering records (design, maintenance, etc.)Concerns about stability; and Assessment of the impact of extreme weather events.If companies are unable to provide the information, the investors have asked that they explain why and clarify what action was being taken to address this. The disclosure, which should be signed by the CEO or board chair, must be published on the investee company’s website by 20 May.Companies were also urged to consider how to communicate the information to communities affected by the tailings footprints.Current disclosures ‘inadequate’ A CEPB spokesperson said: “This is an initiative designed to inform investors about the risks they are running in holding certain companies in their portfolio. We have asked for very clear information and investors will be able to see which companies have provided it.”Adam Matthews, director of ethics and engagement, CEPB, said: “The current disclosures from companies are largely inadequate. It is essential that investors can establish a clear line of sight on which company has which tailings facility and how it is being managed.”He continued: “We are working across the investment community and with expert input to create a global database to assess this information.”John Howchin, secretary general of the Council on Ethics, said: “The need for serious action is very clear. These tailings dams are here for eternity and we need to set a global system in place to handle them.”The letter, together with the questionnaire and list of supporters, can be found here. Further reading AP funds and Church of England to tackle global mining regulationsSwedish and UK asset owners to represent PRI and create international standards in wake of Brazil tragedyVale: Swedish funds cut mining giant from portfolios after dam collapseAP1 cuts €39m of investments as fellow mining giant BHP pledges support for improved standards The Church of England Pensions Board (CEPB) and Sweden’s AP funds have written to nearly 700 listed mining companies with an “urgent request” for information about their management of tailings dam facilities. Companies were requested to disclose the information on their website within 45 days. A list of the 683 companies receiving the letter is due to be published on the CEPB website after the deadline, together with their level of compliance. The move is aimed at providing a tool for institutional investors to assess the risk from their holdings in mining companies. It forms part of the global investor engagement in response to the recent Brumadinho disaster in Brazil, when 100 people were killed after the collapse of a dam used to store waste products (tailings) from iron ore mines.The letter was sent by the CEPB and the Swedish Council on Ethics for the AP Funds, and is supported by 96 investors with US$10.3trn (€9trn) assets under management, including APG, CalSTRS and the New Zealand Superannuation Fund.  last_img read more


September 29, 2020 0

Technology roundup: Blockchain-based fund trading system launches

first_imgInvestment technology company Calastone has launched its blockchain-based infrastructure for the trading and settlement of pooled investment funds.More than 1,800 financial services providers in 41 countries have been added to the system, dubbed the “distributed market infrastructure” (DMI). Calastone claimed this was “the largest group of financial services organisations ever to connect and transact on a live distributed ledger”.The company said in a statement that DMI users could “access a fully mutualised global funds marketplace” in which investment funds were traded and serviced in real time, potentially saving £3.4bn (€3.9bn) a year.“This will play a key role in stripping out the ever-increasing costs, operational burdens and risks inherent within the current model,” Calastone said. Campbell Brierley, Calastone’s chief innovation officer, added: “Through Calastone’s blockchain-enabled market infrastructure, all participants across the funds world can work together seamlessly and view trading activity in real time.“Information now ripples instantly across the market, a step change from the previous fragmented model. Financial services firms worldwide can, via the DMI, utilise new services, enhanced capabilities and new investment opportunities, allowing them to evolve their proposition to one that will be more competitive and valuable long term.”Calastone has been testing the blockchain-based technology for nearly two years. Early adopters of the DMI include back office service providers and wealth managers such as RBC Investor & Treasury Services, Bravura Solutions, Seven Investment Management, Multrees and Tilney Investment Management.Blockchain trading platform overhauls funding structureSeparately, the capital structure of Iznes, another blockchain-based platform for fund trading, has been overhauled after its technology provider went into administration.SETL, a fintech company that designed Iznes’ underlying technology, entered administration in March but this month re-emerged as a new corporate entity, according to reports.In a press release this week, Iznes said SETL had sold its stake in the company to OFI Asset Management – a founding investor in the blockchain platform – along with five other French asset managers, including Arkéa Investment Services, Groupama Asset Management, La Banque Postale Asset Management, La Financière de l’Echiquier and Lyxor Asset Management.Iznes acquired intellectual property rights connected to the technology and has hired SETL’s product management team with a view to internalising its IT function, the press release stated.Iznes was launched in March this year and already has €1bn of assets registered on its platform. It said the revised capital structure would allow it to expand its operations in France and Luxembourg to work with more asset managers.Further readingPension tech for dummies There is no shortage of new technologies that can improve retirement outcomes for pension fund members, reports Carlo Svaluto MoreoloData and processes: The IT diet Sophisticated data and analytics processes should drive better control in investment functionslast_img read more


September 29, 2020 0

Brisbane house prices tipped to rise 11pc in three years: QBE

first_imgHouse prices are tipped to rise 11.3 per cent in Brisbane by June 2021. Image: AAP/Darren England.The report found Brisbane’s affordability remains significantly more attractive than in Sydney, where house prices are forecast to fall 3.5 per cent in 2019 before bottoming in 2020, and in Melbourne, where they are set to drop another 4.2 per cent next year.More from newsParks and wildlife the new lust-haves post coronavirus16 hours agoNoosa’s best beachfront penthouse is about to hit the market16 hours agoBut the outlook is less rosy for Brisbane apartment owners, with unit prices set to fall by 5.1 per cent over the next three years as the oversupply of stock continues to be absorbed and demand from investors weakens.The median price for an apartment in Brisbane is expected to fall to $405,000 — the greatest forecast decline out of all capital cities. House prices are tipped to rise 11.3 per cent in Brisbane by June 2021. Image: AAP/Darren England.BRISBANE homeowners will be the envy of their southern counterparts over the next few years, with property price growth predicted to be the strongest in the country after Adelaide.House prices in the Queensland capital are forecast to rise by 11.3 per cent in the next three years, according to the latest BIS Economics Australian Housing Outlook commissioned by QBE Insurance.Brisbane’s median house price is tipped to grow to $615,000 by June 2021. RELATED: Rental demand jumps in Queensland Apartment prices in Brisbane are forecast to fall 5.1 per cent in the next three years. Photo: Claudia Baxter.Greater competition for inner-city apartments is tipped to cause investors to lower rents to try to draw tenants from more affordable city fringe locations.Competitive unit rents and prices due to the oversupply may encourage some potential first home buyers to remain as renters, or alternatively preference an apartment purchase over a house.QBE Lenders’ Mortgage Insurance chief executive Phil White said tighter lending restrictions had impacted property prices nationally. MORE: Home of Golden Gaytime inventor hits the marketcenter_img Phil White, chief executive of QBE. Picture: Supplied.“We anticipate foreign investment will further dampen in coming years owing to a number of factors such as increased approval fees, stamp duty and land tax surcharges, as well as tighter capital controls from foreign governments, most notably China, which have impacted how much money they can take out of their country,” Mr White said.But Queensland’s increasing population growth is expected to support buyer demand.The report is the only one of its kind in Australia that looks at what house prices will do over the next three years.last_img read more


September 28, 2020 0

Porter Davis wins at HIA Awards

first_imgPorter Davis has been awarded top prizes in the 2018 HIA awards in its two key states – Victoria and QueenslandIn Victoria, the team went home with the coveted Major Builder of the Year award, making this their second win in the past three years, and 12th win in its 19-year history.Up north, The Hayman 39 on display at the Ellendale display village in Upper Kedron took home first place for the Best Display Home in the $400,001 – $500,000 category.The pool-side alfresco area is perfect for entertaining in the warmer weather. Picture: SuppliedThis contemporary, resort-style home is inspired by a six-star villa in the Bahamas, with neutral tones and a pared-back palette complemented by pops of greenery throughout.Queensland State Manager, Grant Whinnett said, “We’re thrilled to be recognised for a prestigious HIA award…The recognition is testament to the design, layout and high quality finishes that customers can expect when they purchase or build a Porter Davis home.”The neutral tones and pared-back palette create a lush and inviting space. Picture: SuppliedThe Hayman design is a popular choice for Queenslanders, with the resort-style interior, alfresco eating area and adjoining pool combining to create the perfect space for warmer climes.The bright and breezy design, spread over two levels, is the ideal space to entertain family and friends.More from newsParks and wildlife the new lust-haves post coronavirus15 hours agoNoosa’s best beachfront penthouse is about to hit the market15 hours agoVictorian builder, Porter Davis began building in Queensland in 2016, and since that time have built more than 120 homes along the south-east corridor.They’ve also recently opened World of Style in Fortitude Valley – an innovative and immersive design centre. Taking people one step further than the typical display-home experience, World of Style allows you to examine multiple design styles under the one roof, while receiving help and guidance from qualified interior designers.The Hayman 39 is on display at the Ellendale display village in Upper Kedron. Picture: SuppliedThis is the second year running that Porter Davis Queensland has celebrated an HIA win, with its Marriot Grange taking out Best Brisbane Display home in the over $500,001 category in 2017.last_img read more


September 28, 2020 0

Renovation transforms dated Gold Coast house into luxury mansion

first_imgAfter: Impressive water views are a real highlight of the home.The family are starting another project after the process “opened another door” and sparked a new hobby, especially for Dr Singh.“It’s going to be emotionally very disappointing to lose it,” he said. “It’s my dream house.”The six-bedroom mansion at 31 San Simeon Drive is set to head under the hammer on August 31 through Jeffrey Sturgess and Colleen Brunt of Amir Mian Prestige Property Agents. After: It’s now very grand and very opulent.“It’s a lovely house, the location is beautiful but it was a very dated house when we got it,” Dr Singh said. “The beauty of the place was the cul-de-sac location with the most amazing view of the Hinterland and wide water views. “From the moment I saw it I was like, ‘I have to buy this house’.” A complete overhaul through an architect ensured the house set a new benchmark in luxury living. More from news02:37International architect Desmond Brooks selling luxury beach villa10 hours ago02:37Gold Coast property: Sovereign Islands mega mansion hits market with $16m price tag1 day ago“The aim was creating something to maximise the view and in order to do that I wanted to add a third level,” Dr Singh said. “There are 360 degree views from the third floor, so we had the existing view and now the view of Surfers and Broadbeach.“The one thing the house didn’t have was high ceilings and the lounge area was very dark so we created high ceilings. “They bring a massive amount of light in and now it’s a very open home with lovely lighting and beautiful outlooks.” Before: Five years ago 31 San Simeon Drive was a very different property. Before: The kitchen area went from dated and drab … After: The luxe living area now.The second level is home to two ensuited bedrooms, plus the main with a walk-in wardrobe, ensuite and private balcony. An executive office with a balcony is also here.The third floor is a versatile spot with a balcony, kitchenette and impressive views. After: They are now modern and sleek. Before: The entrance to the home looked very different. MORE NEWS: Popular pad more than an online phenomenon After: … to fine and fab.The opulent home makes a grand statement with a double-height entry encased in glass, a chandelier and soaring ceilings. The living area is warmed by an open fireplace with a feature black marble flume — a natural material used alongside spotted gum and leather-washed stone throughout. This space flows through to a dining area, kitchen and family zone, all connected effortlessly with the outdoor entertainment areas. The sleek kitchen features a large breakfast bar and island bench, stainless-steel appliances and a butler’s pantry. Sliding doors open out to the rear deck where uninterrupted water views take centre stage. The space wraps around to the pool and covered alfresco area. A soundproof cinema with tiered seating, three bedrooms, the laundry and a games room with a bar complete the main level. Artistic flair is added throughout, including black cutout feature walls to create a hallway and statement pendant lighting. Before: The bathrooms definitely had one of the biggest transformations. Before: One of the living areas pre renovation. After: Its owners completely redesigned the home. Wait until you see what this Clear Island Waters mansion once looked like.THE incredible transformation of this Clear Island Waters house was what ignited a local children’s brain specialist’s passion for renovating.Taking the property from a dull and dated waterfront house to a luxe and unique mansion was done at the hands of Dr Harry Singh and his family. The Gold Coast paediatrician and paediatric neurologist, his artist wife Lindsay, their daughter Grace, 22, and nephew Angaz, 19, have lived at the property for five years. MORE NEWS: Builder’s former holiday home hits the market last_img read more


September 28, 2020 0

Full-floor apartments in blue-chip suburb a hit with buyers

first_img Imagine waking up to this view.Mr Mullan said each of the five whole floor apartments featured a contemporary mix of premium stone tiles, solid oak timber flooring and select carpet with dual bond underlay.Located within the riverside precinct of Oxlade St, New Farm, Mr Mullan’s latest development seamlessly connects to everything in the sought-after suburb.“We chose the site for 160 Oxlade as it sits at the heart of everything that makes New Farm wonderfully New Farm – the river, the boardwalk to the city and the recently completed Howard Smith Wharves, fine dining, bars and coffee shop,” Mr Mullan said.“This development is perfect for empty nesters who gravitate to the area for all its lifestyle benefits. “There’s big demand as demand is high for units with access to the Brisbane River and city views. We have had very strong demand from empty nesters and downsizers who are most definitely our target demographic.” Country home for under $400K MORE QLD REAL ESTATE NEWS: 160 Oxlade at New Farm.Five luxury whole-floor apartments at New Farm’s Oxlade St have been launched to the market with multimillion-dollar price tags.The latest project, 160 Oxlade, by Brisbane property developer John Mullan, of JG Mullan Constructions, is nothing short of stunning. Record-breaking Brisbane home sells again 160 Oxlade at New Farm is nothing short of stunning.And it’s not the first time Mr Mullan has developed full-floor apartments in the area.On the back of Mr Mullan’s other successful Boardwalk Residences – also in New Farm – 160 Oxlade has been lavishly finished with the finest materials from floor to ceiling.With two top-floor apartments under offer before the project launched, Mr Mullan said buyers expected a very high level of finish.center_img The kitchen area at 160 Oxlade at New Farm. Inside Qld’s mega mansions More from newsParks and wildlife the new lust-haves post coronavirus10 hours agoNoosa’s best beachfront penthouse is about to hit the market10 hours ago 160 Oxlade at New Farm. Mr Mullan said an old, dilapidated house had been on the site when he bought it.Ray White marketing agents Hamish Bowman and Tom Lyne said early interest was solid for the project, especially as two apartments had sold off-market.“This is exactly what every downsizer is looking for. They want larger floor plates so it’s not cramped and you may never even see your neighbours,” Mr Bowman said.“Over the next seven years, five million Australians are forming part of this downsizer movement — the Baby Boomers are now moving on — and the higher, pointy end are moving into select prestigious positions and projects like 160 Oxlade Drive.”Mr Bowman said because the development did not include communal facilities the body corporate fees were low.He said with early construction, buyers could custom design the interior of their apartments.A display suite is ready to view and interested buyers have the opportunity to meet with the architect John Cunningham, the developer and interior designer on request.last_img read more


September 28, 2020 0