February 2021
03Feb

US. GameStop frenzy has hedge fund managers rethinking next moves

Retail investors' frenzied attack on short sellers during the week of Jan. 25, which saw U.S. equity trading by volume hit a record high, is forcing some hedge funds to rethink their strategies and approaches to investing. Sources fear that generating alpha from short positions — and the wider hedge fund industry — may be damaged by the episode. Hedge funds may have to invest more in large-cap stocks rather than small cap, keep their positions better hidden from...

February 3, 2021
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03Feb

Global Equity Release Market Set To Triple By 2031

International research published by EY predicts that the global equity release market could more than triple over the next decade. The Global Equity Release Roundtable 2020 survey report analyses information from market leaders across 13 different countries (including Heartland Reverse Mortgages in Australia and New Zealand). According to the data, the growth potential of this market is huge. Over $15bn of equity is currently released per year globally, and by 2031 this is expected to surpass $50bn annually. That’s...

February 3, 2021
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03Feb

PGIM Real Estate raises £190m to launch UK Affordable Housing Fund

PGIM Real Estate has launched its UK Affordable Housing Fund, with an initial capital raise totaling £190 million, from the Northern LGPS and Brunel Pension Partnership. The open-ended income-focused UK Affordable Housing Fund targets a total return of 6-9% per annum, net of fees and costs, by investing in and developing affordable homes for working people and families across the UK. The Fund is also able to leverage, giving it the potential to deploy up to £250 million at...

February 3, 2021
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03Feb

US. AIG to pay New York $12M for unlicensed pension risk transfer business

American International Group (AIG), the multinational finance and insurance corporation, owes the state of New York $12 million in penalties for insurance law violations stemming from its pension risk transfer (PRT) business. Linda A. Lacewell, Superintendent of New York’s Department of Financial Services (DFS), announced the penalty on Monday. She said an investigation from her department revealed that a subsidiary of AIG solicited and did insurance business in New York without a license. “A DFS license offers consumers peace...

February 3, 2021
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03Feb

U.K.’s Sunak to Protect Pensioners With Triple Lock Pledge

U.K. finance minister Rishi Sunak is planning to keep the government’s promise to increase the state pensions of millions of elderly people by at least 2.5% every year, saving a flagship policy despite the costs. According to a person familiar with the matter, the Chancellor of the Exchequer will retain the “triple lock” guarantee to raise the state pension by the highest of three measures: annual growth in average earnings, inflation, or 2.5%. Around 12.5 million people receive the...

February 3, 2021
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02Feb

U.K. firms sponsoring DB plans comprise big chunk of profit warnings

Almost two-thirds of listed companies sponsoring defined benefit funds issued a total 249 profit warnings last year, accounting for 43% of all U.K. profit warnings made in 2020. The latest EY quarterly analysis of profit warnings found that 10% of those firms with a DB fund issued their third consecutive profit warning in 2020 — often a precursor to insolvency. EY analysis shows that, typically, 1 in 5 firms issuing three warnings within 12 months will become insolvent within...

February 2, 2021
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02Feb

Puerto Rico Government Plan-to-Private Plan Rollovers Allowed

On January 20, 2021, the Puerto Rico Department of the Treasury (Departamento de Hacienda, commonly known as “Hacienda”) issued Administrative Determination No. 21-01 (AD 21-01), which provides that lump-sum distributions from the retirement plan for Puerto Rico government employees are eligible for direct and indirect rollovers into Puerto Rico–qualified retirement plans maintained by private-sector employers. In practice, however, this determination is unlikely to have much of an impact on the operation of private-sector employer plans. Background Since the 1940s,...

February 2, 2021
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02Feb

Ireland. ISME looking for donations to argue for fairer pensions

Isme is calling on private sector workers across the country to donate money to support a campaign to create an equitable system for private sector pension savers. The Irish SME Association (Isme) is looking to raise €500,000 to support three plaintiffs who will challenge tax discrimination against private sector workers before the High Court, arguing that the pension system favours public sector workers. The funds raised will support the formation of a technical team giving tax guidance, pensions expertise,...

February 2, 2021
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01Feb

Kenya: Public Servants Take Salary Cut in New Pension Plan

Civil servants, teachers and security forces are having to re-organise their budgets after taking a two per cent cut on their January payslips. The deductions will go towards financing the State workers' newly introduced mandatory retirement savings plan, known as the Public Service Superannuation Scheme (PSSS). Retired public servants have been receiving lifetime pensions paid directly from the exchequer, but the new scheme will see them now shoulder a portion of the ballooning pension burden that hit Sh109 billion last year. The...

February 1, 2021
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01Feb

UK. Corporate bonds could offer ‘untapped potential’ for sustainable pension investments

Corporate bonds could offer “untapped potential” for improving the sustainability of investments, despite a "notable" absence of sustainable-labelled buy and maintain corporate bond strategies, analysis from LCP has found. The firm explained that with defined benefit (DB) pension schemes gradually maturing and de-risking, holdings of bonds are set to increase, with many companies using the corporate bond market to raise cash as an alternative to issuing new equity at the same time. This in turn has seen a “steady flow” of...

February 1, 2021
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