January 2023
11Jan

US. Investors’ resolve to forge ahead with ESG goals deepens for 2023

Russia's invasion of Ukraine and anti-ESG sentiment in the U.S. taught institutional investors to expect the unexpected in 2022, but those developments also deepened their resolve to forge ahead with sustainable investing goals — no matter what happens in the upcoming year. In 2023, institutions' ESG goals will include more specific expectations placed on companies to address climate risk, labor and human rights issues including diversity, and biodiversity, investors said. Many of them also plan to make a more direct...

January 11, 2023
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09Jan

How world’s biggest funds are preparing for a cash crunch

In a year of disease, war and inflation, one event struck fear into the heads of Australia’s super funds more than any other. That was October’s UK pension crisis which, had it not been for the intervention of the Bank of England, would have rendered many pension funds insolvent. While most Australian super funds would say they think deeply about ensuring they are never caught without enough emergency cash, that episode brought home just how quickly a liquidity crisis can evolve. The...

January 9, 2023
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06Jan

UK. Retirement investors rethink plans amid challenging economic climate

Just under half of retirement investors (49.6 per cent) have rethought their retirement plans or strategy in response to the challenging economic climate, research from AJ Bell has revealed. AJ Bell’s customer survey 2022 revealed that 50.4 per cent of respondents stated that the challenging economic climate had not changed their retirement plans or that they were too far away from retirement to be affected. Of those who indicated that their retirement plans had been affected, the most common response was...

January 6, 2023
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05Jan

Investing novices call the shots on $4 trillion at public pensions

Canada selects directors to oversee its public pension funds for their financial expertise and pays some six-figure salaries. In the Netherlands, board members must obtain approval from the central bank. In the U.S., a lineup of unpaid union-backed reps, retirees and political appointees are the vanguards of a $4 trillion slice of the economy that looks after the nation’s retired public servants. They’re proving to be no match for a system that’s exploded in size and complexity. The disparity is dragging...

January 5, 2023
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04Jan

UK. Solving the Liquidity Factor for Alternative Investments in DC Plans

One of the main reasons that plan sponsors have been hesitant to bring alternative assets into defined contribution plans is concerns about the liquidity of such assets. Private real estate, for example, which has become the most common alternative investment within defined contribution plans, is at its core an illiquid asset. Part of the reason that it’s a less volatile investment than traditional securities is that it’s typically only valued once per quarter, making it even harder for asset managers...

January 4, 2023
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04Jan

Here’s why we must not lose sight of the importance of ESG, despite the recent backlash

The consideration of environmental, social and governance (ESG) factors when making investment decisions has never faced such a profound period of negative scrutiny. After years of increasing attention and capital allocated to ESG investments, which have made substantial strides forwards in terms of technical substance and implementation expertise, 2022 proved to be a point of reflection. There are several drivers behind this wave of criticism. The combination of the impact of Russia's invasion of Ukraine, inflation and pockets of populism emerging...

January 4, 2023
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03Jan

UK. Industry criticises 2022 as an adverse year for pensions

Results from our last Pensions Buzz survey of 2022 revealed 54% of respondents felt the last 12 months have not been positive for the industry, against 36% who disagreed and 14% who voted don't know. Of the respondents who said 2022 had not been a positive year, several pointed to the liability-driven investment (LDI) crisis as a result of September's Mini Budget. One respondent said: "The LDI crisis was very damaging. Stock market has been volatile, pension valises have fallen and...

January 3, 2023
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02Jan

OECD says pension funds must take ‘extreme care’ with liquidity risks

Pension funds should be “extremely careful” when investing in illiquid assets, as rising interest rates and falling stock markets increase the likelihood of their having to access cash quickly, the OECD has warned. In the recent era of low interest rates, pension funds poured money into alternative investments, such as infrastructure projects and private equity, in an effort to escape the low yields available on government bonds. But such investments are typically illiquid, meaning the funds cannot quickly convert them...

January 2, 2023
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December 2022
30Dec

5 Threats to Sustainable Investing in 2023

A term that went from euphoria to criticism. That has been the parabolic path of sustainable investing in recent years. Now, investors wonder what’s in store for environmental, social and governance (ESG) investing in 2023, and more importantly, what the threats to ESG might be. “Sustainable investing and the consideration of ESG factors have become part of the investment mainstream over the past few years. The rapid growth has been spurred by the need for investors to consider nonfinancial risks...

December 30, 2022
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29Dec

U.K. Investors must innovate to stay ahead of FCA’s SDR proposal

The FCA’s new sustainability disclosure requirements may prove to be a defining moment for financial services, the chief project officer at the Global Returns Project has said. Jack Chellman told FTAdviser the FCA’s rules, which are currently being consulted on, cannot come soon enough. “Investors are increasingly concerned about greenwashing,” he said. “Looking ahead to 2023, asset managers must embrace innovative approaches to demonstrate their sustainability credentials if they are to satisfy their clients and rise to the challenge of constructing attractive, competitive...

December 29, 2022
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