May 2022

U.K. pools gaining critical mass, and investment choices

U.K. investment pools formed seven years ago to streamline the investment process for local government pension funds are now building up sizable assets, as well as facing challenges that range from diversification to climate change reporting. Local government pension schemes, or LGPS, "are still moving funds and the pools are still building up asset classes," said Colin Cartwright, an Aon PLC partner in London who consults with both LGPS and corporate clients. He expects to see more funds transferred into...

ESG factors increasingly put into hedge funds

Interest and investment in hedge funds that incorporate environmental, social and governance factors are on the rise among U.S. investors, although demand still trails that of European investors. While some hedge fund firms have included one or more ESG factors in their investment strategies for years or have created dedicated ESG funds, others still are evaluating the efficacy and return potential of investment in portfolio companies that meet ESG standards, sources said. "There are two ways to do ESG. You can...

An Impact Investing Guide for Private Foundations

Imagine that your foundation is dedicated to eradicating childhood asthma in your home state. One day, you are listening to the local news during your morning commute and you hear a report about an aging coal-fired power plant where the sulfur dioxide emissions are so bad as to be implicated in the high incidence of childhood asthma in the neighboring towns. A week later you are reviewing your foundation’s investment portfolio and realize that you own a good chunk of...

US. Allianz subsidiary pleads guilty over a $7 billion investment implosion.

The German insurance firm Allianz will pay more than $6 billion over the implosion of a group of hedge funds two years ago that stuck public pensions, religious organizations, foundations and other investors with heavy losses. Read also US. DoL Urged to Help Pension Plans Make Climate Impact An American subsidiary of the insurer, Allianz Global Investors U.S., pleaded guilty Tuesday to securities fraud for failing to stop the scheme, which came to light after the funds collapsed early in the...

Are pension funds transparent enough about their investments?

The latest report from the UN’s Intergovernmental Panel on Climate Change, published in April 2022, made clear that the window for preventing the worst of climate change is closing fast. Plans already in place are not enough to limit global warming to 1.5C above pre-industrial levels, said the report, and more must be done to accelerate the energy transition. These efforts will require huge levels of capital. The UN has estimated that $90trn in infrastructure investment alone is needed by...

UK. 12 pension funds launch EM climate collaboration

A group of 12 UK pension funds convened by the Church of England (CofE) Pensions Board have teamed up in a bid to find ways in which to support the climate transition in emerging markets. The schemes include the £83bn Universities' Superannuation Scheme; the £57bn BT Pension Fund; Railpen, which manages the £37bn of assets; the £35bn Brunel Pension Partnership; the £55bn Border to Coast Pension Partnership; Nest, which has £24bn; and the £30bn Legal & General Workplace Pension Plan...

Russia-Ukraine War Has U.S. Pensions Examining Long-Term Investment Sustainability

Russia´s invasion of Ukraine has caused  U.S. pension plan sponsors to focus on the long-term sustainability of their plan’s investments. U.S. sanctions imposed on Russia have caused U.S.-based pension funds to divest from or suspend allocations to the emerging market’s assets. But this will have narrow impacts to defined benefit plans’ risk and return outlooks, according to pension investment experts. “For most of our clients, their exposure to Russian securities is very small,” says David Eisenberg, outsourced chief investment officer leader at Buck. Many pension plans...

Nigeria. Pension fund assets now worth N13.88tr

Pension fund assets grew by N453.8 billion to a historic N13.88 trillion in the first of quarter of the year ended March 2022 (Q1 2022), and assets under management rose 3.38 per cent above N13.4 billion in December 2021. Data compiled by the National Pension Commission (PenCom) also shows that 12,336 Pension Fund Administrator (PFA) contributors switched their Retirement Savings Accounts (RSAs) between PFAs in Q1 2022. This is 4.2 per cent lower than the 12,874 who switched in Q4 2021...

US. Another crypto issue: Is there really demand?

The big question now for cryptocurrency investing in defined contribution plans is how amenable sponsors, participants and consultants will be to accepting these offerings to augment retirement savings. Even before Fidelity Investments announced a program that would let participants invest up to 20% of their 401(k) accounts in cryptocurrency, NEPC LLC detected a "meaningful increase from clients asking for education on crypto within 401(k) plans," William Ryan, Chicago-based partner and head of defined contribution plan solutions at the investment consultant,...

South Africa. GEPF signs new unlisted Africa investment mandate with PIC

The Government Employees Pension Fund (GEPF) and the Public Investment Corporation (PIC) have signed a new mandate related to unlisted developmental investments in Africa. The PIC confirmed the new mandate in a short statement on Tuesday, but did not reveal the value of the deal. However, Bloomberg reported that the agreement is worth around $1.6 billion (just over R25 billion If this figure is correct, then it is much lower than the GEPF’s previous unlisted developmental investment mandate with the PIC,...