Dual investment objective a ‘big challenge’ for Ireland’s reformed NPRF

first_img“The concept of impact investing is emerging, but, for sovereign funds to have both return objectives and to support economic activity is quite a new development,” O’Callaghan said“We will need to find ways to estimate in advance and monitor the economic impact our investments are having and to report this to the trustees.”The NPRF has been split into two discrete portfolios since the Irish government used its capital to bail out Allied Irish Banks and Bank of Ireland.Since the current government announced its intention to reorientate the discretionary portfolio, still controlled by the NPRF Commission and invested in global equities, fixed income, property, commodities and infrastructure, the fund has been gradually selling off overseas holdings – recently resulting in the sale of €800m in private equity fund holdings and commitments to Lexington Partners.It has already allocated significant capital to projects targeting Ireland, including a €500m commitment to three funds offering assistance to the country’s SMEs and a $100m joint venture with China’s CIC.For more on the Ireland Strategic Investment Fund’s future strategy, see How We Run Our Money in the current issue of IPE The Irish National Pensions Reserve Fund’s (NPRF) imminent reorientation into the Ireland Strategic Investment Fund (ISIF) poses significant challenges, both in the shape of ensuring independent governance and meeting its new dual investment target, the fund’s investment director has said.Eugene O’Callaghan, who since 2010 has overseen the NPRF’s investment activities, said the proposed ISIF would have “no hope” of attracting matching co-investments unless it were able to demonstrate the independence of its governance arrangements.The former executive director of Irish Life Investment Managers told IPE’s How We Run Our Money that the ISIF, to be funded with the €6.8bn currently held within the NPRF’s discretionary portfolio once the Irish government passes the required legislation, would face further hurdles due to its dual investment objectives of encouraging domestic growth while producing positive returns.He said this “double bottom line” would prove a significant challenge.last_img read more

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Swedish buffer funds put four-year limit on talks with ‘sin’ stocks

first_imgThe Ethical Council of the Swedish AP buffer funds is now putting a time limit on talks with companies that allegedly violate ethical conventions.In its annual report for 2013, the Council, which consists of representatives from AP1, AP2, AP3 and AP4, said reactive dialogues with companies that had verifiably breached a convention would go on for no more than four years. After that, if there has been no improvement, the funds will divest the company, it said.Until 2014, the Ethical Council had placed no time limits on the reactive dialogues it held since it was set up in 2007. Chairwoman of the council Christina Kusoffsky Hillesöy said: “The reason for the new working method is that a number of dialogues have lasted for many years without resolution.”She said this had not only used extensive resources but also attracted external criticism.As an example, she said the council had taken part in a “resource-heavy” dialogue with Walmart for seven years before recommending in 2013 that the AP funds divest.“We failed to achieve our objective and concluded that the probability of succeeding was not great enough to justify using additional resources,” she said.The Council is also adopting a more flexible description of objectives in order to deal with companies where problems fall into a grey zone.“We have realised it is difficult to stick to strict targets for a dialogue because the reality is rarely a matter of black or white,” Kusoffsky Hillesöy said.The new engagement process consists of four types of dialogue that are colour coded according to the seriousness of the ethical concern.The council said it focused last year on the areas of human rights, business ethics and environmental issues in the telecommunications, pharmaceutical, tobacco and cocoa industries. It concluded eight reactive dialogues, it said, with four ending in objectives being met.The companies involved in these successful talks were AES, Toyota, Alstom and Veolia.However, talks with Freeport McMoRan, Incitec Pivot, Potash and Walmart ended with the companies being recommended for exclusion by the AP funds.last_img read more

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Calpam wins Pensioen Pro award for Best Pension Fund in Netherlands

first_imgCalpam pension fund has received the Golden Pensioen Pro Award for Best Pension Fund in the Netherlands 2015. A public jury selected the €60m scheme – with just over 300 participants – from a shortlist of three pension funds.The Stichting Calpam-Pensioenfonds has a “simple” investment policy, without derivatives but with full matching cashflow.The scheme is up to date on indexation and has always been able to grant inflation compensation drawn on the the full consumer index. Despite the employer’s paying the full contribution for its 50 active participants, the pension fund still has a funding rate of approximately 160%.The awards, organised by IPE sister publication Pensioen Pro and financial daily Het Financieele Dagblad (FD), were presented in Amsterdam by political commentator Ferry Mingelen.Following nominations by an expert jury, the readers of Pensioen Pro and the FD, as well as listeners to BNR News Radio, pick the winner of the Golden Award.The Stichting Calpam Pensioenfonds, the Nedlloyd pension fund and the ABN AMRO scheme each won a Silver Award for the best small, medium-sized and large pension funds, respectively.The €373bn civil service scheme ABP – the largest pension fund in the Netherlands – won the Best Long-Term Investment award for its European hydro-electric power plant investments. The award for Best Investment Policy went to the Philips pension fund, while PWRI, the scheme for disabled workers in the Netherlands, received the prize for Best Customer-friendly Scheme.BpfBouw, the €53bn industry-wide pension fund for the building industry, took home the award for Extraordinary Industry Contribution due to its investments in Dutch care properties.The Dutch Pensions Federation and the Association of Insurers (VvV) jointly received the Innovation Award for Pension 1-2-3, a communication tool that provides clear and layered pensions information.last_img read more

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National LGPS framework targets State Street replacement and more [updated]

first_imgKeogh added: “The requirements have been expanded to cover the areas such as portfolio monitoring for individual funds and potentially for the LGPS pools, and also investment cost-monitoring services.“And so we are wrapping up those individual strands into a new framework.”State Street no longer provides investment benchmarking to the LGPS generally, having since March 2016 discontinued its performance-measurement services for third-party clients in the UK and the Netherlands.Keogh said the new framework agreement would be multi-lot and multi-provider.As with other national frameworks, this one would be accessible to all LGPS, with a view to making it attractive for the asset pools being formed as well.“We are hoping to frame this in a way such that LGPS pools can access those services should they wish to,” said Keogh.The procuring group aims to issue an invitation to tender in early November. [Updated] Nick Wright, head of global services UK, State Street, told IPE that although State Street decided to stop offering its performance measurement services on a standalone basis to third party local authority clients in the UK, it is still providing these to clients that subscribe to its asset services as part of the provider’s focus on the “end-to-end solution”. * Carmarthenshire County Council, Essex County Council, the London CIV, Staffordshire County Council and Wirral Metropolitan Borough Council Norfolk County Council is preparing to launch a national framework for the UK local government pension schemes (LGPS) for the provision of investment performance and cost monitoring and reporting services, a move initially fuelled by State Street’s decision to drop its benchmarking service for the LGPS sector.Norfolk County Council – acting on behalf of itself, four other local authority pension fund administering bodies and one asset pool* – communicated its intention to the market by way of a prior information notice last week.Nigel Keogh, national LGPS frameworks manager at Norfolk County Council, told IPE the group began discussing launching a new framework after State Street decided to discontinue its local authority pension fund universe analysis service.Over time, however, “the conversation moved on to cover related services”.last_img read more

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Low-cost investment research ‘unsustainable’, managers claim

first_imgMiFID II represented the “biggest change to the research space in decades”, said Vicky Sanders, co-founder of RSRCHXchange.Her colleague, fellow co-founder Jeremy Davies, added that three-quarters of the managers and analysts questioned said they saw the current low price for research as unsustainable.“When people pay low prices they worry they will get what they pay for,” he said.Last week, a separate report revealed brokers’ fees had dropped by almost 20% as a result of the introduction of the new rules, which took effect from 3 January.  Despite this, there was much willingness within the market for research costs to rise.“People believe that market forces will resolve many of these issues,” Davies said. “If you pay $10,000 less then it is not sustainable to receive the same quality of research. Most people say to us that, ‘we have a fiduciary duty to pay the price that we are asked to pay’.”The RSRCHXchange report also raised questions as to whether coverage of smaller companies might suffer post-MiFID II.“You have to look at the short- and long-term effects,” Davies said. “Historically, research coverage has tracked liquidity; it has not tracked alpha.”Gary Baker, managing director at the CFA Institute, a decline in the research coverage of small- and mid-cap companies could prove one of the outcomes of the implementation of the new regulations.“One of the concerns around MiFID II is whether it will be detrimental in terms of the coverage of small caps,” Baker said. “This is something that we are interested in monitoring going forward, particularly to watch whether it drives the research capacity out of the small-cap market.” MiFID II will drive down the quality of investment research with coverage of smaller companies suffering as a result, according to a survey of global fund managers.According to RSRCHXchange – an investment research aggregator – asset managers were concerned about how the unbundling of research and trading costs under the new regulations might impact investment information.Just under half of the analysts and fund managers surveyed said they felt “worse off as a result of reduced access to research”, the report noted. A further 63% said they now took fewer meetings with sell-side research analysts.The company surveyed 418 professionals collectively responsible for roughly $30trn (€25trn) of assets.last_img read more

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Joseph Mariathasan: Accessing China’s bond markets

first_imgAccessibility to China’s currency and bond markets is good, but faces significant challengesForeign accessibility is reasonably good for China’s onshore bond, foreign exchange, and derivatives markets, but after resolution of delivery versus payment settlement and block trades, the IMF identifies five other practical issues.Unclear tax regulations: In November last year, the Chinese authorities announced a three-year exemption on foreign institutional investors’ withholding tax and value-added tax (VAT) on interest derived from China onshore bond investments. With insufficient details released, however, investors have concerns over issues such as potential tax clawback of previous investments, and future tax treatment after the exemption period expires.Hedging capacity and documentation issues: Foreign public sector investors are allowed to access China’s interbank foreign exchange and interest rate derivatives markets without restrictions (in theory), but actual participation by foreign investors remains low.Insufficient treasury bond liquidity: Like any government bond market, a sufficiently liquid secondary market is a key prerequisite for the government bond yield curve to become a representative benchmark for economic conditions and activity. On-the-run China government bonds and policy financial bonds are already fairly liquid, but the IMF reports that gaps between on- and off-the-run bonds are wide, and the turnover of China onshore bonds remains low relative to global and some Asian peers.“The lack of sufficient liquidity in the China government bond market is the second-biggest hurdle for China bonds to be included in global bond indices,” the fund states.Lack of harmonisation: Four programmes have been set up to enable foreign investors to access China onshore bonds – QFII, RQFII, CIBM, and Bond Connect. Each has different rules and accessible securities, and as none of the programmes are developments of previous schemes, foreign investors are faced with a separate setup to access each new programme.This not only creates confusion, it also puts early movers at a disadvantage, as new programmes are more flexible than the old ones, with no mechanism in place to transfer from one to another. Not surprisingly, the IMF finds that many investors prefer to delay investing until they feel that no more new programmes will be introduced in the foreseeable future.Finally, there is also the problem that non-financial corporations cannot access the bond markets under the current access programmes.These hurdles are clearly strong impediments to the growth of foreign access to China’s bond markets. Perhaps the most frustrating aspect of them is that they are practical, rather than regulatory, issues.The IMF is right to declare that “resolving these issues in a timely manner, while avoiding introducing new uncertainty and practical hurdles as capital markets are opened further, is crucial to securing international investors’ commitment to China’s capital markets”.For investors, the prize is that, according to Dehn, “Chinese bonds are superior to US government bonds as a ‘safe haven’ destination for emerging market investors during major episodes of risk aversion”.By accessing Chinese bonds during bouts of volatility, emerging market debt investors will no longer need to pull money out of the asset class when they get scared, argues Dehn. That may be another reason for increasing weightings to emerging market debt, and taking advantage of the retreating tsunami of quantitative easing-induced misvaluations.Further reading‘Too big to ignore’: The rise of China’s $12trn bond market Global index providers are expected to open up to the $12trn (€10.4trn) domestic bond market in the next two years, according to QIC Investment Management. Despite China now being a main contributor to global trade and product integration, financial sector integration has been limited and China’s financial system, despite its size, also remains largely bank-based. The IMF says this is likely to change, and the bond markets will play a critical role. For foreign investors, it is a market that cannot be ignored despite the current challenges of access.The problems “Investors should rejoice at the prospect of greater access to Chinese fixed income,” declared Jan Dehn, global head of research at Ashmore in a note to investors last year.However, there are still a number of obstacles to gaining easy access to the country’s bond markets, as the IMF lays out in a recently released analysis.Interest from foreign investors in onshore bond holdings is certainly increasing, reaching a new record high of RMB1.7trn (€230bn) in 2018, more than double the year-end 2016 level, according to the IMF.But foreign ownership of China’s onshore bond market still remains low at just 2.1% as of September 2018. The IMF also points out that foreign ownership of onshore government bonds, at 7.4%, is also materially lower than for other special drawing rights currencies (namely the yen, dollar, euro and sterling).last_img read more

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Gold Coast’s property market in for a bumper selling season

first_imgThis Tallebudgera Valley property sold last week for $2.45 million. The Gold Coast’s million-dollar suburbs have seen strong property growth in the past year.REIQ Gold Coast zone chairman Andrew Henderson believed these suburbs, and those surrounding them, would continue to perform well given their location and amenities.While they were older suburbs, he said they were being reinvigorated.“Those areas are going through stages of renewal,” he said.More from news02:37International architect Desmond Brooks selling luxury beach villa15 hours ago02:37Gold Coast property: Sovereign Islands mega mansion hits market with $16m price tag2 days ago“It obviously then entices people to build new houses, which helps that property growth.”This year’s top sale was recorded at Mermaid Beach when billionaire Clive Palmer splashed $12 million on a Hedges Ave mansion. The $12 million sale of this Hedges Ave mansion marked the highest sale this year.Plenty of local buyers are on the market for their dream home but there are also many interstate and overseas buyers showing more interest in the city following the success of the Commonwealth Games in April, which has helped boost exposure of the region.Property experts believed the city was in for a bumper selling season following the market’s success in the past year.So where should house hunters be looking? The Bulletin has put together a glossy magazine, Sold On Gold Coast, as a guide for buyers.It features expert advice on selling, buying and investing as well as the latest property data from every suburb on the Gold Coast.It explores a range of suburbs and locales featuring luxurious beachfront homes to premier waterfront estates and hinterland properties with breathtaking views. Pick up a copy of your Gold Coast Bulletin today to get a copy. center_img Pick up a copy of the Sold On Gold Coast magazine inThe Bulletin today.THE Gold Coast property market may be starting to flatten after years of growth but many million-dollar suburbs are bucking the trend.Latest CoreLogic data shows Tallebudgera Valley has seen the highest house value growth with the median price jumping 32 per cent in the past year to $1.09 million.Mermaid Beach was second with the median price increasing 8.5 per cent to $1,567,500 followed closely by Bundall at 5.9 per cent.last_img read more

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Landlords: How safe is your rental property?

first_imgIs your rental property up to scratch when it comes to fire safety? The Queensland government has updated its smoke alarm regulations with vital revisions for landlords. As of January last year, legislation requires all rental property owners to install interconnected photoelectric smoke alarms throughout the dwelling.While this is standard for all Queensland homes, rental properties must meet these obligations by January 1, 2022.Here’s everything you need to know to get cracking.If an alarm isn’t working, landlords are responsible for replacing it immediately. Picture: Kate HunterGet new smoke alarmsCommunity Engagement Manager of Queensland Fire and Emergency Services (QFES) Inspector Alan Musk says photoelectric alarms are replacing ionisation models as the preferred type for residential properties.While ionisation types detect heat, photoelectric alarms detect smoke offering occupants a greater chance to address and escape fire threats, he explains.Landlords are required to replace their alarms with photoelectric models and ensure they are interconnected to respond simultaneously to hazards. The new laws require each alarm to be either be hardwired to the main electrical source and have a back-up battery, or powered by a 10-year non-removable battery.Check expiry datesInspector Musk urges landlords to double-check the expiry date of their current alarms.“Smoke alarms have a 10-year life. They normally have an expiry date on them and if they’ve expired you have to replace them,” he warns.Similarly, if an alarm isn’t working, landlords must replace it immediately.Where to put your alarmsThe new regulations state an alarm should be placed in every bedroom and along hallways connecting them. If the house has multiple levels, an alarm must be placed on each storey.Finally, place an alarm along the ‘exit route’ or near the point of exit, Inspector Musk says.If installing new alarms or building a new property the alarms should not be placed within 30cm of a wall or light fitting, or 40cm from an air-conditioning vent or the blades of a ceiling fan. Furthermore, try to keep them slightly removed from windows or doors that could enable air flow to intercept the early detection of smoke.What to do if you’re getting new tenantsIf leasing a property to someone new, landlords must clean and test the smoke alarms at least 30 days before the tenants move in.Smoke alarms must be cleaned and tested before new tenants move in. Picture: Kate HunterIf a hardwired alarm needs replacing, you must replace it with a photoelectric model in accordance with the new regulations, Inspector Musk confirms.Obligations of the tenantThe person living in the home is required to clean and test alarms at least once a year, replacing any dead batteries. If there’s something else wrong with the device, the tenants should contact their landlord or property manager immediately so the issue can be rectified.“The real estate agent can often organise for a contractor to come through and ensure you meet the legislation, that the smoke alarms operate and the batteries are fine,” Inspector Musk says. “This should happen around once a year.”All information provided by Queensland Fire and Emergency Services.last_img read more

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Acreage blocks are selling hot at Yatala

first_imgThe house at 14 Alto Tce, Yatala, sold for $859,000.PIES aren’t the only things selling hot at Yatala — with acreage property flying off the market.Doleman Property Group director Donna Doleman said this property, a four bedroom, two bathroom, lowset brick house on 5058sq m attracted about 30 groups and two written offers.REAL ESTATE: 14 Alto Tce, Yatala“The new owners were devastated when they first saw it because it was under contract,” Ms Doleman said.“When that contract fell over, it all fell into place for them.”Ms Doleman said the new owners liked the location, the flat land and the house.“They’re investors who will rent it out and move into it in about three years time,” she said.The agent said acreage stock such as the property at 14 Alto Tce, which sold for $859,000, was in high demand.More from newsDigital inspection tool proves a property boon for REA website3 Apr 2020The Camira homestead where kids roamed free28 May 2019REAL ESTATE: 14 Alto Tce, Yatala“Acreage is going unbelievably well,” she said.“People are looking for bigger properties to get a bit of space between neighbours.“I’d definitely like to see more stock, there is definitely not enough in the acreage market.”According to CoreLogic data, the suburb median house sale price for Yatala is $739,000.REAL ESTATE: 14 Alto Tce, YatalaVideo Player is loading.Play VideoPlayNext playlist itemMuteCurrent Time 0:00/Duration 0:58Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -0:58 Playback Rate1xChaptersChaptersDescriptionsdescriptions off, selectedCaptionscaptions settings, opens captions settings dialogcaptions off, selectedQuality Levels720p720pHD432p432p216p216p180p180pAutoA, selectedAudio Tracken (Main), selectedFullscreenThis is a modal window.Beginning of dialog window. Escape will cancel and close the window.TextColorWhiteBlackRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentBackgroundColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentTransparentWindowColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyTransparentSemi-TransparentOpaqueFont Size50%75%100%125%150%175%200%300%400%Text Edge StyleNoneRaisedDepressedUniformDropshadowFont FamilyProportional Sans-SerifMonospace Sans-SerifProportional SerifMonospace SerifCasualScriptSmall CapsReset restore all settings to the default valuesDoneClose Modal DialogEnd of dialog window.This is a modal window. This modal can be closed by pressing the Escape key or activating the close button.Close Modal DialogThis is a modal window. This modal can be closed by pressing the Escape key or activating the close button.PlayMuteCurrent Time 0:00/Duration 0:00Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -0:00 Playback Rate1xFullscreenHow much do I need to retire?00:58last_img read more

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Swoon-worthy Cannon Hill abode up for grabs

first_imgThere is a stone fireplace.“I wanted a lowset, with lots of and natural light and breezes,” Mr Ingreri said.In the centre of the home is an open-air courtyard, enabling light to all areas of the home, and along the entrance to the home Mr Ingreri planted vines and jasmine.“I want it to be like a big green box when it’s grown, just like the old houses that have vines growing up them in the English countryside.” The house at 3 Mckie Cres, Cannon Hill, is for sale.This Cannon Hill house will make hearts skip a beat.The light and bright home at 3 Mckie Cres was built by builder Peter Ingreri last year for his girlfriend Molly Standfield and is unlike anything in the area. There is a Cape Cod feel to the house.While there are touches of Hamptons style within the home, Mr Ingreri said he took his inspiration from The Cotswolds in south central England.The most notable feature of the house is its jaw-dropping cathedral ceiling with exposed timber panelling and white beams.More from newsParks and wildlife the new lust-haves post coronavirus13 hours agoNoosa’s best beachfront penthouse is about to hit the market13 hours ago The kitchen is simple, yet timeless.That ceiling starts from the open-plan kitchen, living and dining room and flows seamlessly to an alfresco dining area.In the lounge room is a stunning stone open fireplace, contrasting against the crisp white walls. One of the bathrooms at the home.The house is set on a 704sq m corner block, has four bedrooms, the master with an ensuite, and an inground pool. Video Player is loading.Play VideoPlayNext playlist itemMuteCurrent Time 0:00/Duration 0:51Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -0:51 Playback Rate1xChaptersChaptersDescriptionsdescriptions off, selectedCaptionscaptions settings, opens captions settings dialogcaptions off, selectedQuality Levels720p720pHD576p576p432p432p270p270pAutoA, selectedAudio Tracken (Main), selectedFullscreenThis is a modal window.Beginning of dialog window. Escape will cancel and close the window.TextColorWhiteBlackRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentBackgroundColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentTransparentWindowColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyTransparentSemi-TransparentOpaqueFont Size50%75%100%125%150%175%200%300%400%Text Edge StyleNoneRaisedDepressedUniformDropshadowFont FamilyProportional Sans-SerifMonospace Sans-SerifProportional SerifMonospace SerifCasualScriptSmall CapsReset restore all settings to the default valuesDoneClose Modal DialogEnd of dialog window.This is a modal window. This modal can be closed by pressing the Escape key or activating the close button.Close Modal DialogThis is a modal window. This modal can be closed by pressing the Escape key or activating the close button.PlayMuteCurrent Time 0:00/Duration 0:00Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -0:00 Playback Rate1xFullscreenStarting your hunt for a dream home00:51 The ceiling continues outside from indoors. The cathedral ceiling is the star of the house. Vines will eventually grow up over the beams. A beam across the top of the bedroom continues the theme of the house.last_img read more

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