He said: “The moment is right – at the end of crisis – to enlarge our product range.”La Française, he added, would look to both French and international institutions for backing.Patrice Genre, founder and former managing director at DTZ Asset Management, has been recruited to run the joint venture.Genre said: “We have seen appetite from investors for London and Germany. They want to invest in France but are desperately looking for asset managers, which France lacks.“You have many small teams offering asset management and then a few larger names.“We want to offer something entrepreneurial but with the security of being a bigger entity.”La Française Real Estate Partners will target returns of 5-6% for core real estate, 10-12% for value-added and 18% for opportunistic.It will focus on Paris and large French cities, particularly offices, followed by retail and industrial properties.The entity will sit alongside La Française’s European network, which, Bertrand said, should allow sharing of clients.Earlier this year, La Française and Forum Partners acquired pan-European fund manager Cushman & Wakefield Investors, renaming it La Française Forum Real Estate Partners.La Française, which manages $9bn (€6.6bn) in French property, bought a 24.9% stake in Forum Partners last year. La Française is launching a new platform dedicated to French real estate and aimed at global institutional investors.The new entity, La Française Real Estate Partners, will look to invest as much as €2bn in French commercial real estate over the next three years and €200m by year-end, covering a range of core/core-plus, value-added and opportunistic strategies.It will be 35% owned by management and 65% owned by La Française Real Estate Managers.Its chief executive, Marc Bertrand, told IPE sister publication IP Real Estate that it was time to increase staff numbers and products with the French market bottoming out and increased appetite from institutional investors.
The UK’s Pension Protection Fund (PPF) plans to appoint a global custodian in the next 12 months, according to an official notice.The pensions lifeboat scheme said it intended to award a contract for the provision of global custodian services in the next 12 months and that the procurement process was expected to start at the end of August or later, in a prior information notice on the TED EU tender service.The PPF said the core service requirements were likely to be the provision of custody and investment accounting services incorporating global custody and investment accounting, including administration of alternative investments such as property, private equity and OTCs across a range of funds and segregated mandates. Additional services required include performance measurement, post-trade compliance monitoring, securities lending, collateral management, passive currency overlay, foreign-exchange hedging and derivative servicing. The fund said there may be future requirements for supporting asset growth, and one option was self-trading with middle office activities.The PPF said it was now in the process of preparing specifications for the services, and that firms interested in tendering should register with its dedicated tender portal.Meanwhile, the European Central Bank (ECB) is looking for a firm to provide actuarial services, according to contract notice on TED.The ECB issued an invitation to tender for the provision of various services to its Directorate General Human Resources, Budget and Organisation, which administers the bank’s pension arrangements – the ECB retirement plan and the ECB pension scheme.The services required included an annual actuarial valuation for the financial years 2015-17 of the assets and liabilities of the ECB pension arrangements and other benefits, a funding valuation for 2015-17 of the ECB pension arrangements as well as actuarial advice on a broad range of issues.The contract is to start at the beginning of February 2015 and run until the start of February 2018.Tenders will be opened on 13 August, according to the contract notice.
Leni Boeren, a member of the Robeco management board, said she was delighted the firm had been chosen as investment manager for the venture.“This is a milestone in our successful cooperation with Orix and is further evidence of our growing commitment to creating attractive new investment opportunities in Asia for our institutional investor partners around the world,” she said.Freedland added: “The substantial resources the founding partners are committing to ACP will help position it as the preeminent investor in this asset class in Asia from day one, and represents a clear signal of the depth of our collective belief in the investment strategy and its return potential.”Yuichi Nishigori, corporate senior vice-president at Orix, meanwhile identified Asia’s need to secure “rapid and sustainable economic growth”, as well as quality of life concerns as one of the many reasons the funding would be welcomed.Alongside renewable energy and resource efficiency, the venture will also invest in water, agriculture and forestry companies.ADB is among a number of development banks to target the low-carbon economy in recent months, with the venture coming shortly after Germany’s Kreditanstalt für Wiederaufbau issued €1bn in green bonds and the UK Green Investment Bank announced the launch of a wind farm fund. Robeco Asset Management has joined with parent company Orix and the Asian Development Bank (ADB) to launch a $400m (€298m) low-carbon venture.Asia Climate Partners (ACP) will be based in Hong Kong and act as a private equity investor in a raft of low-carbon initiatives, including renewable energy and resource efficiency companies.In a statement, the three founding investors said the initiative would target risk-adjusted returns as well as a positive environmental and societal impact.Todd Freeland, director general of ADB’s private sector operations department said, ACP was an “innovative platform” to channel funds into climate-related transactions.
Instead, newly proposed pension institutions should be subject to three capital requirements and hold capital equal to the highest of the three requirements – either a flat-rate capital rate similar to the current buffer requirements, a risk-based capital buffer or a guarantee-based requirement.The committee responsible for the final report suggested the risk-based capital requirement would take into account the investment risk of individual asset classes and was “intended to provide incentives for good risk management”.It also said a breach of the risk-based capital rules would be regarded as less severe than the flat-rate measure, as the latter would be viewed as pension institutions being in breach of the IORP Directive.The institutions will also be offered leeway to account for capital shortfalls under the risk-based requirement if a third party is able to provide additional funding to shore up its position. The Swedish government has announced details of a new pension framework, imposing capital requirements on the country’s pension institutions that exceed the revised IORP Directive it is meant to emulate.The rules, which will take effect from 2016, follow 2011’s decision to phase out the previous regime for pension institutions (UFL) and aim to improve corporate governance and risk management.The stated aim of the review, chaired by Tord Gransbo, is to give companies a clear choice between offering pensions through a vehicle regulated under domestic insurance or through occupational pensions law.According to the final, 848-page report, presented to the government today, simply applying the same principles that would apply to insurance companies under Solvency II would have not been the right approach to pursue.
Insurer ASR has taken over De Eendragt, the life insurer for collective pension arrangements. In a joint statement with the €1.7bn De Eendragt, ASR said it wanted to fully integrate the small life insurer into its own organisation over time.“Last year, we became increasingly aware that joining a larger player would offer our affiliated employers and participants the best options for continuity,” a spokeswoman for ASR quoted Albert Bakker, director of De Eendragt, as saying.He added that the life insurer’s solvency “would soon meet all legal requirements again”. Until ten years ago, De Eendragt was the pension fund for the companies of former paper manufacturer Koninklijke Van Gelder Papier. However, it was forced to change its approach after supervisor DNB concluded its business model of managing assets in ring-fenced accounts was at odds with the then-new Pension Act.Currently, the life insurer has 37 affiliated employers with a total of 22,000 participants.In an interview in IPE sister publication PensioenPro last year, Philip Menco, De Eendragt’s former director, indicated that the company was suffering under the stricter accounting rules of Solvency II, which required a much larger contribution from new clients to the insurer’s financial buffers.As a result, De Eendragt was no longer able to compete and failed to attract new clients, he said.In addition, the increasing supervisory burden as well as falling interest rates also affected the life insurer, according to Menco, who said that it had been looking into the options for improving its buffers through co-operation with other players since 2010.However, in its annual report for 2013, De Eendragt’s board said that it had decided to continue independently, “since a strategic survey into co-operation had not produced a satisfactory result”.According both parties, the takeover is subject to approval from the regulators. ASR and De Eendragt did not disclose the cost of the transaction.Jos Baeten, chief executive officer at ASR, said that the acquisition of De Eendragt was an important step in realising ASR’s goal of gaining a bigger foothold in the Dutch pensions market.Last year, ASR increased its pension liabilities by €140m through the extension of contracts, new contracts with largely employers in the SME sector as well as through buyouts of pension funds.In its annual report it also said that the 50% ASR-owned Brand New Day PPI, which focuses on DC plans, doubled its number of client employers to 1,000.
Taking the reduction into account, the overall contribution for 2016 will be around 30%.Shell Nederland’s overall contributions for 2016 will fall by around €80m per year compared with what was paid in 2015.In 2015, the fund received €320m in contributions, €40m more than it needed to achieved the required growth in pension payments, according to the fund’s annual report. The new methodology adjusts the contribution percentage in accordance with the expected return, the growth of salaries at Shell Nederland and the average life expectancy of the active members. The average age is increasing as the fund is closed to new members.The fund also points out that future costs will increase because of the closure. The fund apparently no longer wishes to set a contribution rate solely related to the coverage ratio, as it previously did. The trustees will set the 2017 contribution at around the end of this year. The fund said the level of the contribution was partly dependent on the indexation granted to active members.If indexation is higher next year than this year, the contribution will be higher. “In particular,” it added, “the contribution will rise and fall with the level of unconditional indexation granted to active members.”It said members would not notice the stark reduction, as the contribution remains at 2%.Future accrual and indexation expectations remain unchanged, according to the fund. Shell has lowered the employer contribution to its Dutch defined benefit (DB) pension fund from 40% to 18% as of 1 July as a result of a new methodology that does not disadvantage members, according to the Stichting Shell Pensioenfonds website.According to the fund, which manages around €26bn, the 40% employer contribution rate was particularly high when compared with other pension arrangements.The contribution was lowered from 45% to 40% last year, and the new 18% rate is the outcome of a study to set a new contribution methodology, undertaken as part of an asset-liability management study carried out last year.The trustees wanted to address the high contribution level and were looking for a calculation method that fit better with the new financial assessment framework (FTK).
It said the decision to eliminate a security from the portfolio remains with each member of the association.SVVK-ASIR has seven members: first pillar fund buffer Compenswiss/AHV; the pension scheme for telecommunications company Swisscom (comPlan); accident insurance fund Suva; public pension fund Publica; and the pension funds for the postal service (Pensionskasse Post), federal railways (Pensionskasse SBB), and the canton of Zurich (BVK).IPE understands that each member has holdings in at least one of the identified companies.Jacqueline Oh, managing director of the Bern-based association, said the board of directors approved the exclusion recommendation at the end of February.It is separately launching an engagement campaign with companies deemed to fall most foul of certain environmental, social, and governance (ESG) norms.Oh said it had picked around 15 companies across a range of sectors to begin with.“We’ll start small and gain expertise, but we want to increase the number of companies we engage with over time, ” she said.The exclusion recommendation on controversial weapons is the first concrete measure taken by the association since it was founded in December 2015. Separately, Australian asset manager AMP Capital yesterday announced it would not invest in companies manufacturing tobacco, cluster munitions, landmines, or biological and chemical weapons.It will divest around A$440m (€315m) worth of tobacco securities across equities and fixed income, which it said is the largest divestment in Australia to date. It will also divest around A$130m from cluster munitions and landmines. The asset manager’s portfolios do not have holdings in companies with known exposure to chemical or biological weapons, but such companies will be excluded from the investable universe.The divestment will happen under a new “ethical framework” the company has introduced. This establishes minimum ethical standards to be applied across the portfolio. Previously, AMP Capital dealt with ethical issues as part of its ESG analysis on a case-by-case basis and by offering customers responsible investment options.AMP Capital CEO Adam Tindall said: “The new framework complements our existing approach to addressing ESG investment risks by helping us to resolve complex ethical issues as they arise. It reflects the changing attitudes of our investors, who increasingly do not want to be invested in harmful products.”“We are not prepared to deliver investment returns to customers at any cost to society,” he added. “This position has been affirmed through consultation with major institutional clients and engagement with retail customers.” In addition, French public sector pension scheme Ircantec recently announced that it had sold holdings worth €46m across 18 companies as of the end of 2016 under a coal-based divestment policy.In other ESG news, the UN’s Principles for Responsible Investment (PRI) has launched a proxy vote declaration system.The system allows investors to publicly declare how they intend to vote on shareholder resolutions about ESG issues filed or co-filed by PRI signatories.PRI said its decision to launch the system was influenced by other initiatives such as “Aiming for A”, an investor coalition that has had success with some shareholder resolutions filed at extractive companies.The PRI said a range of signatories have been requesting greater transparency in proxy voting decisions by “the investment community”.Finally, a group of institutional investors and non-profit groups have launched what they describe as the first public ranking of corporate human rights performance.According to a statement, the Corporate Human Rights Benchmark (CHRB) is the product of two years of consulting with over 400 companies and organisations, and is supported by 85 investors accounting for $5.3trn (€5trn) in assets under management.The investors leading the CHRB are APG Asset Management, Aviva Investors, and Nordea Wealth Management.The benchmark examines companies’ policies, governance, processes, practices, and transparency, as well as how they respond to serious allegations of human rights abuse. Companies are scored on 100 indicators across six measurement themes.The idea behind the benchmark is to incentivise companies to work towards a strong human rights record, which will give them “moral and commercial advantages”.Mark Wilson, group CEO of Aviva said: “For the first time we have a public measure of companies’ human rights performance which will focus attention in the boardroom on their performance versus other companies and allow investors to ask the right questions.“More transparency and a desire to improve in the rankings will spark a race to the top in corporate human rights.” The Swiss responsible investment association, SVVK-ASIR, has identified 15 arms companies its members – major Swiss pension funds – should not invest in.The 15 companies are from India, Israel, Romania, Russia, South Korea, and the USA. They are considered to make products that violate Swiss law and internationally recognised conventions, such as the Ottawa Convention – banning anti-personnel mines – and the Oslo Convention on cluster munitions.The Swiss association announced the recommendation to its members last week. It has also published position statements on different types of munitions.According to a statement from the association, its members will over the coming months decide on how to implement the recommendation in their portfolios. The assocation’s view is that engagement with companies producing banned weapons or munitions will not bring about change.
An Irish publishing company has agreed to pay €70m into two defined benefit (DB) schemes to end a long-running dispute over their future funding.Independent News & Media (INM) struck the agreement with the schemes’ trustees last week, according to a joint statement from both parties.The company and trustees said INM would pay the deficit reduction contributions agreed in the schemes’ 2013 valuation, as well as supplementary payments “to ensure pension pots… are no lower than as at 2013”. The company has also made “special provision” for members aged 62 or over who are yet to retire.The Independent Newspapers (Ireland) Limited Contributory Pension Plan and Independent Newspapers Management Services pension scheme are both to be wound up as part of the agreement. INM operates defined contribution (DC) schemes, and in total said it was projected to “invest” roughly €115m into all its schemes – including the new €70m arrangement – by 2023.The case grabbed headlines in Ireland, not least through coverage from the Irish Independent newspaper, owned by INM. Initially, the company had planned to wind up the schemes without closing their deficits, transferring members to DC schemes. The Independent reported that this would have led to future retirees losing up to 30% of their expected benefits.In Ireland, there are currently no laws requiring companies to fully fund their schemes when winding them up. The INM case received political attention and led to the introduction by politicians of a range of proposals for the protection of DB schemes and members. These are due to be debated by parliament’s Joint Committee on Social Protection later this year.In the joint statement, INM and the trustees said: “These pension changes are not unique to INM. Many companies, including other media organisations providing DB pension schemes, have changed from a DB to a DC model.”
Last month civil service scheme ABP said it had hit its carbon reduction target two years earlier than expected.Elsewhere in its annual report, PGGM detailed an initial malfunction of its invoicing system for PFZW, which had caused 3,000 of the 22,000 employers affiliated with the healthcare scheme to receive wrongly calculated invoices.It also reported “incidents” involving two pension fund clients. Although it didn’t identify the schemes, PFZW’s annual report cited that 36,000 of its participants hadn’t received the mandatory information letters for joining or leaving their scheme in time.PFZW said that systems and processes had been improved and that the letters had finally been sent.Dutch regulator DNB said in April that it planned to assess the adequacy of pension fund operations.PGGM recently warned that its IT system would not be able to cope with the Netherlands’ proposed new pension system.Meanwhile, the asset manager said its innovation programme to reduce costs had saved €50m since it started three years ago. It also achieved PFZW’s goal of a 20% costs saving across the entire investment chain.The asset manager added that it had recouped €3.1m of investment losses as a result of legal procedures. Currently, it is a participant in a US class action against Brazilian oil company Petrobras, which saw its market value halve in the wake of a corruption scandal. Several other European pension funds have already reached settlements with the company, including Sweden’s AP1, Dutch scheme AVH, and the UK’s Universities Superannuation Scheme. PGGM posted a net profit of €2.9m in 2017, compared with €1.3m in the previous year. PGGM, the asset manager of the €197bn Dutch healthcare scheme PFZW, is halfway to achieving its main client’s target of halving its carbon footprint by 2020.In its annual report for 2017, it revealed that it had reduced CO2 emissions in PFZW’s investment portfolio by 28% relative to 2014.The €218bn asset manager said it also wanted to reduce its own carbon footprint, which had increased 9% last year as a result of its number of staff rising from 1,322 to 1,372.It added that an increase in direct investments had also led to more air travel by staff.
The chief executive of the Financial Reporting Council (FRC), the UK’s audit regulator, is to exit next year as it faces an independent review into its operations and effectiveness.The FRC announced this morning that Stephen Haddrill intended to quit his position in “late 2019”.The regulator said it had not yet agreed a specific date for Haddrill’s departure is this would depend on the outcome of the review as well as any leadership transition arrangements and the appointment of a new CEO.The FRC has faced criticism in the past few years from some quarters, which has intensified since the collapse of outsourcing firm Carillion at the start of this year. Stephen Haddrill has led the FRC since 2009Haddrill was appointed CEO at the FRC in November 2009, having previously led the Association of British Insurers for four years. He also worked for the UK’s trade and industry department for several years.He was appointed to the International Accounting Standards Board’s Financial Crisis Advisory Group in December 2008 to assess issues resulting from the global financial crisis.Stephen Haddrill said: “I am incredibly proud to have led the FRC for nearly nine years. However, I believe that it should be the job of a new CEO to lead the FRC when the way ahead is decided.“In the meantime, I remain fully committed to taking forward the FRC’s important programmes on audit reform, investor stewardship, corporate reporting and preparing the FRC for EU exit.”Sir Win Bischoff, chairman of the FRC, added: “I would personally like to thank Stephen and also on behalf of the board, committees and councils of the FRC for his leadership and commitment over this significant period in our history.” A report from a parliamentary committee in May accused the FRC and the Pensions Regulator of being “united in their feebleness and timidity” in their approach to overseeing Carillion’s financial statements and responsibilities.Other critics of the FRC’s handling of audits and financial reporting include the Local Authority Pension Fund Forum, consultancy group PIRC, and former MEP Sharon Bowles.The FRC oversees the UK’s corporate governance and stewardship codes, the latter of which was revised last year after the FRC pressured signatories over their compliance with its principles.