However, Mihai Bobocea, adviser to the APAPR board, told IPE the government may spread the coming rise over 2016-17.Since their inception in 2008, the second-pillar funds have produced a nominal annualised average return of 11.1%.Third-pillar membership, based on increases of the last 4-5 years, is set to grow by 9% to 375,000, and assets by 25% to RON1.3bn.The 10 funds’ annualised return since 2007 totalled 8.2%. Overall, the funds have become a major institutional investment force in Romania.They hold 12% of Romanian government bonds, making them the second-biggest national debt investor after banks.They are also the largest domestic institutional investor on the Bucharest Stock Exchange, with some €730m in assets, and account for 10% of the exchange’s trading volumes, according to APAPR data.APAPR has identified a number of priorities for the pensions industry in 2015, including improving the environment for third-pillar sales and operations.“This pillar is significantly underdeveloped, compared with its potential,” said Bobocea.“A huge reason is the ‘red tape’ surrounding all stages of administration: sales, operations, investment and communication with members.“For a few years now, we have been trying to persuade the financial regulator – with more or less success – to reduce the bureaucratic burdens on third-pillar products and make them easier and more appealing to access, especially for large employers, who may offer them as employee benefits.”Other priorities include improving investment regulations, reducing operational costs and adopting a law on pension payouts.In other Romanian news, Metropolitan Life has sold APF, the company that manages the third-pillar fund Pensia Mea, to Certinvest, Romania’s biggest independent asset administrator.Pensia Mea, as of the end of 2014, had around 10,000 members and net assets of RON40.8m.Metropolitan Life also runs a second-pillar fund, Alico, which, since its purchase of Aviva’s fund in 2013, has become the country’s third-biggest by membership and assets. Romania’s second and third-pillar pension funds are forecast to expand dramatically in 2015, according to the Romanian Pension Funds’ Association (APAPR).The association forecasts that second-pillar membership of the seven funds will rise by 3.5% year on year to 6.5m, and net assets by 30% to RON25bn (€5.5bn).Some RON4.4bn will come from new contribution inflows.In 2015, the contribution rate was raised to 5%, from 4.5% in 2014, and is set to increase, under current legislation, to 6% next year.
Poland’s controversial second-pillar pensions law, which took effect in 2014, is facing a new legal challenge.On 4 March, the Warsaw District Court ruled that a class action initiated by lawyer Paweł Kowalczyk for 53 claimants could go ahead.The lawsuit – against the Polish State Treasury, Social Insurance Institution (ZUS) and pension fund management companies – claims the transfer of Polish sovereign bonds from pension fund (OFE) portfolios to ZUS violated members’ property rights.The transfer, in February 2014, removed PLN153.2bn (€36.7bn) in assets, equivalent to 51.2% of the previous month’s net asset value. The Court ruled that, because the claims of the individuals – all OFE members – were substantially the same, the lawsuit could proceed as a group action.Other members can now sign up to the action.Any compensation from the State Treasury, should the case succeed, would be subject to a separate lawsuit.The ruling, which is subject to appeal, has already caused disquiet, given that the government had earlier insisted its reforms were legally watertight.There are other outstanding challenges to the 2014 law.In January 2014, president Bronisław Komorowski, after signing off the law, referred sections to the Constitutional Tribunal.These included the ban on investments in sovereign bonds, the requirement for a high level of equity investment and the prohibition on pension companies advertising during the window when all members had to declare that they wanted to remain in the second pillar or default to ZUS. Subsequently, Irena Lipowicz, Poland’s Human Rights Ombudsman, referred the law to the tribunal on the grounds it violated public confidence in the State.Neither party addressed the issue of legal ownership of second-pillar assets.The tribunal has yet to set a date for the hearings.Meanwhile, the size of the second pillar has shrunk dramatically following the bond removal, the decision of the majority of former members to stop further contributions once the system became voluntary, the incremental transfer to ZUS of the assets of members with 10 or fewer years left till retirement, and the massive indifference of new labour market entrants.In January 2015, net assets, at PLN150.6bn, were down 49.6% year on year in Polish zloty terms, while the total monthly contribution plunged by 78.5% to PLN231m.
Finnish pension providers have seen their first-quarter returns boosted by the European Central Bank’s (ECB) monetary policy, with one claiming “outstanding” results as a consequence of the quantitative easing programme.Pensions insurer Varma reported a 5.3% return on investments in the first three months of this year, which increased the provider’s solvency level.The return was up from the 2% posted in the same period last year.Risto Murto, president and chief executive at Varma, said: “For pension investors, this year started out exceptionally strong.” Solvency capital increased to a level of 38.1% of technical provisions, from 32.9% at the end of March 2014, Varma said in its interim report.The company said its return on investments was lifted in particular by the strong increase in share prices as well as the strengthening dollar, since a proportion of its currency position had been unhedged.All asset classes posted positive returns, with equities making the highest at 9.6%, compared with 2.6% in the same period last year.Fixed income investments returned 2%, up from 1.5%, due to the decline in interest rates.‘Other’ investments, including hedge funds, produced 4.7% in the quarter, up from 1.9%, while real estate returned 2%, after 2.1% the year before.Murto said increasing the long-term growth potential of the Finnish economy was a big challenge.“The zero-rate environment, low level of investments and poor development of productivity all paint a bleak picture,” he said, adding that there was a shortage of growth and innovation.Elo said it also returned 5.3% in the first three months of the year, aided by a 13.2% return from stocks and rising as high as 20.1% for individual listed companies in Finland.The €20.9bn provider also credited the weakening euro with some of the “outstanding” gains, but CIO Hanna Hiidenpalo struck a cautious note.“Equity market values are to some extent already very high,” she said. “It seems the trends in the real economy and the investment market are diverging.”Elo said fixed income returns, at 1.1%, were higher than expected in the current low and negative yield environment across Europe.Across its entire portfolio, only listed equities managed double-digit returns of 14.8%.The second-best result was achieved by its private equity portfolio, with 6.4%.Etera, which saw assets under management increase to €6bn on back of 4% returns, praised the success of its diversified portfolio.Stefan Björkman, its managing director, argued that, in light of its asset allocation, the return over the first quarter was good.“A considerable proportion of our investments are in real estate and private equity and debt, which do not react to quick market moves,” he noted.In line with other providers, Etera saw the best returns stem from its 11.5% allocation to listed equities.The 8.6% overall return in equities, stemming from 2.8% in private equity and 4.6% in unlisted equity, was also well above the results achieved by its bond, real estate and ‘other’ investments.Ilmarinen achieved the best overall return of the four providers, at 7.1%, as listed equities returned 17.7% and both fixed income and direct real estate 1.2%.Chief executive Timo Ritakallio said he accepted that the ECB’s intervention had given equity markets a “boost”, but the €37bn mutual’s new CIO Mikko Mursula warned of “strong fluctuations” to the price of listed equity.“With interest rates at zero, investors are still heading towards the equity markets, although quite a long and severe rise in share prices lies behind us,” Mursula said.
Over the last five years, PGB – initially the industry-wide pension fund for the printing sector – has taken in more than 10 schemes from other sectors, including the cardboard industry, the wholesale sector for flowers and plants and the maritime fishing industry.The scheme for the rubber and plastics sector also recently joined.PGB reported a return on investments of 4% but saw its net return drop to 1.4% after losses on its currency hedge.It had covered 81% of its currency risk through forward contracts.PGB reported asset management and transaction costs of 0.24% and 0.06%, respectively, and said it had spent €158 per participant on administration.Its coverage ratio stood at 97.5% at the end of June.In other news, Shell’s new individual defined contribution scheme (SNPS) said in its annual report that its sponsor was exploring its options for setting up a general pension fund (APF) for its two company schemes.In 2013, Shell Netherlands closed its €25bn defined benefit scheme SSPF and started SNPS for new workers, which now manages €56m in assets.With its plan, Shell becomes the second company to place its company schemes in an APF.At the moment, Unilever is waiting for a license to operate a general pension funds for its closed DB scheme Progress and its new DC pension fund Forward.Recently, Rob Kragten, director of both Unilever schemes, claimed APF legislation was not geared to transforming company pension funds into general pension funds, which had caused delay in the licensing process. PGB, a €23.5bn ‘multi-sector’ pension fund in the Netherlands, has said it will continue to focus on achieving “controlled growth to benefit participants” despite the lack of clarity on the new pension system.In its 2015 annual report, chairman Ruud Degenhardt said increasing PGB’s scale would allow it to reduce costs and negotiate better contracts with asset managers.Added scale would also increase the scheme’s options for diversifying its investment portfolio.Degenhardt said PGB would not need the new general pension fund (APF) to achieve its goal.
“In addition, he has recruited a talented team of professionals to the company’s senior leadership team. As the company now enters its post-launch, business as usual, phase, Andrew feels the time is right for someone else to take the helm.” LGPS Central has launched three equity funds since opening for business in April. It plans to open at least two more funds later this year. The nine UK LGPS funds forming the pool have £44bn of assets between them.AQR Capital Management – The Conneticut-based global quantitative investment manager has hired Marcos López de Prado as head of machine learning to work with its existing research organisation. He will be part of the research and portfolio management teams and will focus on further developing the machine learning tools and techniques used at the firm, which said it would look to bring on more resources to further develop machine learning tools. An expert in the field, López de Prado has written a graduate textbook, Advances in Financial Machine Learning, and has published dozens of scientific articles on machine learning and supercomputing in leading academic journals. Most recently, he founded and led Guggenheim Partners’ Quantitative Investment Strategies business, where his team developed high-capacity machine learning strategies and managed portfolios for up to $13bn (€11bn) in assets. Since 2011, he has been a research fellow at Lawrence Berkley National Laboratory, a US department of energy lab managed by University of California. Redington – Robin Claessens has left the investment consultancy, where he was a managing director, to move to Belgium to be closer to his family. Claessens was chief executive and chief investment officer of the £4.5bn Invensys Pension Scheme until 2012, and joined Redington in May 2014 from BBOXX Ltd, a start-up designing and manufacturing solar-based electric systems. He was chief financial officer and then adviser at that company.Talisman Global Asset Management – Nick Cavalla is leaving the University of Cambridge Endowment Fund, where he has been CIO for 10 years, to join the family office of the Pears family. He will be joined at Talisman by three colleagues – Bruce Lockwood, Conor Cassidy and Vincent Fruchard – to manage the firms’s assets and launch an investment outsourcing platform (OCIO) platform in 2019. Cavalla joined the University of Cambridge Endowment Fund in 2007 from Man Global Strategies.300 Club – Elizabeth Corley , the former CEO of Allianz Global Investors, has joined the group of investment professionals that aims to challenge mainstream investment practice. Corley serves on three company boards as a non-executive director – Pearson plc, BAE Systems plc and Morgan Stanley Inc – and is a trustee of the British Museum. She is also the chair of a UK government-commissioned industry taskforce on impact investing . Franklin Templeton Investments – Sonal Desai has been promoted to chief investment officer of the manager’s $157bn (€135bn) fixed income group and executive vice president, with effect from December 31. The move will see her succeeding Chris Molumphy, who retires at the end of the year. Desai joined Franklin Templeton in 2009 as director of research for Templeton Global Macro, a role she will be replaced in by Calvin Ho, who has been serving as her deputy director of research. Ho will assume portfolio management responsibilities for a number of Templeton Global Macro strategies, reporting directly to Michael Hasenstab, Templeton Global Macro’s executive vice president and chief investment officer.Osmosis Investment Management – The $1.5bn (€1.3bn) systematic sustainable investment manager has appointed Mike Even, currently on the investment committee of the Massachusetts Pension Reserves Management Board, to its board and hired Paul Udall as a portfolio manager. Even was chief executive and then chairman of Man Numeric Investors, leaving the firm last year. He has also been global chief investment officer of Citigroup Asset Management. Udall was most recently at Temporis Capital, where he managed global equities portfolios for clients that included the Norwegian sovereign wealth fund. He has also worked at Climate Change Capital, Tudor Capital and Aviva Investors. Swedish national buffer fund AP1 is one of Osmosis’ clients. LGPS Central, AQR Capital Management, Redington, Talisman, University of Cambridge Endowment Fund, 300 Club, Franklin Templeton, OsmosisLGPS Central – Andrew Warwick-Thompson is to step down from his role as CEO of one of the UK’s eight local government pension scheme (LGPS) asset pools, it was announced yesterday. He joined the pool last July from The Pensions Regulator, where he had been executive director for regulatory policy.Announcing Warwick-Thompson’s decision to step down, Joanne Segars, chair of LGPS Central, praised the work he had done to steer the company through to its launch earlier this year, and said he would be leaving with the organisation’s “best wishes for the future”. “His contribution means that today the company is a fully functioning fund manager responsible for the management and stewardship of nearly £14bn (€15.7bn) of LGPS assets,” she said.
The UK’s Pensions Regulator (TPR) is backing an industry working group set up to help deal with the burden of equalising legacy pension payments following a ruling last year.The Pensions Administration Standards Association (PASA) has convened the group, which will discuss issues arising from October’s High Court ruling on guaranteed minimum pension (GMP) payments.According to a statement issued by the regulator this morning, PASA’s group aimed to “develop and promote best practice on issues arising from the ruling”, including dealing with missing member data, responding to pension transfer requests, and addressing underpayments.David Fairs, executive director of regulatory policy, analysis and advice at TPR, said: “Delivering GMP equalisation will be challenging and we welcome this initiative to bring clarity to the market. “It will take some time to work through all the issues. Establishing best practice will help industry do this as efficiently as possible, and minimise disruption to routine scheme business.” PASA’s Geraldine Brassett, chair of the new working group, added: “GMP equalisation projects are likely to be complex so it is important that advisers, administrators, trustees and employers work collaboratively to ensure cost-effective delivery and clarity for scheme members impacted.”The UK High Court ruled in October that GMP payments accrued between 1990 and 1997 must apply equally to men and women, meaning schemes faced having to revisit 30 years’ worth of records and potentially pay billions to members who missed out.GMP payments were introduced as a way of ensuring that DB scheme members were no worse off if their scheme decided to opt out of the state second pension, an earnings-related addition to the UK’s basic state pension that was scrapped in 2016.Since October, nine UK listed companies with combined pension liabilities of more than £15bn (€16.6bn) have reported the estimated impact of GMP “equalisation” on their schemes. The companies have estimated that the landmark ruling would raise liabilities by between 0.2% and 1.9%.The figures are preliminary and will be confirmed later this year once full calculations have been completed.
Oxford UniversityHow We Run Our Money: USS Bill Galvin and Guy Coughlan of the UK’s Universities Superannuation Scheme outline their measured approach to valuation to Joseph Mariathasan UK’s biggest scheme ‘could take more risk to cut deficit’ – expert panel A panel of experts scrutinising the valuation of USS has recommended a series of changes that could reduce its reported deficit significantly and cut planned contribution increasesUSS: Further delay to funding agreement risks regulatory action USS has said it will not incorporate revised risk appetite information from sponsoring employers into its latest funding agreement in part because of concerns a further delay could bring a regulatory penalty Credit: Warwick University UCU branchUCU members striking at Warwick University over USS proposals in 2018The first two options put forward last week included the same contribution rates that USS consulted on with employer organisation Universities UK (UUK) earlier this year: a fixed rate of 33.7% in the first proposal, or 29.7% with sufficiently strong contingent contribution arrangements for the second.A new third option of 30.7% was also offered by USS, subject to a 2020 valuation.According to USS, any of the three options would see a “significant reduction” in the contributions required from 1 April 2020, using data and assumptions from the scheme’s 2017 valuation.The current contribution rates of 10.4% from members and 22.5% from employers are set to rise in October 2019 to 11.4% and 24.2%, respectively.The UCU and UUK will consider the options at future formal JNC meetings.However, UCU head of higher education Paul Bridge confirmed the union would push its policy of “no detriment”, which states that members’ benefits should not be reduced and their contributions should not rise.He said: “We have come a long way from the start of this dispute when we faced the end of the guaranteed pension at a cost to members of around £200,000 over the course of their retirement.”While the union had made substantial progress in avoiding the “very large increases originally proposed by USS”, Bridge said, none of the three options would satisfy the union’s “no detriment” policy position.Bridge added: “Once there is a clear proposal, it will need to be considered by UCU and UUK within the JNC where we will press our policy of no detriment. It will then be for our members to decide what happens after proposals emerge from the JNC negotiations.” Staff across the UK went on strike last year after the scheme’s Joint Negotiating Committee (JNC) proposed closing the DB section, having reported a £7.5bn funding shortfall in 2017. Further reading A range of new options put forward by the Universities Superannuation Scheme (USS) to solve an impasse with staff organisations last week have been criticised by the University and College Union (UCU).The £64.4bn (€74.4bn) USS – the UK’s largest defined benefit (DB) pension scheme – last week published a third option for employee and employer contributions in an attempt to break a deadlock in discussions over the future of the fund.In response to the three options for finalising the 2018 valuation, the UCU said its members would ultimately decide the next steps over the future of the scheme. However, it noted that none of the proposals satisfied the union’s “no detriment” policy.The row is the latest between the USS, its supporting employers and the higher-education staff that make up the majority of its members. Over the past few years, the two sides have clashed over potential cuts to benefits or increased contributions that could fill the fund’s significant deficit.
A branch of Topshop, part of the Arcadia Group, in Leeds“We recognise that the best support for any pension scheme is a trading employer and we feel the CVA proposals now provide the right balance between security for the pension schemes and the chance of sustainability for the company.”Oliver Morley, chief executive of the PPF, added that the arrangements had secured the lifeboat fund’s support for the CVA, which is to be put to creditors for approval today.“While we are the largest creditor in this CVA, other creditors will also need to agree the terms for it to be successful,” Morley said. “We therefore want to reassure pension scheme members of the continued protection the PPF gives them.”According to its most recent available accounts, the Arcadia Group pension schemes had combined assets of £905m as of August 2017, but total liabilities of £1.2bn.Spectre of BHS looms The UK’s Pensions Regulator (TPR) has signed off on a restructuring arrangement for high street retail group Arcadia that includes a £310m (€350m) funding deal for its defined benefit (DB) pension scheme.TPR and the Pension Protection Fund (PPF) both issued statements late yesterday welcoming the funding arrangements. The agreement forms part of a company voluntary arrangement (CVA) to restructure its debt, including shutting stores and reducing rent bills in order to stave off bankruptcy.Arcadia’s owners – Sir Philip Green and Lady Tina Green – have agreed to contribute £100m in cash to the scheme, while the trustees will be granted security over £210m worth of assets. In addition, Arcadia has agreed with trustees to pay £75m in contributions to the scheme over the next three years.A spokesperson for TPR said: “Following extensive discussions with the company, shareholders, the trustees of the pension schemes, the PPF and advisers, we are pleased that additional security has been agreed in support for the pension schemes, which brings the total security value to £210m. “This is in addition to agreed contributions of £100m to be paid to the schemes by Lady Green. Given this enhanced level of support, we now consider the updated CVA proposals are sufficient because they provide better protection for scheme members in these difficult circumstances. Sir Philip Green gives evidence to the UK parliament’s Work and Pensions Select Committee in 2016The negotiations around Arcadia’s restructuring and the financing of its pension schemes have grabbed headlines in the UK, largely due to the involvement of Arcadia founder Sir Philip Green.Sir Philip reached a settlement with TPR in 2017 to pay £363m to the pension schemes of BHS, a now-defunct retail chain that he sold for the nominal fee of £1 in 2015.Following BHS’ bankruptcy in 2016 – which caused its DB schemes to transfer to the PPF’s assessment period – TPR pursued Sir Philip and Retail Acquisitions, which bought the company, for contributions to the schemes.The eventual settlement helped BHS’ trustees secure a full buyout with Pension Insurance Corporation last year, meaning all members’ benefits were secured. The PPF caps compensation and indexation for the members of DB schemes it takes on.A number of UK high street retail groups have faced severe financial difficulties in recent years, with Debenhams, BHS, House of Fraser, Dixons Carphone and Mothercare all having faced hardship or even bankruptcy.
Principles for Responsible Investment – Carmen Nuzzo has been made head of fixed income at the PRI, a new position at the organisation. She began working for the organisation in April 2017 and so far has been focused on its credit risk and ratings initiative, which aims to “enhance the transparent and systematic integration of ESG factors in credit risk analysis”. Archie Beeching was formerly the manager of PRI’s fixed income work stream before leaving to join asset manager Muzinich & Co earlier this year. According to her LinkedIn profile, Nuzzo was senior macro economist at Morgan Stanley for two-and-a-half years before joining the PRI, a position she also held at Salomon Brothers and then Citigroup. Norfund – Norwegian state development finance institution Norfund has appointed Olaug Svarva as the new chair of its supervisory board. She replaces Kristin Clemet, who has served as chair for the last 12 years.Svarva was chief executive of Folketrygdfondet – which runs the country’s domestic sovereign wealth fund, Government Pension Fund Norway – for almost 12 years until she left in February 2018. She is currently chair of the supervisory board of Norwegian financial group DNB and has also served on a number of other Norwegian company supervisory boards.European and Securities Markets Authority (ESMA) – The EU financial markets watchdog has reappointed Erik Thedéen, director general of Sweden’s Financial Supervisory Authority, to its management board. ESMA said Thedéen would remain a member for another term of two and a half years, beginning on 1 October, after the current term expires on 30 September.Other re-elections made by the authority’s supervisory board include Robert Ophèle from the French stock market regulator Autorité des Marchés Financiers and Sebastian Albella-Amigo from the Spanish National Securities Market Commission. Fondo Espero – Italian pension scheme for education staff Fondo Espero has appointed Massimo Di Menna as the president of its board of directors. The €1.1bn fund also elected Maria Maddalena Novelli as deputy president. Di Menna is a representative of the employee association, while Novelli represents the employers’ association. The new board is to remain in office for three years from 2019 to 2022. Stap – Karin Roeloffs has joined the supervisory board of Stap, the Dutch pension consolidator vehicle of insurer Aegon. She succeeded Jan Overmeer, who was not available for a second term.Between 2011 and 2018, Roeloffs was a partner at Mercer Netherlands where she headed the investment team. Last year she joined Avida as an associate partner. Roeloffs, an economist, has experience in strategic asset allocation, governance, outsourcing, relationship management and risk management.Financial Reporting Council (FRC) – The UK’s audit regulator has appointed Liz Murrall to chair its Corporate Reporting Council. Murrall is currently director of stewardship and reporting at the Investment Association, the trade body representing the UK investment management industry.In addition, Andrew Kail has joined the FRC’s Audit & Assurance Council. He is currently head of financial services at PwC.AFM – David Voetelink has started as member of the supervisory board of Dutch regulator the Financial Markets Authority (AMF). He succeeded Rob Becker, who is not available for a second four-year term following his appointment as non-executive director of insurer AXA UK.Voetelink, an economist, is vice chairman and CFO on the executive board of Erasmus Medical Centre and has been working as chair and partner at KPMG Health since 2000.Martin van Rijn, chair of the AFM’s board, said that Voetelink knew the accountancy sector, had ample board experience and broad financial knowledge. The board also comprises Willemijn van Dolen and Wendy de Jong. There is a vacancy for a fifth member. AXA Investment Managers (AXA IM) – Rachel Basarab-Horwath has joined the €730bn asset manager as institutional sales director, tasked with developing opportunities with institutional investors including corporates, pension schemes and professional trustees. She was previously a sales director and senior investment consultant at Mercer.BNP Paribas Asset Management – The French asset management giant has hired Ulrik Fugmann and Edward Lees to run a global long/short sustainability strategy, focusing on the energy, materials, agriculture and industrial sectors.The pair joined last month from Duet Group where they were co-CIOs, roles they had held since 2015 when Duet bought North Shore Partners, a boutique investment house Fugmann and Lees founded in 2012. They previously also worked together at Goldman Sachs.Guy Davies, CIO of fundamental active equities at BNP Paribas Asset Management, said: “Ulrik and Edward are highly experienced thematic investors whose passion for sustainable investing in public and private markets is matched by their acknowledged expertise. Their recognised investment approach of augmenting fundamental analysis with quantitative techniques and machine learning is ideally suited to complementing and enhancing BNP Paribas’s existing capabilities.”Värde Partners – The $14bn (€12.5bn) alternatives specialist has appointed Ilfryn Carstairs as co-CEO, effective from 1 January 2020. He will hold the role alongside Värde co-founder George Hicks, who plans to transition to an executive chair role in 2022. Carstairs is currently global CIO, a role he has held since 2017. He joined Värde in 2006 and previously led its corporate and traded credit team.Hicks said: “Transition is a process and involves the entirety of the firm. The roles Ilfryn and I play are just part of that process whereby a new generation of leaders succeed the founders… [The appointment] will enable Värde to continue delivering for our investors and will help to ensure that we maintain our strong culture long into the future.”Calastone – James Donaldson has been appointed chief financial officer at Calastone, a provider of fund transaction services. He was previously CFO at software provider Ciklum and has previously worked for online travel companies Travelocity and LastMinute.com.Calastone recently launched a blockchain-based trading system for investment funds, dubbed the “distributed market infrastructure”. The company said Donaldson would play “a key role in developing the business as clients start to leverage the enhancements made possible through the new technology”. Church Commissioners, PRI, Norfund, ESMA, Fondo Espero, Stap, FRC, AFM, AXA Investment Managers, BNP Paribas Asset Management, Värde Partners, CalastoneChurch Commissioners for England – Mary-Pat Barron, previously director of investments for Sawdust Investment Management Corporation, has joined the £8bn (€8.9bn) investment arm of the Church of England as head of public equities. According to Church Commissioners, she relocated from Chicago to London in 2017, and has focused largely on European investments since then. She replaces Richard Saunders who left at the end of October.The Church Commissioners has more than £3.5bn invested in public equities, primarily run by external managers. The public equity portfolio invests in long-only and long/short strategies in a responsible and ethical way for the Church of England.
A spokeswoman for ERAFP, France’s €29.6bn additional pension fund for civil servants, said it was also part of the investor group but could not reveal how much it would invest.Investments would be progressively directed towards tech in the context of the relaxation of its investment restrictions. ERAFP was recently granted permission to invest more in unlisted assets and mutual funds.FRR noted that the €500m it is committing is on top of a €2bn allocation to French illiquid assets that was decided several years ago and was now already largely invested.Yves Chevalier, executive director at FRR, told IPE that the €500m would be split equally across the venture capital late stage funds and the funds for investment in global listed tech companies.“These aren’t investments that we’ll be making immediately,” he said. “We’ll give ourselves the time to define a strategy to implement it in 2020 and 2021.” 25 unicorns in France by 2025Macron said the government wanted to see 25 French unicorns created by 2025.According to a report prepared for France’s economy ministry earlier this year, France had the attributes to be a leader of “the fourth industrial revolution” – defined by the World Economic Forum as a fusion of physical, biological and digital technologies – but a lack of late-stage funding was preventing French technology companies from growing. French venture capital funds were typically smaller than their main foreign rivals, it said.Initial public offerings, meanwhile, were fairly rare in France and when they did take place, did not generally raise enough funds to transform the company in question.The report, written mainly by Philippe Tibi, the former head of Swiss bank UBS, recommended that institutional investors be invited to support venture capital funds focussed on the late-stage segment and based in France. It also recommended encouraging the emergence of global listed tech equity funds and managed by teams primarily based in France.More specifically, according to the report, France needed to attract about €10bn and recruit 50 asset managers in three years’ time. Of this total, some €8bn would have to come from institutional investors, it said.Pour la réussite de notre écosystème numérique, j’ai fixé un objectif clair : pic.twitter.com/r6KCVy5Q83— Emmanuel Macron (@EmmanuelMacron) September 17, 2019 Fonds de reserve pour les retraites (FRR), France’s €32.7bn pension reserve fund, has said it is committing to investing, by 2022, €500m in French late stage/growth funds and in global tech funds managed in France. FRR’s commitment was made in the context of a government drive to promote French start-ups and encourage so-called unicorns (privately held firms valued at more than $1bn [€900m]) to list in Paris.Last month, in connection with “France Digital Day”, Emmanuel Macron announced that French institutional investors had pledged to invest up to €5bn, split across two categories: €2bn for investments in late stage or growth companies – unlisted equities – and €3bn for global tech funds that invest in listed companies and are managed by France-based asset managers.FRR is one of the investors to have publicly disclosed its involvement.