It is often said that the trustees and staff of big pension funds see risk differently to the way the members of their funds do. In benign markets this is not a problem. When markets fall, though, it’s a big problem. In 2008 in Thailand, for instance, members of the Government’s Thai Pension Fund held…
New research has cast doubt over the sustainability of the lifetime annuity business through the study of the holistic risk of issuing lifetime annuities from the insurer’s perspective. The researchers recommend the establishment of national catastrophe schemes in the markets where lifetime annuities are written – which is most developed markets. The researchers are: John…
The Australian Custodial Services Association, whose members recently passed the $A2 trillion mark for combined assets under custody, will resist the proposal by one of the regulators to change the name “custodian” to something more recognizable for retail investors. Pierre Jond, the ACSA chair, told the association’s annual conference in Sydney last week that the…
Northern Trust has been appointed as the global custodian to the internationally invested funds of Magellan Asset Management, which plans to launch a UCITS fund in Ireland within the next few weeks. The new Northern assets total about $US2.5 billion of the Sydney-based manager’s $US6.7 billion. They encompass the Australian managed investment schemes, a global…
China’s two big funds which use a lot of external managers, the $US300 billion China Investment Corporation and the $US150 billion National Council for Social Security Fund, have embarked on a formal three-year review of all funds manager contracts. The review, which one experienced manager described as “brutal”, was scheduled for completion at the end…
As pension funds around the world gradually move to a risk-on set of strategies, questions linger as to how many have actually learned whatever lessons there are to be learned from the global financial crisis. Has risk been adequately assessed since 2008? The polite answer is: yes, it has been assessed in the light of…
While shortening the trading cycle from T+3 to T+2 and perhaps even T+1 is generally regarded as being a good aim for the investment industry, the operational changes required do not get the attention they deserve, according to Tony Freeman. Freeman, the London-based executive director, industry relations, for Omgeo, said that the sector had been…
An unintended consequence of increasing bank regulations, such as Basle III, is that retail investors can get better rates for some deposits, such as cash, than the big scale-conscious funds. And, with the new-style member-directed platforms, they can have the best of both worlds. Ian Dunbar, head of investment platforms for UBS in Australia, says…
Value manager GMO usually gets it right, eventually. But it may go for long periods of being wrong – that is, being too early in its calls. But its latest research report, “Feeding the Dragon: Why China’s Credit System Looks Vulnerable”, is a classic and thorough analysis which deserves to be widely discussed, whether or…
State Super of NSW, Australia’s largest defined benefit fund, has secured its CIO, Mark O’Brien, as a key part of its reconstruction under a new board and management. Four other investment professionals are currently being sought. State Super (SAS Trustee Corporation) is a $A36 billion closed fund overseen by the NSW Government for some of…
