Mon, 21 Jul 2014 14:28:04 GMT
Early July, BT announced with great publicity that it executed a £16bn longevity hedging deal with Prudential Insurance Company of America.
It is easy to get caught up in the media hype and “heat of the moment reactions” on this mega deal. However, from my time as CEO and CIO of Invensys Pension Scheme, it became clear that trustees need to ask the right questions to find the right solutions for a particular scheme. With this in mind, I try to put myself in the shoes of a pension fund trustee director and wonder: “What questions should I, trustee, ask my advi ...
Tue, 15 Jul 2014 12:41:06 GMT
With the Global Financial Crisis (GFC) firmly entrenched in our memories, credit spreads tightening and the rate cycle set to turn, one can understand investors insatiable appetite for absolute return strategies especially when investing in global fixed income markets. Whilst this is not a new idea it remains a relatively immature peer group, with many interpretations and many funds that are not really delivering absolute returns.
Fixed income management has changed significantly over the years. Going back more than ten years most managers offered traditional 'long-only' ...
Thu, 10 Jul 2014 13:24:24 GMT
There has been a flurry of activity in the longevity swap market over the last 12 months culminating in the mammoth £16bn transaction announced in July 2014 between the BTPS and Prudential. We appear to be seeing a big increase in the size of individual deals, as well as the overall number of deals. Why is this?
- Anecdotally there are more firms willing to supply longevity hedging cover into the market, meaning that it has become more feasible for large (£5bn+) schemes to contemplate a transaction. Once ...
Mon, 30 Jun 2014 15:48:57 GMT
Have you ever thought of the perfect retort, but only done so too late to actually use it? The French have a phrase – l’esprit d’escalier (literally, the wit of the staircase) to describe just this predicament, yet we don’t have an obvious equivalent in English. In a similar vein Korean has a word, nunchi, to describe the intuitive ability to gauge how people are feeling, and to know what not to say. Angdai, in Hindi, refers to the lazy morning stretch you do when you wake up in the morning. However my favourite word that English could really use has to be t ...
Wed, 11 Jun 2014 12:22:11 GMT
As part of our commitment to raising awareness of Financial Education, we fully support the efforts of our friends at Pfeg and their MyMoneyWeek initiative. To find our more, visit the pfeg website. Hopefully this blog illustrates why building financial capability is so important.See if you can answer the following questions:
1. Suppose you had $100 in a savings account and the interest rate was 2% per year. After five years, how much do you think you would have in the account if you left the money to grow?
A) More than $102
B) Exactly $102
C) Less than $102
D) Don’t k ...
Thu, 29 May 2014 10:27:03 GMT
Waiting for Godot begins with our protagonists Vladimir and Estragon bickering by a tree. Soon Estragon stands up and peruses the barren landscape:
Estragon: Charming spot. Inspiring prospects. Let’s go.
Vladimir: We can’t.
Estragon: Why not?
Vladimir: We’re waiting for Godot.
Just before the end of Act 1 a boy appears. After establishing that the boy works for Mr. Godot, Vladimir finally encourages the boy to deliver his message: “Mr. Godot told me to tell you he won’t come this evening but surely tomorrow.”
Surely tomorro ...
Fri, 09 May 2014 13:27:58 GMT
I was invited to speak at Fund Manager Selection 2014 last week on Manager Monitoring & De-selection. Below is a Prezi that accompanied my talk, the key messages were as follows:
The jury is out on whether anyone can consistently identify the best performing fund manager(s) in each asset class/category/strategy. However, it is crucial that we as consultants must help clients avoid the worst managers.
Many of the reasons that cause clients to review their managers (poor performance, departures, etc) are simplistic, one dimensional and often too late.
There a ...
Fri, 09 May 2014 09:36:23 GMT
The following speech was delivered at mallowstreet's "Partnership for Change" event on 1st May 2014, and is available on video here.
Let me start with a simple statement :
“If we don’t act now to provide the financial education that people in the UK need – we face one certain outcome – a socio-economic crisis.”
According to Financial Education charity pfeg; “Two-thirds of people in the UK feel too confused to make the right choices about their money.” The reason behind this is clear, a lack of app ...
Wed, 07 May 2014 14:20:27 GMT
The Budget announcement that savers will no longer be required in future to buy an annuity when they retire is a hugely important reform which must now become the catalyst for some radical rethinking of our pension system. The demise of final salary schemes and the growth of defined contribution (DC) pensions have created a powerful sense of insecurity which is proving to be corrosive in establishing an effective savings culture. The reason for this collapse in confidence is simple - people saving in DC schemes no longer have very much faith in what kind of pension they might enjoy ...
Mon, 07 Apr 2014 12:07:21 GMT
The latest draft of the revised IORP Directive was published on 27th March by the European Commission. The revised directive is aimed to achieve better governance of occupational pension schemes (Defined Benefit, Defined Contributions…Defined Ambition in the future), more informed communication with scheme members, remove obstacles for cross-border provision of services across EU and encourage schemes to invest in long term assets which support the growth of the real economy.
Here is the link to the revised directive: http://ec.europa.eu/internal_market/pensions/directive/ ...