Climate bond standards aim to attract institutional investors

first_img“These new rules help investors identify green bonds that make a difference from paler green bonds, where the ambition levels are too low to make a real contribution to tackling climate change,” he added.Hermes Real Estate’s head of responsible property investment Tatiana Bosteels, also chair of the Property Working Group of the Institutional Investor Group on Climate Change (IIGCC) said there was a “huge opportunity” to unlock the potential for energy efficiency within the real estate market.“But to do this effectively and at scale will require more confidence in the tools, standards and models available to measure green buildings and their financial performance.”The 16-strong working group includes a representative from the European Commission’s Joint Research Centre; Brian Rice, lead investment officer in the corporate governance department of the $183bn (€133bn) California State Teachers’ Retirement System; and Simon Brooker, executive director at Australia’s state-backed Clean Energy Finance Corporation.It said it imagined climate bond opportunities would stem from green mortgage-backed securities in countries where building codes met the requirement of the standard, but also from opportunities to finance improvements within the existing stock as long as these would achieve a 50% or higher emissions reduction.Kidney added: “In the long run, we expect green property and urban improvement bonds to be more than 50% of the green bonds market.“But this will depend on confidence among investors that the buildings are making a genuine contribution to the transition to a green economy we need to head off catastrophic climate change.”The standards will now be put out to consultation and then submitted to the Climate Bond Standards Board for confirmation.The working group cited New York, Toronto, Tokyo, Sydney and London as cities targeted for an initial rollout of the standard due to the high volume of property already within the top percentile.A number of pension funds have committed to reducing the carbon footprint of buildings, with the UK’s Environment Agency Pension Fund and the Clwyd local authority scheme last year investing in the Threadneedle Low-Carbon Workplace Trust.,WebsitesWe are not responsible for the content of external sitesLink to public consultation on climate bond standards Climate bonds backed by property should be barred from drawing returns from more than four-fifths of the real estate market, according to draft standards.The Climate Bonds Green Property Working Group has proposed that buildings used for Climate Bonds should be within the top 15% of their regional market and able to achieve “deep cuts” to carbon emissions.The standards – covering commercial and residential property, as well mortgage-backed securities and finance schemes that would reduce emissions within buildings – aim to increase the scale of all green property initiatives to attract institutional investors “needed to drive significant improvements in the building environment”, the draft said.Sean Kidney, chief executive of the not-for-profit Climate Bond Initiative, said the cuts to a property’s emissions were needed if “catastrophic” climate change were to be avoided.last_img read more

Jeremy Woolfe: In Brussels, tomorrow never happens

first_imgThe authority, the Paris-based European Securities and Markets Authority (ESMA), says it needs an extra year. Otherwise, it cannot achieve spelling out highly complex legislative details – the flesh on the bone of the basic package. ESMA has to produce both the necessary regulatory technical standards (RTS) and the implementing technical standards (ITS). This is necessary to enable fund management interests, including pension funds, to set up compliance systems in time for the implementation deadline.The present situation? Pretty clearly revealed in Brussels is that the situation is, simply, “confusion”. The European Parliament has yet to agree to a new programme. Delay for a year acceptable? Delay to be agreed by a period yet to be set? No delay at all? Commentary is varied.One qualified bystander, Finance Watch, an NGO, has it officially that “MEPs have agreed there is no need to delay the entire package … the entire package should start to apply as planned, on 3 January 2017”.Conversely, MEP Kay Swinburne appears to accept the delay, possibly of a year. At a Parliamentary committee’s “roasting”, but politely called a “public exchange of views”, the British Conservative stated: “I would prefer us to do it correctly, even if it takes longer.” She is seeking a better model for “the proposed changes to our capital markets”. In fact, she advocates a list of changes.Sheenagh Gordon-Hart, formerly of JP Morgan and now of 2020 Regulatory Consulting, tells IPE: “We just have to hope the Commission comes up with a sensible [time] framework.”Financial regulation expert and former regulator Elizabeth Todd at law firm Pinsent Masons said a substantial postponement was unlikely, adding: “What should firms do with this conundrum?” The investment industry, she says, should do what it reasonably can before 3 January 2017, including anticipating any necessary IT systems changes arising as a result of new reporting requirements.She adds: “We should not expect any changes to agreed policy positions.” It appears any delay would be primarily for the purposes of allowing national regulators and companies to cope with the impact of regulatory change to their systems.Todd concludes: “Sitting back and waiting for more certainty on delay is not an option. This is now a clear message from the FCA”.Another commentator raises the spectre that parts of the financial services industry may, actually, be happy about any delay. A muffled giggle in some quarters? Overall, what’s at stake? Obviously, a lot. To use words from Ernst & Young, the Directive “will bring about fundamental changes to distribution of wealth and asset management products and services in the EU”.For instance, it will set up an EU-wide ban on independent financial advisers or discretionary portfolio managers accepting or retaining payments/inducements. Among other upgrades, it would, says the Big Four firm, apply stricter controls on algorithmic trading, and open non-discriminatory access to trading venues and central counterparties. Consternation is rife as the European Commission delays new financial rules and regulations, writes Jeremy WoolfeDelays to new financial rules and regulations from Brussels are hardly something new. Being on time would seem to be the exception.  Blame for the notoriety lands on different targets. Perhaps the European Parliament?  More likely in gatherings of member state representations. Or, to be safe, pin the blame on rogue-ish lobbyists! But probable delays caused by the European Commission itself, together with its affiliated authorities? Never!But now it’s happened. And to MiFID II, the revised Markets in Financial Instruments Directive, the cornerstone of building towards a more efficient, safer financial sector. Europe’s most far-reaching securities reform to date comprises a package laboriously put together in response to the 2009 Pittsburgh G20 meeting, in response to the 2007-08 crisis. The Directive was finally endorsed by the EU leaders in April 2014. It was to be transposed into national legislations by July 2016 and be in force by 3 January 2017. In August 2015, the Commission ruled out notions of delay. Now, it is considering requests for delay.Hardly surprisingly, consternation in Brussels is rife. The predicament has arisen simply because there are insufficient resources in the authority charged with the task of writing a mountain of pages of interpretative “delegated acts” to the package.last_img read more

Karsten Kallevig takes top real estate role at Norges Bank IM

first_imgKarsten Kallevig has been appointed chief executive at Norges Bank Real Estate Management, starting in his new position on 1 January 2016.Kallevig, who joined Norges Bank Investment Management (NBIM) in 2010 as global head of real estate asset strategies, has been CIO for the asset class since 2011.Norges Bank Real Estate Management, which manages NBIM’s investments in unlisted real estate, was established as a separate division in July 2014.A dedicated leader group for the real estate area was established in October that same year. The Norwegian government recently called for the Government Pension Fund Global (GPFG) to invest in unlisted clean energy and emerging market infrastructure.Separately, in a report co-written by Leo de Bever, former chief executive of the Alberta Investment Management Corporation and commissioned by the Ministry of Finance last year, the government was urged to broaden the GPFG’s property mandate to allow it to benefit from urbanisation in emerging markets.Kallevig’s new role will see deputy chief executive Trond Grande, who had managed the division, hand over day-to-day responsibilities. Yngve Slyngstad, NBIM chief executive, said Kallevig was taking on a “big challenge”, with the fund aiming to invest approximately NOK50bn (€5.2bn) in real estate annually.“Real estate differs from the fund’s two other asset classes, equities and fixed income,” Slyngstad said.“Kallevig has the background and experience to lead this organisation.”Between 2006 and 2010, Kallevig served as head of Japan at Grove International Partners.He also previously worked for Soros Real Estate Partners in London.last_img read more

Dutch doctors’ scheme cuts defensive equities, hedge funds

first_imgSPH, the €10bn Dutch pension fund for doctors, cut out its defensive equity strategies from its portfolio last year.In its annual report for 2016, it said that the expected added value in terms of risk and return did not outweigh “the complexity and limited manageability of the investments”.SPH had invested €160m through PGGM’s Developed Market Alternative Equity fund, which deviates from the market capitalisation of the classic indices.Its aim was to increase the stability of its equity portfolio while improving returns, and with a limited turnover, the scheme said. When it divested its holdings at November-end, the allocation’s year-to-date return was 10.1%. In addition, SPH said it intended to fully divest its holdings in hedge funds, as the allocation’s expected added value did not outweigh costs, complexity, and its limited managebility.By the end of 2016 the scheme had reduced its allocation to 0.9%. Last year, the hedge fund allocation generated a 2.6% return.The doctors’ scheme posted an overall result of 8.5% for the year. It attributed the slight underperformance relative to its benchmark to the completion of the transition from active to passive mandates as well as a “badly performing” position in Chinese A shares, which it said was very difficult to divest.Alex de Waal, SPH’s director, explained that the Chinese supervisor had set many requirements for the divestment.SPH said the mandate still comprised €26m at the end of June 2017. Over the course of last year the mandate gained 4.1%, and it made a further 1.2% during the first six months of 2017.According to the pension fund, equity in emerging markets, the US, and small caps (16.8%) had performed well. In contrast, Japanese equities hardly generated a return. Overall, the scheme’s equity holdings delivered 12.3%.SPH added that it had reduced the country risk for its government bonds by diversifying into government issuance from Finland, Belgium, and Austria. It said bonds returned 6.7% in 2016 as a consequence of falling interest rates.Emerging market debt yielded 12.2% thanks to the combination of falling interest rates and the appreciation of local currencies relative to the euro.With a profit of 16.3%, commodities were the best returning asset class, largely due to rising oil prices.The pension fund indicated that it wanted to increase its current 3.2% stake in infrastructure to 5% of its overall portfolio. In 2016 the allocation delivered a 10.6% return.Private equity was the only asset class that contributed negatively to SPH’s overall result. The scheme said it was divesting its holdings. It reported a 17.8% loss on its two remaining positions, comprising 0.1% of its entire investment portfolio.Last year, the GP scheme introduced a new steering model for its balance sheet, focusing on a reduced allocation to more risk-bearing assets – including equity and property – if its funding decreased strongly.SPH said it had incurred asset management and transaction costs of 0.44% and 0.09%, respectively, while spending €570 per participant on administration.The doctor scheme has 19,060 participants in total, of whom 11,030 are active GPs and 6,785 are pensioners.At March-end, its coverage ratio stood at 129.8%. Last year, it granted its participants an indexation of 1.4%.last_img read more

ABP purchases €360m of Belgian green bonds

first_imgThe metal industry scheme PME invested €100m in the CI III fund from Copenhagen Infrastructure Partners, which backs large projects for wind and solar energy as well as heat generation from biomass and waste.According to Marcel Andringa, the scheme’s executive director for asset management, the investment fitted within PME’s goal to have at least 10% of its investment portfolio contributing to the UN’s sustainable development goals by 2020.The investment in CI III is part of PME’s €250m mandate to its asset manager MN to increase its impact investments.According to PME, CI III will report on returns, carbon reduction and job creation.Copenhagen Infrastructure Partners was established in 2012 by a team from Danish energy firm DONG, in co-operation with the €31bn pension fund PensionDanmark.At the moment, the company manages three investment funds with total assets of €5bn. The €409bn Dutch civil service scheme ABP has purchased €360m worth of green bonds issued by the Belgian government.Meanwhile, PME, the €47bn pension fund for the metal and electro-technical engineering industry, has taken a €100m stake in a Danish fund for sustainable energy projects in Europe and the US.ABP said its investment was part of its goal to double its stake in sustainable development to €58bn by 2020.The scheme added that it would announce its progress in its annual report for responsible and sustainable investment later this year. Belgium wants to use the proceeds of the 15-year green bonds for projects including the construction of wind farms and rail infrastructure in and around Brussels.ABP declined to be specific about expected returns, but said that it fitted “within the regular expectations” for this asset class.Last year, the scheme purchased more than €100m of green bonds from SNCF Réseau, the manager of the French rail network.After France, Belgium is the second country in the euro-zone to issue green bonds.Last year, the large Dutch asset managers APG – ABP’s asset manager – PGGM and MN signed up for €967m of 22-year French green government paper.At the time, APG said that returns would be 1.74%, attributing the modest surplus return, relative to regular government bonds, to France’s desire to make a success of the euro-zone’s first green bond issuance.PME increases investments in sustainable energylast_img read more

Exclusion policy dampens publisher scheme’s equity returns

first_imgVan Wierengen said the benchmark had not been adjusted in the wake of the exclusions.The pension fund’s equity holdings amount to 27% of the total portfolio and are passively invested through BlackRock.During the past five years, the pension fund’s overall returns had consistently outperformed the MSCI.Before 2017, the pension fund only excluded a handful of manufacturers of controversial arms. However, drawing on surveys of its members, last year it extended its exclusion policy to cover human rights, labour conditions, environmental issues and corruption.The exclusion criteria are based on the UN Global Compact Principles, which many Dutch schemes apply. The pension fund said it expected socially responsible investment would generate better returns for the long term, but made clear it would accept costs in the short-term if these were not too high.It added that it wanted to intensify its ESG approach in the coming years.Overall return of 4.8%During the past five years, the Wolters Kluwer scheme reported annual results of 7.4% on average, equivalent to an outperformance of one percentage point on average.The pension fund’s investment gained 4.8% overall in 2017, with fixed income, property and private equity generating -3.3%, -0.3% and -1.6%, respectively.Its currency hedge contributed 4.3% to the result while it lost 1.2% on its interest hedge.The scheme said it had rebalanced its securities portfolio, after the quickly rising value of its equity holdings had exceeded its 35% strategic securities allocation by three percentage points.It had subsequently reinvested the proceeds in its liability-driven investing and credit mandates. At the end of last June, the pension fund’s coverage ratio stood at 112.8%.The scheme granted its members an index-linked benefit increase – the first since 2010 – of 0.04% last January. Returns for 2017 at the €1.1bn pension fund of a Dutch publishing firm were negatively affected by the exclusion of companies from its investment universe as part of its ESG policy, the scheme said in its annual report.Last year, the Wolters Kluwer pension fund tightened its approach on environmental, social and corporate governance (ESG) matters, which included expanding its exclusions.Wolters Kluwer’s equity holdings usually perform in line with their reference portfolio, but last year’s returns fell 0.5 percentage points short of the MSCI benchmark, which returned 9.9%.“We assumed we had removed the bad apples from our portfolio, but they seemed to have performed pretty well,” said Jaap van Wieringen, chief investment officer of the pension fund.last_img read more

NEST targets private credit innovation for growing DC portfolio

first_img“DC pension savings are soon going to dominate the market and fund managers are beginning to recognise this. They’ll need to think creatively about what this new generation of savers requires and be willing to negotiate seriously on fees.“We’re looking to work with innovative fund managers who see the future potential in this market and want constructive, long term relationships with their clients based on pension savers’ best interests.” NEST’s Mark Fawcett speaking at an infrastructure conference earlier this yearNEST said it had conducted “extensive research and analysis” on private debt markets and was confident that a DC-appropriate solution could be found “with some innovation” from asset managers.The “traditional” closed-ended private debt vehicles were unlikely to fit NEST’s requirements, it said. As a growing DC fund NEST’s investment options needed to be “evergreen” and “scalable”, the scheme said.It indicated that it was open to debt-only or multi-asset strategies, and envisaged opening up to direct investments and co-investment opportunities in the future as its asset base grew.The scheme said it was “interested in working with managers with the experience and motivation to support NEST in developing its in-house expertise in this area”.Fawcett issued a similar challenge to infrastructure investment managers earlier this year, saying providers needed to “completely recalibrate” their approaches to access the DC market.In July, the scheme launched a commodities allocation run by US firm CoreCommodity Management, with the intention of investing up to £200m.NEST tenders are available here.This article was amended on 6 September to update NEST’s assets under management. The UK’s National Employment Savings Trust (NEST) has challenged fixed income managers to come up with a scalable, open-ended structure for private debt suitable for its growing defined contribution (DC) client base.In a tender notice published today, the £3.8bn (€4.2bn) multi-employer scheme said it believed its members could benefit from exposure to the asset class, despite it rarely being accessible to DC investors.The scheme called for managers to come up with innovative ways of accessing unlisted infrastructure debt, real estate debt, and corporate loans.Mark Fawcett, NEST’s chief investment officer, said: “We don’t buy the argument that private credit is out of reach for DC schemes. Our members should have access to the same opportunities as pension savers in large, sophisticated [defined benefit] schemes.last_img read more

Merger will mean benefit cuts of up to 9.3% at Dutch dental scheme

first_imgHenk van der Meer, chairman of Tandtechniek, confirmed that pensions supervisor De Nederlandsche Bank (DNB) had also approved the scheme’s plan to join PFZW.In its annual report for 2017, the pension fund for dental technicians explained that it had already factored the transition costs into its coverage ratio.In May 2017, the previous VO rejected the board’s proposal to merge with PFZW on 1 January 2018. Instead, it took the board to court, alleging that it had been responsible for “culpable or apparently improper” management during the past few years.In March 2018 three unions withdrew their representatives from the VO at the request of the pension fund’s board. The board also ruled out further co-operation with the VO due to the court case.As a consequence of the delay, Tandtechniek appointed IT firm Centric as its administrator at the start of this year. The scheme was among the industry-wide pension funds that had to leave Syntrus Achmea Pensioenbeheer in 2016 and 2017. A struggling Dutch pension fund for dental technicians will have to cut pension payouts by up to 9.3% when it joins the healthcare industry scheme PFZW.In a letter to its members, the €800m Tandtechniek said the exact discount would depend on the funding of both pension funds on the day of the transfer, which has now been set at 1 October.At the end of July, the coverage ratio of Tandtechniek stood at 94.6%, while PFZW’s funding was 100.9%.The board of dental scheme said its new accountability body (VO) – which represents the members – had supported the plan to join the €197bn PFZW, the second-largest scheme in the Netherlands.last_img read more

Make the most of the beach life in this Gold Coast house

first_img22 Korina Ave, Kirra.“We’ve been living there five years but my family has been in the area for generations,” Mrs Green said.“I love the location and the convenience, it’s just so close to everything.“Kirra is just iconic for the surf and beaches too.”The four-bedroom, two-bathroom residence has a modern interior with a neutral palette and wood features.More from news02:37International architect Desmond Brooks selling luxury beach villa14 hours ago02:37Gold Coast property: Sovereign Islands mega mansion hits market with $16m price tag2 days ago The Greens have made some changes over the years to give it a more modern and fresh look.“We put in a new kitchen and repainted and put up the electric gates,” Mrs Green said.They have decided to sell so they can buy a larger house.“We’ll stay in the area but we just need a bigger home,” Ms Green said. 22 Korina Ave, Kirra.FANCY living within walking distance of some of the Gold Coast’s best beaches and most popular cafes and restaurants?Make the most of coastal living in this house, which is on a 663sq m block in a quiet cul-de-sac.It was the location that attracted owners Samantha and Shane Green to the Korina Ave property. 22 Korina Ave, Kirra. MORE: Why I live in Broadbeach Waters 22 Korina Ave, Kirra.It has an open floorplan at the front end of the house where a kitchen, family, living and dining rooms merge.All four bedrooms are at the rear of the house.The main bedroom has an ensuite and walk-in wardrobe while one of the others has access to a terrace.MORE: Are these the best views on the Gold Coast?center_img There are two outdoor patios, one of which extends onto a large terrace with a saltwater pool.The house also has a tandem double garage with internal access and an electric security gate. 22 Korina Ave, Kirra. 22 Korina Ave, Kirra. Video Player is loading.Play VideoPlayNext playlist itemMuteCurrent Time 0:00/Duration 0:54Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -0:54 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 Rate1xFullscreenAndrew Winter: To sell or to renovate?00:55last_img read more

Gold Coast real estate agent selling Quade Cooper’s property

first_img MORE NEWS: Coast apartments contributing to the average Australian home’s reduced size Quade Cooper and his partner Laura Dundovic are selling their Brisbane home. Picture: Adam HeadA GOLD Coast real estate agent is helping celebrity glamour couple Quade Cooper and Laura Dundovic market their Brisbane property.Ed Cherry of Sophie Carter Exclusive Properties is used to selling real estate on the southern Gold Coast but jumped at the chance to co-list rugby star Cooper’s luxury Bulimba residence.More from news02:37International architect Desmond Brooks selling luxury beach villa14 hours ago02:37Gold Coast property: Sovereign Islands mega mansion hits market with $16m price tag2 days agoMr Cherry has also been helping them out by showing them property on the Gold Coast.“I’ve been assisting Quade and Laura for some time now and have been sourcing them various property ventures on the Gold Coast,” he said.Cooper and Dundovic put the property on the market earlier this month. MORE NEWS: Inside Quade Cooper and Laura Dundovic’s Brisbane property.last_img read more