IPE Awards: Pension funds must dare to invest in untested asset types

first_imgPension funds and other institutional investors need to be braver, given the environment of low interest rates, and consider strategies used by hedge funds, the 2014 IPE Conference has heard.Speaking at the IPE Conference & Awards in Vienna, Günther Schiendl, CIO at Austria’s VBV Pensionskasse, told a panel session on trends in investment and asset allocation: “We need to be more brave – we need to dare to invest in things that are untested.”His said his pension fund in particular needed to be more dynamic, investing for the long term to deliver returns of 6% year after year.“The point is, we need to deliver absolute returns,” he said. “My former boss was saying that, in that sense, we are a kind of hedge fund – and he was right.” A poll conducted among conference participants during the discussion showed that 46.51% of respondents had regularly been forced to reject an investment opportunity they liked due to regulatory, resource or operational constraints.A further 37.2% said they had once or twice had to say no to a potential investment for these reasons.Endre Pedersen, senior managing director at Manulife Asset Management, told the panel at the conference in Vienna he favoured Asian fixed income for generating stronger long-term returns in the current environment.“You need to take on a different type of risk,” he said.Meanwhile, Rick Lacaille, CIO at State Street Global Advisors, said the simple answer to the low-yield problem was equities.“In cashflow terms, we are not advocates of the second stagnation hypotheses,” he said, adding that SSgA expected global growth of between 3.5% and 3.8% next year.“People are understandably concerned when they see equity markets at record highs, but then they see profits at record highs,” Lacaille said.In Asia, he said, earnings are below trend, and this means there is an opportunity for share prices in the region to catch up.“From our perspective, the global story – the growth story – remains compelling,” he said.Paul Watters, senior director and head of corporate research at Standard & Poor’s, said pension funds would find it hard to meet their target returns in long-only strategies using conventional assets, but that what was important was to hit risk-adjusted returns.He said this meant there was a lot of interest in alternatives.“All the surveys, all the academic literature you read on that, it seems fairly clear there’s going to be continued growth in that, and asset allocation is 25% from institutional investors,” he said.The panellists discussed the investment opportunities that were emerging in fixed income as a result of the bank disintermediation process.Benoît Durteste, managing director at Intermediate Capital Group, said: “An underlying theme is there is a significant premium for investing directly.“If you can get a combination of an asset class where you are getting this premium for investing directly, and you are in an area that is experiencing significant growth, then you have a winning formula. “You are getting this combination that makes it quite attractive, which is why a number of pension funds are investing heavily in that segment.”Schiendl said that, over the years, pension funds had learned how the banks made their money, and the institutions could now do this themselves, creating a “fair and well-structured food chain”.He also said more generally that it was imperative for pension funds’ portfolios to be geographically diversified now.“It makes sense to have a global diversification and not a Europe-only diversification,” he said.last_img read more

FIFA Proposes a New Mini-World Cup

first_imgUgo Aliogo with agency reportComing barely months after expanding the 2026 World Cup from 32 teams to a 48-team format, FIFA President Gianni Infantino has proposed staging what would effectively be a new mini-World Cup, featuring eight international teams, every two years in addition to the traditional event.According to Reuters, the tournament to be known as the “Final 8”, would be the climax of a proposed global Nations League competition, part of an ambitious plan to reform international football which FIFA believes could be worth $25 billion in a 12-year cycle. In a letter seen by Reuters, Infantino, suggested that the new tournament would take place every October and/or November of every odd year starting from 2021.He said that a “solid and serious” group of investors were willing to spend $25 billion on the competition and a revamped version of the Club World Cup, which would also start in 2021 with 24 teams.The Confederations Cup, currently staged every four years in a year before the World Cup, would be abolished.The letter did not clearly indicate how many slots would be allocated to each region.The plans were sent by Infantino to the members of FIFA’s decision-making Council which still has to approve them.The new competition would run parallel to existing international tournaments such as the European Championship, Copa America, and African Nations Cup, plus the World Cup qualifying stages.It could lead to criticism that FIFA is over-complicating international football and devaluing its flagship World Cup.FIFA could not immediately be reached for comment.European soccer body UEFA and its counterpart for North and Central America and the Caribbean, CONCACAF, have already set up Nations League contests in their own continents.In both cases, the competitions involve all the national teams in their respective regions who are divided into divisions based on their rankings.There is promotion and relegation between the divisions, as in conventional domestic club leagues. UEFA’s inaugural competition will begin in September this year. Other continents would have to set up similar competitions for the tournament to be viable.Infantino suggested that similar intercontinental mini-tournaments to the Final 8 could also be organised for the top teams in the lower divisions.Infantino’s letter said that all revenue from the competition would be redistributed.“This means that FIFA as an organisation would not benefit financially from this competition,” he said.“We believe this offer is an excellent opportunity for the confederations and member associations as well as for football in general.”In a separate proposal for Europe, the letter suggested that member associations could receive up to $50 million for taking part in a single UEFA Nations League campaign although this amount would only be for the top-five ranking federations.The next biggest five European countries would receive $15 million to $20 million while the 33 lowest-ranked associations would receive a more modest $7 million.Share this:FacebookRedditTwitterPrintPinterestEmailWhatsAppSkypeLinkedInTumblrPocketTelegramlast_img read more

Will Star Lager NPFL Sponsorship Change the Game?

first_imgStill some distance to go, and space for moreFor the league to become as successful as would create significant value in our society, no one brand can make take on the responsibility alone. Despite the encouraging progress made in the management of the league in recent times, especially this year, more still needs to be done and this would require even more sponsorships. For instance, the NPFL champions received less than 100m naira in prize money last season whereas their counterparts in the South African PSL carted home about two million dollars – close to one billion naira. I am a firmer believer in the thinking that for sports to achieve its potential in popularity, the stakes have got to be high and stars have got to be created. If you put a one billion naira prize money on the NPFL crown it immediately changes the dynamics. Clubs would raise their competitive levels, strive for more professionalism, hire and pay better for quality playing and management staff, and constantly invest in the search for quality talents. More investors will buy into our clubs and ensure better marketing that would spike spectator interest. But to do this the league managers would require more sponsors beyond Supersport and Star. There is room for more of you big Nigerian executives reading this to get on board. There must be room for an official bank of the league, an official telecoms partner and even an official car company. Now is the time to get in and tell a story of how your brand helped to make it happen, because it will happen. Yep, there is still some way to go, but we are marching, with increasingly greater speed, in the right direction. Share this:FacebookRedditTwitterPrintPinterestEmailWhatsAppSkypeLinkedInTumblrPocketTelegramlast_img read more