Global Pensions Wrap: July 13 edition
Ever thought of tearing up your strategic asset allocation and starting again? Alaska's state pension board appears to be doing just that, as it terminated no fewer than 19 investment mandates – this and more from the FT's global pension coverage.
ANC accused of pressuring public pension fund for money
The week in numbers
- Alaska's state pension board has fired 19 of its asset managers
- China wants its state-owned entities to donate 10 per cent of their stock holdings to the state pension fund
- South Africa's ANC pressured the nation's $150bn state pension fund to donate money, it has been alleged
FT: The former head of South Africa's public pension fund has alleged that the country's ruling party pressured the $150bn plan for money. Dan Matjila told a corruption inquiry that a "top politician" had asked for the Public Investment Corporation to have companies it owned fund the party's 2016 birthday rally. Mr Matjila said that while he had declined to directly fund the annual event, he had passed on the request. An evidence leader named the politician as then treasurer-general Zweli Mkhize, who denied the allegation.
Industry fears 'knee-jerk reaction' as UK watchdogs launch fund review
Ignites Europe: The Financial Conduct Authority has launched an inquiry into liquidity concerns at UK fund management companies in partnership with the Bank of England. The regulator and central bank will team up to investigate the feasibility of restricting redemptions from open-ended funds to match the time it takes managers to sell their illiquid assets at a competitive price. The BoE says many open-ended funds are suffering from “a liquidity mismatch” where they “offer daily redemptions while investing in assets that can take weeks or months to sell in an orderly way”.
Alaska pension drops nearly 20 managers in portfolio reshuffle
Fundfire: A portfolio overhaul at the $33.4bn (£26.2) Alaska Retirement Management Board has led to the fund firing no fewer than 19 of its asset managers, who ran mandates worth $2.5bn between them. The state-wide pension plan voted in June to simplify its holdings, reduce its costs and bring some strategies in-house. Among the casualties were three underperforming absolute return hedge fund strategies, the fund's entire public infrastructure allocation and a US active small-cap mandate.
China's premier calls for boost to first-pillar pension
Ignites Asia: China's premier Li Keqiang has called for state-owned businesses and financial institutions to transfer 10 per cent of their stock rights to the country's National Social Security Fund. The appeal made at a State Council meeting last week aims to prop up the country's first-pillar pension system, and may reward participating businesses by cutting their employer contributions to their system. The mechanism was first proposed in 2017 but only 23 out of thousands of state-owned enterprises have so far acceded to the request.
US Congress rejects European-style ESG reporting standards
FT: Measures to improve US companies' disclosure on environmental, social and governance issues have been blocked by the Republican-dominated House of representatives. Legislation would have seen the Securities and Exchange Commission write rules for reporting, boosting investors' access to information and bringing the US closer to uniformity with European regulatory environments. Republican members of the House financial services committee opposed further burdening companies, despite asset managers warning it is difficult to compare ESG risks across markets and sectors.
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