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The Weekly Wrap: April 25 edition

By Lisa Botter | April 25, 2014

A round-up of pensions and investment stories published across the FT Group – from Gordon Brown warning about a Scottish pensions time-bomb, to an increase in interest for coco bonds .

Cable warns of curbs unless top companies act over executive pay

Week in numbers 

FTSE 100 chief executives' pay in 2013 was 120x the average earnings of employees

Six new members were appointed to Japan's $1.25tn Government Pension Investment Fund

Asset managers bought more than 60% of seven recent issues of coco bonds

FT: Business secretary Vince Cable has written to the chairmen of the FTSE 100 remuneration committees to warn of further government intervention unless executive pay rises are curbed. FTSE 100 chief executives’ total pay in 2013 was 120 times the average earnings of their employees – up from 47 times in 1998, according to Manifest, the proxy voting agency, and consultancy MM&K.

Japan revamps pension fund policy committee

FT: The Japanese government has appointed six members to the policy-setting committee of the Government Pension Investment Fund as it seeks to impose a more aggressive approach to managing its ¥129tn ($1.25tn) in assets. The scheme, which is run independently of the government, is being urged to overhaul its bond-centric portfolio.  

Investors starting to look at commodities again

FT: Pierre Andurand, founder of Andurand Capital, has said investors are growing concerned about equity exposure and are looking to place contrarian bets in other assets. “We feel sentiment is turning. Pension funds are coming to us and saying they want to invest in commodities,” he added. Andurand’s hedge fund returned almost 25 per cent last year.

Gordon Brown warns of Scottish pensions ‘time-bomb’

FT: Former UK prime minister Gordon Brown has warned Scots face a looming pensions time-bomb as Scotland received significantly more than its population share of UK pension benefits, while campaigning against Scottish independence. Better Together strategists say worries over post-independence pensions could sway many undecided voters.

Asset managers snap up riskier coco bank debt

FT: Institutional investors are pouring billions into loss-absorbing “coco” bank bonds – or 'contingent convertible' bank bonds – in the latest sign that the global hunt for income is pushing mainstream investors into riskier, untested assets. Asset managers bought more than 60 per cent of seven recent issues of cocos from leading European banks. 

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