Latest articles from Ian Smith

Editorial: Good riddance to bad rubbish?

Good riddance?

In the past week we've reported on another pension scheme ditching hedge funds, this time Cornwall Pension Fund, due to concerns over transparency and cost.

Are iPads harming or helping trustee boards? The cases for and against tablet governance

Any other business: ​​In the technology world, a recently unearthed speech by Steve Jobs in 1983 predicting the world dominance of the personal computer is clear evidence of the Apple co-founder’s vision.

Institutional investors warn pension funds not to become shadow banks

Chief investment officers at two historic institutions have raised concerns about pension funds stepping into the space left by banks constrained by tougher capital requirements, pointing to the potential risks and costs.

Editorial: You're right from your side

Tug of war...

One in seven trustees doesn't sound like a lot. But when you think that could be one person on every pension scheme board, the proportion starts to feel a bit more tangible.

How the DA pensions bill could affect your scheme

Schemes have been left pondering how their benefit structures would be considered under the the government’s latest pensions bill, which codified three types of pension scheme, including “shared risk” schemes.

Pensions bill looks to provide substance to 'defined ambition'

PE editor Ian Smith

Editor's blog: The pensions reform hamster wheel is spinning again and the industry is rushing to see what surprises are hidden in the pensions bill laid before Parliament today.

As promised, the bill clarifies the distinction between three types of scheme structure, and more importantly gives the industry an extra initialism meaningless to ordinary people – "DA" for defined ambition: 

Definitions DWP

Source: Pension Schemes Bill

It also demonstrates the difficulty of hardwiring the 'soft promise' (translation: promise that is not quite a promise) in DA schemes such as collective defined contribution, with a large segment codifying the target returns embedded in these types of schemes. 

"As long as they make sure the target benefits are not guaranteed... it is not subject to the scheme funding requirements," explained Danny Wilding, partner at Barnett Waddingham.

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Editorial: Emerging versus frontier markets

Frontier markets take on emerging markets...

Emerging market advocates are finding that where there were once believers, there are now sceptics, cynics and outright deserters. 

Admit it: social impact investing is done for the social impact

PE editor Ian Smith

Editor's blog: There has been a flurry of stories this month on local authority pension funds allocating to investments that target a positive social or environmental impact, giving a shot in the arm for proponents of activist investment.

But at all points the pension funds involved have been careful to stress, as per their fiduciary duty, that the return drivers come before any starry-eyed bid to make the world a better place.

We reported on West Midlands Pension Fund setting aside £40m for small and medium-sized enterprises in the Birmingham area

“In terms of social impact, most immediate and important would be generating and hopefully sustaining employment in the West Midlands,” said Antony Ellis, communications officer at the fund, while stressing the investment is expected to hit the fund's target annual return of 6.9 per cent.

We then reported on Strathclyde Pension Fund making four allocations to renewable energy and drug development companies as part of its New Opportunities Portfolio, which has a preference for investments with a positive impact.

But pension schemes are taking on risks that they have not taken on previously, with managers of whom they often have no prior knowledge. 

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Editorial: Guidance without the notes

Your choice...

It is hard to imagine, but not long ago there was a time of blissful ignorance when the industry was not obsessed with the words ‘guidance guarantee’.

Strathclyde taps renewables as alternatives fund swells

Strathclyde Pension Fund has removed the £300m maximum from its New Opportunities portfolio, and will review its 3 per cent allocation limit, as it makes a suite of diversifying investments predominantly in renewable energy.