Posts

Showing posts from February, 2013

Caisse Gains 9.6% in 2012

Image
Nicolas Van Praet of the National Post reports, Caisse racks up 9.6% return despite slowing economy:
The Caisse du dépôt et placement du Québec tallied a 9.6% return for its depositors last year as the global economy slowed, building more credibility for Caisse chief executive Michael Sabia in his effort to put the institution on solid footing and beat back critics.

Riding a strong performance in its stock holdings, which generated $8.8-billion in net earnings including roughly one quarter from its private equity portfolio, Canada’s second largest pension fund manager slightly beat the median 9.4% return for the country’s defined benefit pensions as estimated by RBC Investor & Treasury Services.

Net assets grew to $176.2-billion as both returns and deposits increased.

“[Equity markets] were buoyed by the actions of central banks everywhere” last year, Caisse chief investment officer Roland Lescure told reporters during a lockup to discuss the results. “It was like an oxygen ball,” …

Americans Anxious About Retirement?

Image
Michael Fletcher of the Washington Post reports, Americans anxious about retirement (h/t, Suzanne Bishopric):
Even as the economy slowly improves, the vast majority of Americans remain deeply worried about their ability to achieve a secure retirement, according to a new survey.

The poll, to be released by the National Institute on Retirement Security (NIRS) at a conference on Tuesday, found that 55 percent of Americans are “very concerned” that the current economic conditions are harming their retirement prospects. An additional 30 percent reported being “somewhat concerned” about their ability to retire.

The level of anxiety Americans feel about their preparation for retirement has continued to peak in the recession’s aftermath, a finding that the poll’s sponsors said highlights the need for policymakers to bolster the nation’s retirement programs.

“People are anxious about retirement. We know that,” said Diane Oakley, president of NIRS, a Washington-based nonprofit organization. …

Ontario Teachers' to Absorb More Risk?

Image
Tara Perkins of the Globe and Mail reports, Deal will let Ontario Teachers’ Pension Plan shoulder more investing risk:
The Ontario Teachers’ Pension Plan is aiming to be more aggressive in its portfolio, its CEO says, after the provincial government and teachers’ union struck an unusual deal to tackle the plan’s deficit.

“It lowers our risk profile quite substantially, from the board’s perspective, such that we can absorb a little more risk in our investment strategy,” Teachers’ chief executive officer Jim Leech said in an interview Monday. That might mean, for example, new flexibility to bolster investments in emerging markets, do more private equity deals, or put more of its money into stocks.

Mr. Leech has been frustrated because, just as the pension plan needs to boost investment returns, chronic deficits over the past decade have forced it to maintain a highly conservative investment profile. That has meant restricting equities to 45 per cent of its portfolio, a lower weighting th…

OMERS Gains 10% in 2012

Image
Tara Perkins of the Globe and Mail reports, OMERS posts 10 per cent return helped by private equity, real estate gains:
The Ontario Municipal Employees Retirement System has posted a 10-per-cent return for 2012, slightly above its benchmark, with private equity and real estate investments more than making up for losses in the oil and gas sector.

But, as with many pension funds, OMERS is still feeling the impact of the investment losses it racked up when the financial crisis hit. The estimate of all of the payments that its members will be entitled to is $10-billion higher than the actuarial measure of OMERS’ net assets.

“This deficit is based on a long-term projection going out several decades and in no way reflects our ability to pay pensions in the short term,” OMERS chief financial officer Patrick Crowley stated in a press release.

“Solid investment returns which have averaged 8.9 per cent per year in the four years since the financial crisis, and 8.24 per cent over the past 10 year…

Pension Funds Improving Corporate Governance?

Image
The Globe and Mail published a Reuters article, Pension funds look to strip Jamie Dimon of title:
Overseers of government worker pension funds pressed JPMorgan Chase & Co. to strip chief executive Jamie Dimon of his additional title of chairman after the London Whale fiasco, renewing a proxy battle the bank won only narrowly last year.

Pension funds, including that of the American Federation of State, County and Municipal Employees (AFSCME), said on Wednesday they filed a shareholder resolution that says the bank would be better run if the chairman and CEO jobs were held by different people.

Backers cited in a statement what they called “mounting investor concerns with the board’s oversight” following more than $6-billion (U.S.) of losses last year from bad derivatives trades linked to a London-based trader – known as the London Whale for his outsized bets.

The group also cited other problems such as the cease-and-desist orders the bank received from regulators last month that requ…

Worst Trade of the Year?

Image
Jeff Cox of CNBC reports, Worst Trade of the Year? Bet Against Bond Market:
While going long the stock market has been a great trade so far in 2013, betting that the bond market would suffer as a result could be the worst.

True, equities in a broad sense have outperformed their fixed income counterparts.

But the so-called Great Rotation trade that many market professionals had been looking for has failed to show any signs of materializing.

"Redistribution is not the same as rotation," said Kevin Ferry, president of Cronus Futures Management in Chicago and a trader not in the Great Rotation camp.

Ferry's point is not an arcane one - indeed, it goes to the heart of whether the 2013 market will be driven by an accelerated risk-on trade that finally will fulfill all those prophecies that the bond bull market is over, or if the safety play remains viable for investors' portfolios even if the stock market grows.

(Read More: Money Pouring Into Stocks 'Is Usually a Negati…

Canadian Bank Chief Sounds the Alarm?

Image
Grant Robertson of the Globe and Mail reports, Retirement savings system is falling short, CIBC boss warns (h/t, Susan Eng, VP Advocacy at CARP):
The head of one of Canada’s largest banks is proposing a dramatic overhaul of the country’s pension regime, arguing that average Canadians need more certainty and simplicity from their savings than existing investment tools provide.

Canadian Imperial Bank of Commerce chief executive officer Gerry McCaughey said Canada should reform the Canada Pension Plan to allow people to make voluntary contributions that are beyond what they already pay through their salaries.

The move could give many Canadians something they do not have with RRSPs and other investment vehicles tied to the markets: a predictable payout when they retire.

Much as Canadians understand exactly how long it will take to pay off their mortgage when they buy a house, average earners should have a pension system that helps them forecast how much money they will have at retirement, …