Pension Pulse

Shawn Tully of Fortune reports on Greece’s do-or-die moment : If Greece’s newly elected government sticks to its sloganeering stance, it will probably exit the Euro. And that could snowball into an economic disaster. It’s the showdown the world’s been dreading. On January 25, the ultra-leftist Syriza party won an overwhelming victory in the Greek parliamentary elections, defeating center-right New Democracy and ousting its leader, prime minister Antonis Samaras. Syriza’s chief and Greece’s new prime minister, Alexis Tsipras, is brazenly defying the European nations and institutions that support its stricken economy. Tsipras lost no time declaring that his triumph marks the moment when Greece “leaves behind catastrophic austerity … and five years of humiliation and suffering.” Tsipras blames Greece’s descent on the slate of tough, even brutal, reforms that its EU neighbors demanded in exchange for gigantic bailouts. He’s pledging two major shifts in policy that, if enacted, w...

Lisa Abramowicz of Bloomberg reports, Jeffrey Gundlach: Fed Is on the Brink of Making a Big Mistake : Jeffrey Gundlach says the Federal Reserve is on the brink of making a big mistake. U.S. central bankers have been talking about raising benchmark borrowing costs this year even though the outlook for global growth is worsening as oil prices tumble. If Fed Chair Janet Yellen goes ahead with this plan, she runs the risk of having to quickly reverse course and cut interest rates, according to Gundlach. “There’s no fundamental reason to raise interest rates,” Gundlach, chief executive officer at DoubleLine Capital LP, said at a conference yesterday in Hollywood, Florida. “My idea is the Fed raises rates for philosophical reasons. That may be short-lived.” Policy makers concluded a two-day meeting in Washington today. The Fed maintained its pledge to be “patient” on raising interest rates and boosted its assessment of the economy and labor market, even as it expects inflation to ...

Euan Rocha of Reuters reports, Canada's PSP taps new CEO from rival pension fund manager CPPIB : Public Sector Pension Investment Board (PSP), one of Canada's largest pension fund managers, announced on Tuesday it has chosen André Bourbonnais as its president and chief executive officer. Bourbonnais joins PSP, which manages the pension funds of federal public-service workers, from rival pension fund manager the Canada Pension Plan Investment Board (CPPIB), where he was head of private investments. He replaces John Valentini, who was filling in as CEO after Gordon Fyfe left PSP last year to head the British Columbia Investment Management Corp (BCIMC). PSP said Bourbonnais brings an extensive global network and proven portfolio management skills to his new job. Separately, CPPIB announced that Mark Jenkins, who has been overseeing its direct private equity investments and its natural resources investment programs, will take on the role being vacated by Bour...

David Sirota of the International Business Times reports, Billionaire Currency Trader George Soros Warns Against Investing Public Pension Money In Hedge Funds : Another towering figure in the financial industry is warning major pension systems to beware of investing retiree money in hedge funds. During a Thursday meeting at the World Economic Forum, billionaire investor George Soros cited management fees charged by hedge funds in arguing that steering billions of dollars of public employees‘ money into such products is imprudent. “Current market conditions are difficult for hedge funds,” said Soros, who recently retired from his currency focused hedge fund business. “Their performance tends to be equal to the average plus or minus a 20 percent management fee.” (correction: 2% management fee and 20% performance fee). He said that while “you will always have some hedge funds that will provide outside performance ... to put a large portfolio into a hedge funds is not a winning stra...

Nick Squires of the Telegraph report, Greeks hand stunning victory to anti-austerity Syriza : Greece set itself on a collision course with the rest of Europe on Sunday night after handing a stunning general election victory to a far-Left party that has pledged to reject austerity and cancel the country’s billions of pounds in debt. In a resounding response to the country’s loss of financial sovereignty, Greeks gave Syriza 36.5 percent of the vote, according to the first official projections. It will be able to send between 149 and 151 MPs to the 300-seat parliament, tantalisingly close to a majority. The final result was too close to call but if the party wins 150 seats or fewer, it will have to form a coalition-- possibly with the Independent Greeks, a Right-wing party that also opposes the international bailout. (note: they did forma coalition, see below). New Democracy, the conservative party which had governed since 2012, won just 27.7 per cent of the vote. Led by th...