Pension Pulse

Svea Herbst-Bayliss and Lawrence Delevingne of Reuters report, Hedge fund Elliott eyes fresh market turbulence : Paul Singer's $27 billion hedge fund Elliott Associates is worried about Europe's prospects and is bracing for fresh market turbulence. In a letter to investors dated July 23 and seen by Reuters on Thursday, the New York-based firm told clients that it has returned 2.8 percent in its Elliott Associates, L.P. and 2.2 percent in its Elliott International Limited. While both funds beat the Standard & Poor's 500 Stock Index's 1.2 percent gain, the fund spent pages explaining its more cautious approach and warning that even after a six-year bull market in stocks, there is "no such thing as a permanent trend in the markets." It worries about central bankers' easy money policy noting that governments that have "abused the power to create 'money' have always, eventually, paid a huge price for their profligacy." "W...

Devin Banerjee of Bloomberg reports, Rubenstein Says Private Equity’s Fees, Investors Have Changed : The private equity industry has changed the most in decades as its investor base evolves and clients demand more fee concessions, Carlyle Group LP’s David Rubenstein said. “The industry has changed more in the four or five years since the crisis than in the previous 45 years,” Rubenstein, Carlyle’s co-founder and co-chief executive officer, said Sunday on the television program “Wall Street Week.” From the 1970s to early 2000s, public pension plans were the biggest investors in the industry, said Rubenstein, who started Washington-based Carlyle in 1987 and has expanded it to manage $193 billion. Private equity firms use the money they collect to buy companies and later sell them for a profit. Today, sovereign-wealth funds are overtaking pensions in allocating money to the firms, of which Carlyle is the second-biggest, he said. Large investors and those who commi...

Dan Walters of the Sacramento Bee reports, California pension funds saw $100 billion gain in 2013-14 : California’s state and local government pension systems saw their assets climb by more than $100 billion during the 2013-14 fiscal year, outpacing the national trend by several percentage points, according to a new Census Bureau report . Although payouts from the systems to retirees rose by $3 billion, additional contributions from government employers and their employees and a sharp increase in investment earnings contributed to the asset gain. By the close of the fiscal year, California fund assets had risen to $751.8 billion, a gain of 15.5 percent from the previous year, the Census Bureau reported. Nationwide, state and local pension funds saw a 12.8 percent increase. The major reason for the gain was a 46.3 percent increase in earnings to $115.8 billion. Another $30.1 billion in contributions – 70 percent of it from employers – added to the total revenue stream, off...

Jamie McGeever of Reuters reports, Deflation threat returns to stalk investors and policymakers : Fear of falling prices in a debt-laden world has returned to unnerve investors and central banks alike, as the slide on oil and commodity markets that set off a deflation scare last year has resumed with a vengeance. This summer's Shanghai stock market shock is also deepening anxiety that a cooling of the Chinese economy will lead to sharply lower global growth, while weak consumer prices are undermining assumptions that U.S. interest rates will soon rise. By this spring, the deflation scare had been fading, with investors confident the plunge in oil prices was over. They moved out of the safety of government bonds, pushing up yields in the hope that easy central bank money would gradually reflate the world economy. Victory over deflation could then be declared. However, the Thomson Reuters Commodity Research Bureau index has plummeted 10 percent in July to its lowest level...

The Canada News Wire reports, PSP Investments Reports Fiscal Year 2015 Results : The Public Sector Pension Investment Board (PSP Investments) announced today a gross total portfolio return of 14.5% for the fiscal year ended March 31, 2015 (fiscal year 2015). For the 10-year period ended March 31, 2015, PSP Investments' net annualized investment return reached 7.6% or 5.8% after inflation, significantly above the net long-term rate of return objective used by the Chief Actuary of Canada for the public sector pension plans, which averaged 6.0% or 4.2% after inflation for the period. The investment return for the year exceeded the Policy Portfolio Benchmark rate of return of 13.1%, representing $1.5 billion of value added. In Fiscal 2015, all portfolios achieved solid performances, the majority generating double digit investment returns. "We are pleased with these strong returns in a year that saw the appointment of a new Chair in November 2014 and the arr...