Pension Pulse

Florence Chong of IPE Real Assets reports OMERS plans to ramp up exposure to Asia-Pacific infrastructure markets: Canadian pension fund OMERS is poised to step up its exposure to Asia’s infrastructure market, focusing on renewables, telecommunications and transport. Prateek Maheshwari, managing director at OMERS Infrastructure, told IPE Real Assets: “The intention is to further grow the success we have in the region.” Maheshwari, who is to relocate from London to Singapore next year to spearhead the investor’s expansion in the region, said: “We believe in the long-term growth and demographics of the region.” Last year, OMERS Infrastructure made its entry into the region, paying C$160m (€102m) for a 22.4% stake in Indinfravit Trust, which owns a collection of toll roads in India. Maheshwari said India’s toll-road sector could offer further opportunities as the country moved to modernise its transportation network and build new toll roads. He also anticipates opportuni...

Jeanna Smialek of the New York Times reports Fed Chair Jerome Powell sets the stage for longer periods of lower rates: Jerome H. Powell, the chair of the Federal Reserve, announced a major shift in how the central bank guides the economy, signaling it will make job growth preeminent and will not raise interest rates to guard against coming inflation just because the unemployment rate is low. In emphasizing the importance of a strong labor market and saying the Fed will tolerate slightly faster price gains, Mr. Powell and his colleagues laid the groundwork for years of low interest rates. That could translate into long periods of cheap mortgages and business loans that foster strong demand and a solid job market. The changes, which Mr. Powell detailed at the Kansas City Fed’s annual Jackson Hole policy symposium, follow a year-and-a-half long review of the central bank’s monetary policy strategy. In conjunction with his remarks, the Fed released an outline of its long-run...

Tom Arnold of Reuters reports sovereign funds rethink once-reliable real estate: The COVID-19 pandemic has forced sovereign wealth funds to think the previously unthinkable. With prime office blocks lying empty around the world, hotels half-vacant and retailers struggling to stay afloat, the funds are retreating from many of the real estate investments that have long been a mainstay of their strategies. Sovereign wealth funds (SWFs) invested $4.4 billion in the sector in the first seven months of 2020, 65% down from the same period a year ago, according to previously unpublished data provided to Reuters by Global SWF, an industry data specialist. The nature of property investments is also shifting, with funds increasingly investing in logistics space, such as warehousing, amid a boom in online commerce during the pandemic, while cutting back on deals for offices and retail buildings. Such shifts in behaviour can have seismic effects on the global real estate market, give...

Rob O'Connor of Infrastructure Intelligence reports that Gatwick cuts 600 jobs after 80% drop in passenger numbers: Gatwick Airport has announced 600 job cuts after an 80% fall in passenger numbers due to the Covid-19 pandemic. The proposed job cuts come as part of the UK's second largest airport’s plans for a significant restructure across its business, designed to further reduce operating and staff costs in light of the dramatic impact Covid-19 has had on its passenger and air traffic numbers.  The new proposals could result in the region of 600 job roles being removed from across the business, which is approximately 24% of the current number of employees. The company will now enter into a formal consultation process with employees . Compared to this time last year, the airport is operating at around 20% of its capacity and therefore still has over 75% of its staff on the UK government’s Job Retention Scheme, which is due to end in October. Current traffic and...