Pension Pulse

Following my review of Kate Kelly's book, The Secret Club That Runs the World , a hedge fund investor questioned the performance of Bluegold, claiming its net IRR might be negative. That elicited the following response from Hakon Haugnes, partner and COO of Andurand Capital : I noticed your article of June 13th about Kate Kelly’s book and Pierre Andurand. I would like to highlight that there are a number of factual errors in the book, particularly relating to position size and descriptions. However, of even greater concern to me is the postscript that was published to your article following a conversation with one of your readers as this contains significant inaccuracies and unfounded allegations about Pierre Andurand and BlueGold. I would like to make it clear that nobody “piled in” at the top of BlueGold. In percentage terms, BlueGold had an annualised return of 34% even after the last year’s loss, and in dollar terms the return was in excess of $1B. Further, af...

Peter Levring of Bloomberg reports, Historically Cheap Linkers Draw In CIO at $76 Billion PFA Fund : Denmark's biggest commercial pension fund is clinging on to its inflation-linked bonds in case markets suddenly turn and prices surge. “You’ve never paid less for linkers than you do now; the pricing is at historic lows,” Poul Kobberup, head of fixed-income investment at the Copenhagen-based fund, said in a phone interview. “No one knows what the market will look like half a year from now. Linkers may well prove to be the most attractive asset class out there and the best way to guard against sudden rises in rates.” PFA wants bonds designed to hedge against inflation even amid warnings that much of the developed world is sinking into a disinflationary rut. The fund, which is also trying to build up its real estate portfolio, says it doesn’t want to risk getting caught in a bottleneck should more investors start buying inflation protection once markets turn. “We continue t...

Last week, Philip Authier of the Montreal Gazette reported, Pension bill ‘a declaration of war,’ unions say : The government’s hopes that Quebec’s municipalities and unionized workers could come to a speedy mutual agreement in their pension dispute appeared in peril Thursday. No sooner had Quebec Municipal Affairs Minister Pierre Moreau tabled a fresh version of the previous government’s pension bill in the National Assembly and called for talks, the coalition of unionized workers rejected it bluntly. “This is not a bill, it’s a declaration of war,” Marc Ranger, spokesperson for the Coalition syndicale pour le libre négociation, told reporters. He went further, calling the new constraints for the two sides to reach an agreement a kind of “holdup,” and accused Moreau of double-crossing the unions to please Quebec’s mayors seeking a way to reduce their labour costs. Ranger said now that the government has shown its hand, his members are on a war footing. The tone was tota...

Tim Kiladze of the Globe and Mail reports, Risk rising: Inside the struggle over CPP's big, bold investment bets : At first glance, the Canada Pension Plan looks like a model for a government-created retirement fund. The portfolio is growing, returns have looked strong and the plan is now among the 10 largest of its kind in the world. But as it approaches $220-billion in assets, the CPP’s investment arm, the Canada Pension Plan Investment Board, is taking on more risk than ever. The CPPIB has moved into a host of far-flung private investments such as Chinese real estate, high-yield debt, speculative energy plays and even a deal with the organization that runs Formula One car racing. Sources say it has also faced an internal struggle over investment strategy that has contributed to the departure of several key executives. As the fund moves farther away from safe holdings, like government bonds and blue-chip stocks, the ramifications could be significant for 18 million Can...

The Morning Joe staff at MSNBC recently published an excerpt from Kate Kelly’s ‘The Secret Club That Runs the World’ : Pierre Andurand was so comfortable with his $8 billion crude­ oil position that he spent the first half of his day doing a hard­ core workout with his personal trainer, casually reading the news on a Bloomberg computer terminal, and munching on lean pro­tein and toast at his London town house. It was May 5, 2011, Osama bin Laden had just been killed, and political instability in the Middle East seemed guaranteed to raise energy prices. Andurand made the short walk to his hedge-fund office at midday. Brent crude-oil futures, the commodity market based on petroleum drilled in Europe’s North Sea that he followed most closely, had been hovering in the low $120s that morning, which annoyed him. He’d been betting for weeks that oil would trade higher, but prices had not obliged. Still, with the U.S. markets having only recently opened for the day and the amoun...