Pension Pulse

Roger Blitz and Eric Platt of the Financial Times report, US dollar close to erasing Trumpflation gains : The dollar index, a barometer of investors’ reflation expectations for the US economy, fell on Monday to trade at its lowest level since the presidential election, signalling that the so-called Trump trade is nearing the point of being fully unwound. Measuring the reserve currency’s performance against a basket of its peers, the dollar index fell 0.7 per cent to 98.90, a level last seen on November 11. As the dollar waned, global equities were also under pressure while havens such as the yen, gold and government bonds attracted buyers. In opening trading on Wall Street, the S&P 500 fell 0.9 per cent, as the KBW index of US banks dropped more than 2 per cent. Bank shares have fallen more than 10 per cent since they peaked earlier this month . Goldman Sachs and Bank of America, two of the biggest benefactors of the “Trump trade” that buoyed markets in the wake of the el...

Josephine Cumbo of the Financial times reports, Pensions review recommends later retirement age : Millions of people should have their state pension age pushed back a year to 68 to cut the UK’s £100bn a year pension costs, according to an independent review commissioned by the government. John Cridland was appointed to review the state pension age and has recommended it should rise from 67 to 68 by 2039, seven years earlier than currently timetabled . Experts said this would affect about 5.4m people aged under 45. The current pensionable age is 63 for women and 65 for men, rising to 65 for both by late 2018, 66 by 2020, and age 67 by 2028. Mr Cridland has also recommended that the “triple lock” — which raises the state pension by whichever is the highest of average earnings, prices or 2.5 per cent — be scrapped in the next parliament and replaced with a link to earnings . “This report is going to be particularly unwelcome for anyone in their early 40s, as they’re now lik...

Komal Khettry of Reuters reports, CPPIB joint venture buys U.S. student housing portfolios for $1.6 billion : Canada Pension Plan Investment Board (CPPIB), Singapore wealth fund GIC and property owner Scion Group LLC said on Thursday their joint venture had bought three U.S. student housing portfolios for about $1.6 billion, in its second major deal in the United States. CPPIB, which manages Canada's national pension fund and is a major global dealmaker, had formed the student housing joint venture with GIC and Scion in January last year . Canadian pension funds have been buying real estate assets around the world to diversify their investments . CPPIB and GIC will each own a 45 percent stake in the three portfolios and Scion Group will own the remaining 10 percent . The companies said on Thursday their joint venture, Scion Student Communities LP, plans to buy more student housing properties in the United States. The parties struck a similar deal for a student hou...

Kirk Falconer of PE Hub Network reports, OPTrust punches above its weight with private equity strategy : OPTrust has greatly expanded its private equity program, deploying a strategy that gives the mid-sized pension fund access to opportunities usually available only to larger institutions. OPTrust, which invests on behalf of OPSEU Pension Plan, the retirement system for about 90,000 Ontario public employees, this week reported a net return of 6 percent for 2016. Net assets grew to more than $19 billion from $18.4 billion in 2015. Overall numbers were boosted by a strong performance in the PE portfolio. PE investments returned a net 20.6 percent last year, up from 14.4 percent in 2015 . These results cap a major five-year increase in OPTrust’s PE allocation. At the end of 2016, the portfolio held nearly $1.6 billion in assets, more than triple the amount in 2012. Private equity’s share of total assets rose in this period to 9 percent from 4 percent. OPTrust’s notional target...

Geoff Cutmore and Nyshka Chandran of CNBC report, Canada Pension Plan looks to raise its bet on China : China's gradual market liberalization may be good news for Canadian pensioners. Canada Pension Plan Investment Board ( CPPIB ), the country's largest pension fund, currently has 4 percent of its portfolio in the mainland — a figure that president and CEO Mark Machin said is too low for a globally diversified portfolio such as his. But he plans to increase that share as the world's second-largest economy opens itself up. "We want to significantly increase our investment here over the long term," he said, explaining that his fund is "substantially" underweight relative to GDP, but not necessarily relative to available market cap . Last month, the People's Bank of China allowed foreign investors to hedge bond positions in the foreign exchange derivatives market — a move that many strategists deemed significant to overall market reform. ...