Pension Pulse

Tanya Macheel and Hannah Miao of CNBC report the Dow jumps more than 200 points to close above 35,000 for the first time ever: U.S. equities rose Friday with the the major averages hitting new records as they overcame concerns about economic growth from earlier in the week. The Dow closed above 35,000 for the first time ever, bringing its gain for 2021 to more than 14%. The blue chip average rose 238.20 points, or 0.68%, to 35,061.55, gaining for a fourth straight day. It made the 1,000-point trek rather quickly, having closed above 34,000 for the first time ever back in mid-April. The S&P 500 gained 1.01% to 4,411.79 and the Nasdaq Composite climbed 1.04% to 14,836.99, both new closing highs for the benchmarks. The 10-year Treasury yield bounced on Friday to 1.281%, easing concerns about the economy that the bond market triggered on Monday. The 10-year yield fell to a 5-month low of 1.13% earlier this week. “The bond market has surprised everybody,” said Nick Frelingh...

Hazel Bradford of Pensions & Investments reports that the largest UK pension funds are being urged to commit to net-zero before the next U.N. climate change conference: Large U.K. pension funds should not wait for the upcoming U.N. climate change conference, known as COP26, to commit to net-zero targets for addressing climate change, the non-profit campaign Make My Money Matter said Thursday. Make My Money Matter sent letters to 73 of the largest defined benefit funds in the U.K. , including the £64 billion ($85 billion) Universities Superannuation Scheme, Liverpool, the pension fund for academic staff employed by British universities. Other recipients included The Natwest Group Pension Fund, Barclays Bank Retirement Fund, HSBC Bank Pension Scheme, BP Pension Fund, Shell Contributory Pension Fund, BBC Pension Scheme and Rolls-Royce Pension Schemes. The letter asks them to commit to net-zero by using seven criteria that include: Matching the 1.5 degrees Celsius ambiti...

Geoffrey Morgan of the National Post reports that AIMCo is 'tilting' overweight investments away from Alberta real-estate and energy sectors:  Alberta’s public pension manager admits it is overexposed to both the oil and gas industry and Canada’s largest oil-producing province, but its chief investment officer said those weightings are coming down as strategies shift. “We go where we see the best risk-adjusted returns and the exposure we have in Alberta is driven by our own views,” Dale MacMaster, chief investment officer of Alberta Investment Management Corp., said in an interview following the release of the public pension investment manager’s 2020 annual report on June 28. “Let’s face it, for many, many years Alberta was Canada’s leading engine of growth. Alberta far outpaced the rest of the country and it had very strong attributes.” MacMaster said that outperformance has led AIMCo, which manages $118.6 billion in assets, to being slightly overweight in Alberta...

Joe Rennison, Eric Platt and Sujeet Indap of the Financial Times report that private credit joins private equity to freeze out banks: Private equity group Thoma Bravo’s $6.6bn acquisition of Stamps.com last week came with a surprising twist in the deal documents: the absence of a traditional bank financing the leveraged buyout.  Large debt-financed takeovers by the private equity world have historically been underwritten by household names on Wall Street, institutions such as JPMorgan Chase, Goldman Sachs and Bank of America.  Thoma Bravo’s private equity funds will stump up $4bn for ownership of Stamps.com, a mailing and shipping business with $758m in revenue last year.  To get its deal over the line, the group turned to four private lenders to provide the $2.6bn in debt financing. Ares, Blackstone and PSP Investments will provide the majority, with Thoma Bravo’s own lending arm making up the difference, according to people familiar with the matter.   The deal u...

AsianInvestor reports that OMERS will invest up to C$12bn more into Asia by 2025: Top Canadian pension fund The Ontario Municipal Employees Retirement System (Omers) is expecting to add up to C$12 billion ($9.5 billion) in additional investments in Asia by 2025, and intends to supplement its regional investment team by five more people to facilitate the growth. Omers currently has 10% of its total C$105 billion assets under management (AUM), or C$10.5 billion, allocated to Asia, with C$3.6 billion invested in equities and fixed income, and the remainder spread across infrastructure, private equity, and real estate. Ashish Goyal, head of Omers Capital Markets Asia in Singapore, told AsianInvestor that he expected the Asia allocation to increase to 15% by 2025. “That is the strategic intent. If [we identify] more opportunities, we will get there faster. If there are fewer, we will get there slower,” he explained. “Compared to our peers, we are [relatively new] to Asia. T...

Hannah Miao and Thomas Franck of CNBC report the Dow drops nearly 300 points on Friday, snaps 3-week winning streak: U.S. stocks fell on Friday, pushing the Dow Jones Industrials Average into the red for the week, as inflation fears overshadowed strong retail sales numbers and better-than-expected earnings reports. The Dow lost 299.17 points, or 0.86%, to close at 34,687.85. The S&P 500 dipped 0.75% to 4,327.16 and the Nasdaq Composite shed 0.8% to 14,427.24. The three averages closed the week lower to each snap 3-week win streaks. The Dow ended the week down 0.52%, while the S&P 500 dipped 0.97% and the Nasdaq Composite fell 1.87% during the same period. A U.S. consumer sentiment index from the University of Michigan came in at 80.8 for the first half of July, down from 85.5 last month and worse than estimates from economists, who projected an increase. The report released Friday showed inflation expectations rising, with consumers believing prices will increase...