September 2023

How Africa’s pension funds are financing the continent’s infrastructure gap

African countries have huge infrastructure needs, and governments need private investment to help meet them, particularly considering increasing climate impacts and green development agendas. Local pension funds and other institutional investors are a significant but untapped source of finance. Two examples of pension fund consortiums, in Kenya and South Africa, offer promising models for engaging Africa’s institutional investors in closing the infrastructure financing gap and meet the continent’s growing infrastructure development needs. In just three years, these two consortiums have...

UK. TPR to ‘work more closely’ with pension administrators

The Pensions Regulator (TPR) has said it is planning to "work more closely" with third-party administrators (TPAs) and has updated on recent progress in a blog published today (13 September). The blog, written by TPR interim head of relationship supervision Cliodhna Judge, outlined how a recent pilot project on an ‘administrator relationships' function has led to better engagement with TPAs. The project, which has been running since early 2022, involved working with a voluntary administrator to "explore potential risk areas", and...

Carving a Path For Fixed Income Through Shifting Scenarios

With market expectations that the Federal Reserve is close to the end of its interest rate hiking cycle with the likelihood of avoiding a U.S. recession, institutional investors are considering a wider set of opportunities across fixed income and credit to take advantage of attractive current yields. A selective investment approach may be a prudent choice, allowing investors to withstand prolonged inflationary pressures, uncertainty over slowing growth and persistent geopolitical risks. “From our fixed-income perspective, we are back in an...

Top funds see biggest drop since 2008

A rocky market environment that affected all major asset classes saw total assets of the world's top 300 retirement plans record their worst drop since the global financial crisis of 2008, according to the latest annual survey by Pensions & Investments and Willis Towers Watson PLC's Thinking Ahead Institute. Assets of the top 300 retirement plans — including public and corporate pension funds, defined contribution plans and state-owned pension funds — fell 12.9% in 2022 to $20.6 trillion, compared with...

Japan’s pension funds to increase allocations to active fixed income

As the Bank of Japan loosens its stranglehold on yields, opening the door for them to rise in a more volatile market environment, Japanese pension funds have started to recognize the merits of actively investing their Japanese fixed-income portfolio, sources said. For instance, the Government Pension Investment Fund, Tokyo, revealed in its annual report in July that it would shift an in-house ¥9.1 trillion ($62 billion) passive domestic bond fund to be actively managed. "The decision to shift the in-house domestic...

Nigeria’s pension, four other countries collaborate to grow over $70bn assets

Nigeria’s pension sector with assets under management (AUM) in excess of N16.7 trillion, equal to $22.14 billion at of June 2023 is collaborating with four other countries in Africa to grow their over $70 billion market size. The collaboration will enable them to foster the adoption of alternative investments and will focus on green finance, a pivotal driver for bolstering various sectors of the economy. This collaboration on Monday witnessed the launch of the Pan-African Fund Managers’ Association (PAFMA), a new...

Research finds pensions struggle to determine metrics for ESG goals

There’s no one-size-fits-all approach for pension funds looking to use an environmental, social and governance lens in their investment approach, according to a new publication from the pension research council at the Wharton School of the University of Pennsylvania. Olivia Mitchell, a professor and executive director of the pension research council at the University of Pennsylvania’s Wharton Business School and one of the editors of the volume, says institutional investors are split over the long-term value of an ESG approach between pursuing...

Pension fund CPF eyes stake in Africa Finance Corporation

Pension fund CPF Financial Services is set to make an equity investment in the Africa Finance Corporation (AFC) as it seeks to diversify its investments from traditional asset classes. CPF managing director Hosea Kili made the revelation on Monday even as he remained tight-lipped on the value of its proposed investment in the pan-African lender. “We will discuss the details of the investment including the value of the equity with our fund managers in due course. This is part of our...

Swiss pension funds consider high costs as main obstacle to invest sustainably

Swiss pension funds consider high costs arising from the integration of ESG standards into their investments as the main obstacle for the implementation of an effective sustainability strategy, according to a study consulted by the Swiss government. ESG investments require a certain amount of capital to deploy for research, as those strategies can be carried out internally or through the involvement of external service providers, mandating asset managers or advisors, or via the providers of ESG financial products, for example...

Canada’s largest pension fund trims staff as it puts China deals on hold

CPP Investments, Canada's biggest pension fund, has laid off at least five investment professionals at its Hong Kong office as it steps back from deals in China, three people with knowledge of the matter said. Most were on the fund's private equity team and were informed early last month, according to two of the people. The departures have not been previously reported. They added that a managing director who was in charge of the firm's Greater China real estate portfolio had...