Wellcome Trust complains to chancellor over possible AstraZeneca deal

first_imgIn its letter, Wellcome said it had major concerns because of the importance of the pharmaceutical industry to wider biomedical research.Wellcome’s mission is to improve human and animal health, principally through funding biomedical research and its translation into healthcare.More than three-quarters of its £750m annual spending currently supports research in the UK.The letter, from Wellcome’s chairman Sir William Castell and director Jeremy Farrar, said: “Pfizer’s past acquisitions of major pharmaceutical companies have led to a substantial reduction in R&D activity, which we are concerned could be replicated in this instance.“If AstraZeneca does merge with Pfizer, we think it essential the R&D and manufacturing capability it offers to the UK is maintained and, critically, that its investment in its major R&D facility in Cambridge is not lost.”Wellcome said it was encouraged by Pfizer’s open letter to the UK prime minister, which included a commitment to complete and operate AstraZeneca’s Cambridge R&D facility, to employ a minimum of 20% of the combined company’s R&D workforce in the UK, and to maintain manufacturing capacity in the UK.But the letter continued: “We believe, however, that it is critical the government holds Pfizer to these commitments should its offer succeed, as the company has not always honoured similar undertakings made following past acquisitions. We would be pleased to hear how you propose to do so.”Wellcome declined to comment on any presumed shareholding in AstraZeneca. The Wellcome Trust – the UK’s largest charitable foundation, with a £16.5bn (€20.2bn) endowment – has written to chancellor of the exchequer George Osborne to raise “major concerns” about the proposed takeover of Anglo-Swedish pharmaceutical company AstraZeneca by US multinational Pfizer.The possible takeover, which has so far been rejected by AstraZeneca, has provoked a wave of criticism in the UK and Sweden because of its potential effect on jobs.Andres Borg, Sweden’s finance minister, has claimed Pfizer broke promises made to maintain research investment in Sweden when it bought local drug maker Pharmacia in 2002.AstraZeneca is one of only two large pharmaceutical companies to pursue substantial research and development (R&D) activity within the UK.last_img read more

CEE roundup: Russia, Lithuania, Latvia

first_imgIn the context of ongoing government discussions about making the system voluntary, the Bank of Russia pointed out that membership of the existing voluntary private system had fallen by 400,000 to fewer than 6.4m, citing waning confidence in the system and negative returns.It said it doubted whether employers, faced with declining economic growth, would be in a hurry to establish corporate pension schemes.The NSPFs are set to receive the frozen contributions from the second half of 2013 once they convert to joint-stock status, meet minimum capital requirements and join the guarantee system, as stipulated by the law that came into effect this year.While the funds providing compulsory pension insurance have until the beginning of 2016 to fulfil the new obligations or leave the market, the major ones have not wasted any time.As of the beginning of October, NSPFs accounting for 91% of total assets had converted their status to companies, while those in the new guarantee system accounted for more than 85%.In other news, Lithuania’s voluntary second-pillar funds posted further healthy results in the third quarter of 2014.According to the Bank of Lithuania, the sector regulator, as of the end of September 2014, year-to-date returns averaged 6.04%, some 2.5 times higher than a year earlier.The five funds with the highest equity exposure generated the best returns, with those investing up to 100% in shares generating 6.88%.The nine funds with up to 70% equity exposure returned 6.4%, while the four funds with a low exposure of up to 30% produced 6.21%.In contrast, the eight bond-only conservative funds generated returns of only 3.15%.Over the nine-month period, assets under management grew by 14.3% to LTL6.2bn (€1.8bn).In the case of the third pillar, assets grew by 13.9% to LTL148m.Returns averaged 5.8%, with the balanced funds generating the highest average return, of 6.58%, followed by high equity-weighted funds at 6.51%, while the bond-orientated funds generated 2.57%.In neighbouring Latvia, year-to-date returns for the mandatory second-pillar funds were somewhat lower, averaging 4.21% for their 1.2m members, according to the Association of Commercial Banks of Latvia.Balanced and higher-risk funds returned 4.36% and 4.35%, respectively, while the conservative funds generated 3.79%.Assets grew by 14.5% to €1.9bn.For the much smaller third-pillar system, with €259.7m of assets and 229,318 members, returns average 4.19%. Russia looks set to extend the 2014 moratorium on contributions to the mandatory pension fund system for a further year.In October, the bill passed its first reading in the Duma (lower house) by an overwhelming majority, with 242 deputies voting in favour, and only five against.The Bank of Russia, the central bank, estimated in its October Financial Stability Review that the non-state pension funds (NSPFs) would forgo some RUB243bn (€4.5bn) as a result of the 2014 moratorium, and a further RUB280bn the following year if the bill passes its subsequent readings and is signed off by president Vladimir Putin.The central bank expressed concerns that the moratoria might hamper long-term investment growth, exacerbate the downturn in economic growth and raise the cost of internal funding.last_img read more

Dutch schemes must increase transparency on appointments, outsourcing

first_imgThe researchers noted that schemes have already applied a large number of the norms, including providing insight into costs, policy choices, risk management and board performance.However, pension funds hardly gave information on agreements with providers, remuneration policy or arrangements for whisteblowers, they said. The same went for the regular evaluation of actuary and accountant.Ecorys also found that the most annual reports were also not clear about the procedure for the appointment of trustees and members of the supervisory board, and lacked clarity about the role of the scheme’s board and other organs within the pension fund for appointments.In the opinion of the monitoring committee, most pension funds were inadequate in indicating the current diversity of representation, or how they intended to improve any imbalance.The researchers further noted that many pension funds failed to provide a clear definition of some standards, and also recommended including reports of, for example, their accountability organ and their compliance officer in their annual report.The code is meant to improve governance, and has legal been underpinned by legislation since 1 July 2014.The code has succeeded the principles for proper pension fund governance, which were formulated by the StAr in 2005.For more on pensions in the Netherlands, see the upcoming March issue of IPE Pension funds must provide more information about outsourcing and procedures for appointments in their annual report, the monitoring committee for the code for pension funds has indicated.In its first evaluation of the application of the code, which came into force in 2014 after a joint effort by the Pension Federation and the Labour Foundation (StAr), the committee also suggested that schemes should give more clarity on subjects such as the suitability of board members and diversity of representation.The committee has drawn its conclusions on the findings of research bureau Ecorys, which had checked 222 annual reports over 2013 for 34 of the 83 standards of the protocol.The committee’s zero measurement focused on whether and how pension funds are dealing with the themes, it said.last_img read more

ESMA opines on supervisory approach to Brexit-related relocations

first_imgUK-based financial market participants should not be allowed to create “letterbox” entities in European Union member states when relocating post-Brexit, according to the European Securities and Markets Authority (ESMA).The principle is one of nine that the European supervisory authority set out in a note to national supervisory authorities about the approach they should take to UK financial firms seeking to relocate parts of their operations.Steven Maijoor, ESMA chair, said: “The UK plays a prominent role in EU financial markets and the relocation of entities, activities, and functions to the EU27 creates a unique situation requiring a common effort, at EU level, to safeguard investor protection, the orderly functioning of financial markets and financial stability.“The EU27 have a shared interest in building a common approach to dealing with relocating firms that wish to continue to benefit from access to EU financial markets. Firms need to be subject to the same standards of authorisation and ongoing supervision across the EU27 in order to avoid competition on regulatory and supervisory practices between member states.” ESMA said relocating UK-based market participants might try to rely on outsourcing or delegating certain activities or functions back to UK-based entities, but warned that this must not be allowed to create supervisory arbitrage risks.Delegation and outsourcing to third countries should only be possible under strict conditions, according to ESMA.Another principle it set out is that national supervisory authorities should be able to verify the “objective reasons” for relocation.ESMA said it would establish a forum to help national regulators report on and discuss cases of relocating UK market participants. It also planned to develop more detailed guidance in relation to sectors such as asset management.In a workshop aimed at UK asset managers thinking about relocating to Germany, the German financial regulator BaFin will later this month set out its approach to some of the issues covered in ESMA’s opinion.The UK regulator, meanwhile, has written to some 20 UK asset managers about their plans in relation to Brexit.According to a report in the Financial Times, the Financial Conduct Authority (FCA) has set out 30 questions for managers. These include whether UK-based asset managers are planning to relocate staff or operations to the EU, or whether they have applied for new licences from foreign regulators.An FCA spokesperson told IPE: “It is important for us as supervisors to understand the plans that our regulated firms have regarding Brexit.“To help firms prepare for these conversations, we shared the details of the questions we would be asking. This was not a formal data request and was not asking firms to undertake any further work. These conversations are to help us understand what work firms are already doing to prepare for Brexit.”last_img read more

Unilever abandons restructure under pressure from shareholders

first_imgIn the days before the announcement, several major shareholders had voiced objections to the planned restructure.Legal & General Investment Management (LGIM), a major provider of passive index tracking funds, said it would vote against the resolution. Sacha Sadan, director of corporate governance at LGIM, said Unilever was understood to have looked at several alternatives before reaching its final decision, but LGIM did not believe it had made a compelling case for shareholders to support Dutch incorporation.As part of its engagement with Unilever, LGIM worked with the UK shareholder group Investor Forum to engage collectively with other investors, including some of the UK’s biggest pension funds. In a statement, Investor Forum executive director Andy Griffiths said: “Our purpose is to escalate investor concerns through collective engagement and we would like to thank the board of Unilever for its constructive response in recent weeks.“We have worked with over 20 institutions on this assignment and believe that it represents a powerful illustration of the effectiveness of collective engagement.”Mike Fox, head of sustainable investments at Royal London Asset Management (RLAM), which holds approximately £360m (€406m) worth of Unilever shares, also praised the board for having “listened to shareholder concerns and responded in a constructive way”.Prior to this morning’s announcement, Fox warned: “Many UK Unilever shareholders voting for the upcoming resolution are effectively voting for forced divestment of their holding… We think that Unilever is a high quality company, both in its own right and as a key constituent of a number of UK indices.”While the consumer goods company might be able to convince European shareholders that the move made sense in the long term, Fox said, it was hard for a UK investor to see an incentive to vote in favour.PIRC, a leading proxy voting adviser, had also recommended that investors oppose the move.Unilever’s UK share price this year, versus the FTSE 100 index#*#*Show Fullscreen*#*# Source: CapitalIQ In developing the initial proposal, it said the board had been “guided by the opportunity to unlock value for our shareholders by creating a stronger, simpler and more competitive Unilever that is better positioned for long-term success”.It had received widespread support from shareholders for the principle behind simplification, it said, but the proposal’s implications had not received enough support. Unilever chairman Marijn Dekkers said the board would consider its next steps and continue to engage with its shareholders.UK objectionscenter_img Unilever, the British-Dutch consumer goods giant, has scrapped a plan to “simplify” its corporate structure after pressure from investors who would have been forced sellers of UK-listed shares.The announcement came early this morning in the wake of objections over the last few days from UK institutional investors owning millions of pounds of Unilever stock, who said they would vote the proposal down.The company – the third biggest in the FTSE 100 index by market cap – had proposed to incorporate in the Netherlands under a new holding company, which would have involved delisting from the London Stock Exchange and listing the new entity in its place. The matter was due to be put to the vote at extraordinary general meetings (EGM) on 25 and 26 October in Rotterdam and London.Unilever said in a stock exchange announcement at 7am today that the board had decided to withdraw its proposal.last_img read more

​Former ATP chief Christian Hyldahl takes top BlackRock Nordic role

first_imgIn his job at BlackRock, which has around 40 staff in its Stockholm and Copenhagen offices, Hyldahl will partly be replacing Lena Lundholm-Micko, who stepped into a dual role of country head and head of BlackRock’s Nordic institutional business in July 2017.She will continue in her role as head of the Nordic institutional business, the firm said, adding that she would now focus on BlackRock’s largest clients in these markets.Rachel Lord, head of BlackRock’s EMEA business, said the company was delighted to welcome Hyldahl.“He is highly respected by clients and other stakeholders in the Nordic region and across Europe,” she said. “He brings deep industry knowledge and expertise, and a particular interest in sustainable investing, which is a key priority for our clients.”“We have an established client base and an attractive set of organic growth opportunities in the region over the next five years, and Christian’s appointment is an exciting moment for BlackRock’s clients and business,” Lord said.Before joining ATP in January 2017, Hyldahl held several senior management positions at Nordea, and was both CIO and chief executive of Nordea Asset Management.His career began in 1990 as a bond analyst at Unibank, a Danish bank that merged into Nordea in 2000. Christian Hyldahl, the former chief executive of ATP who left the Danish pensions giant late last year, has been announced as country head of the Nordic region at BlackRock.Hyldahl will join the €5.3trn asset manager on 21 October, more than 10 months after he resigned from ATP as the DKK881bn (€118bn) statutory pension fund came under pressure in a complex case amid a public furore over dividend tax speculation.Hyldahl said of his new appointment: “I have carefully considered my next step over the last 10 months and I am excited to join a firm with the global impact and outright industry leadership of BlackRock.“I look forward to joining the BlackRock team and engaging with the firm’s clients across the Nordic region.”last_img read more

New BNY Mellon solutions group to meet ‘second wave’ OCIO needs

first_imgBNY Mellon Investment Management has launched a new platform offering portfolio management and investment advisory services for investors worldwide seeking outsourced investment management, with inquiries from European institutions contributing to the decision behind the move.Historically BNY Mellon provided outsourced chief investment officer (OCIO) services – the North American equivalent to fiduciary management – via its banking entity, but its asset management and wealth management arms have now set up BNY Mellon Investor Solutions, an investment advisor registered with the Securities and Exchange Commission, to offer these services.In a statement, BNY Mellon Investment Management said the new group “combines an open-architecture approach with the proprietary investment capabilities of BNY Mellon’s eight specialist investment firms, alongside the full spectrum of advisory services from BNY Mellon Wealth Management, and the custodial and servicing capabilities from BNY Mellon Asset Servicing”.Todd Gibbons, chief executive officer of BNY Mellon, said: “BNY Mellon Investor Solutions brings together the full power of our collective enterprise to meet the ever-evolving needs of investors by providing an integrated investment offering — needs that have only been amplified in the current environment.” The $11bn (€9.85bn) Investor Solutions platform is being led by Jamie Lewin, former head of product strategy and performance management for BNY Mellon IM, with reporting to Catherine Keating, a member of BNY Mellon’s executive committee and CEO of BNY Mellon Wealth Management. Jamie Lewin, head of BNY Mellon Investor SolutionsLewin said trends in demographics, the outlook for lower interest rates to prevail for longer, growing capital market and macro uncertainty, and a constantly changing regulatory environment were making for a “complex world” that European institutions were looking for help to navigate just as North American organisations were.“They’re reacting to the same changing fundamentals,” he said. “What is true for the US is certainly, we think, as true for Europe and we’re seeing that with inbound inquiries from European institutions seeking us out for outsourced services.”To read the digital edition of IPE’s latest magazine click here.center_img Catherine Keating, CEO of BNY Mellon Wealth Management‘Second wave’Asked why BNY Mellon had launched the group at this particular time, Keating explained it was because it anticipated a “second wave” in the OCIO market.“We think the first wave really focussed on the outsourced part,” she told IPE. “It was organisations that decided, either because of their size or focus, that they didn’t have the ability or desire to manage some of the investments in-house so they outsourced.“Today we see a second wave starting and these are investors who’ve already decided they’re going to outsource or may already have outsourced, but now are focussed on the outlook – much lower for much longer – and are looking for a broader set of resources to address that,” she added.“They’re looking for economists, asset class specialists, fundamental and quantitative tools, and for technology and risk analytics that can guide them every day.”She said they were also looking for a firm ”that knows them so well it’s as if they’re sitting in their office with them”.Applicable in EuropeThe new group is targeting investors worldwide, including in the UK and the rest of Europe.last_img read more

​LD Pensions picks Acadian for first active quant mandate

first_img“In order to assess where the results come from, it has been important for us to choose a partner with transparent and understandable procedures”Kristoffer Birch, head of equities at LD Pensions“So in order to assess where the results come from, it has been important for us to choose a partner with transparent and understandable procedures,” he said.In February, LD Pensions said the mandate being tendered was for an initial amount of around DKK1bn (€134m), to be invested actively in both developed and emerging markets, adding that the product offered had to have at least €500m of available capacity at the time of signing the deal.LD Pensions has been unable to say in advance how much its mandates will be for because of the unpredictability of the eventual size of LD Feriemidler. That fund was first set to amount to around DKK100bn, though much was expected to be in the form of debt owed by employers rather than investible assets.In June, however, Danish politicians opted give workers early access to three of their five weeks of holiday allowances that had been due to be managed by LD Funds, in order to boost the COVID-hit domestic economy.This means LD Feriemidler is now to have total assets of around DKK40bn.Asked by IPE how much Acadian would now be managing, Birch said: “Any amount we are going to invest in the coming year is very uncertain due to the uncertainty around the holiday allowance fund.”LD Pensions would assess the funding after the summer, he said.Looking for IPE’s latest magazine? Read the digital edition here. Denmark’s LD Pensions has chosen US firm Acadian Asset Management from 10 firms competing to run the global active quantitative equities it put out to tender in February, citing the firm’s “transparent and comprehensible” process as a plus.But the already uncertain amount of pensions money the winning manager will have to invest has now become even less predictable, after a political decision last month more than halved the size of the holiday allowance fund LD Pensions manages.Kristoffer Birch, head of equities at the Frederiksberg-based pensions manager, said: “Acadian has developed a very interesting tool to predict stock returns, based on proprietary signals.”This differed from the method used by both LD Pensions’ smart beta managers and its more traditional active managers, so would be a “really exciting addition” to the equity portfolio. “On top of this, the fact that Acadian bases its processes on solid research made the choice even easier,” Birch said.The mandate Acadian has won is the first active quant contract for LD Pensions, and will be used to invest assets of both of the two pension funds LD Pensions runs.These are LD Dyrtidsmidler, a declining fund based on cost-of-living allowances granted to workers in 1980, and LD Feriemidler, the new fund consisting of vacation entitlements Danish employees are being granted as a result of a change in the law.In the original tender, the Danish firm said the quant investment product had to be provided as a segregated mandate, and be tailored LD Pensions’ needs by incorporating its exclusion list, tracking error as well as other restrictions.Announcing the mandate award, LD Pensions said that while traditional equity managers often ignored short-term stock movements to focus on the long-term growth potential of companies, Acadian tried to predict short-term movements.The US manager did this both by using high-frequency traditional data such as price per share relative to earnings, the Danish firm said, as well as more alternative methods including quantitative text analysis of company announcements.Birch said predicting stock returns was difficult, and quantitative stock selection with new techniques such as machine-learning could quickly become a black-box.last_img read more

​Denmark roundup: LD awards global equities mandate to GuardCap

first_imgDanish pension fund manager LD Funds has selected Canadian-owned London-based manager GuardCap to run a global equities mandate, it has announcedKristoffer Birch, LD Funds’ head of equities, said: “We have lacked a manager who can give us exposure to quality companies with high growth and high earnings, which both perform well in growth environments with low interest rates as we have now – and at the same time can protect the portfolio in crises.”GuardCap, which says it focuses solely on concentrated, bottom-up, strategies, was up against 33 other Danish and international asset managers in the EU procurement process, LD Funds said.Birch said it had also found GuardCap compelling because it had integrated ESG analysis and active ownership into its stock analysis and selection. The mandate award was the result of a tender launched in March, originally for an expected sum of DKK400m (€54m).Even at that stage, LD Funds did not know exactly how much its external managers would be required to invest on its behalf, because one of the two pension funds it runs – the holiday allowances fund  LD Feriemidler – depends on choices made by employers contributing the allowances.However, since March, LD Funds’ operating environment has changed significantly, with parliament having voted to disburse two thirds of the DKK100m of holiday allowances now rather than on retirement, in order to combat economic effects of the pandemic.LD Funds now manages DKK35bn in the mature fund, Lønmodtagernes Dyrtidsmidler, and DKK40bn in LD Feriemidler.The Frederiksberg-based pensions manager said it now had only one more equities mandate left to award in the series of tenders it has been conducting over the last year.Equities and alternatives weigh on PFA’s H1 returnDenmark’s biggest commercial pension provider PFA has said its overall return on investments for the first half of this year was dragged down by losses on equities and alternative investments, including real estate.The pension fund reported a 3.4% investment loss for its market-rate pension clients and a 0.8% loss for those with average-rate products, with total assets for the parent company rising to DKK599bn from DKK593bn at the end of 2019.Allan Polack, PFA’s group chief executive, said: “We have had a strong focus on limiting the negative return for customers, when the COVID-19 pandemic seriously shook the markets, and since then we have been part of the upturn, so the losses have largely been made up.”PFA reported a total investment loss in absolute terms for the period of DKK2.2bn, with listed foreign equities ending with a negative 7.7% return after currency hedging and Danish listed equities returning -0.9%.“The return on investment was primarily brought down by negative returns on shares and alternative investments, while there have been positive returns on interest-rate hedging,” the firm said in its report.Real estate and alternatives ended the period with negative returns of 1.2% and 5.7% respectively, it said.Polack said: “Having a negative return is never satisfactory. On the other hand, it has been an extreme situation and we must also be pleased that the financial markets recovered quickly.”At the holding company level, PFA reported a rise in total assets to DKK721bn at the end of June from DKK688bn at the end of 2019.PBU: 90% of members value responsible, sustainable investmentIn a new survey Denmark’s Pædagogernes Pension (PBU) says that in a new survey, 90% of its members said it was important for their pension fund to be invested responsibly and sustainably.The member-owned pension fund for education practitioners – mainly kindergarten staff – said the poll ranked child rights as the highest specific priority for members, with 33% putting the issue at the top of their list, followed by climate, with 16% of respondents giving that the highest priority.Sune Schackenfeldt, PBU’s chief executive, said the fund was actively working for a global transition to an economy less dependent on fossil fuels – which focused on renewable energy and green technology – while simultaneously trying to create the best possible return for scheme members.“It is therefore very positive that [members] share the social and climate ambitions we have,” he said.last_img read more

The suburbs where owner occupiers live

first_imgCore Logic has said 47 per cent of properties in Townsville are selling at a loss . Dean Dank, Principal at Explore Property TownsvilleRANGEWOOD has topped the list of Townsville suburbs with the most owner-occupiers.According to CoreLogic figures, only 5 per cent of households in the semi-rural suburb are renters. A total of 36.8 per cent own their home outright, 56.6 per cent are purchasers and the rest are classified as “other”.Explore Property Townsville principal Dean Dank said the suburb was popular with owner-occupiers because it was family-friendly and offered an idyllic lifestyle with larger blocks.He recently sold 55 Rangewood Drv in Rangewood to owner-occupiers, while the vendor had lived in the home for decades but had decided to downsize.The home was on the market for less than a month. Mr Dank said buyers were conscious of whether the area they were buying into had lots of renters.More from news01:21Buyer demand explodes in Townsville’s 2019 flood-affected suburbs12 Sep 202001:21‘Giant surge’ in new home sales lifts Townsville property market10 Sep 2020“People will ask if there is mainly renters or if it’s owner-occupiers, so we try to find that out as part of the listing,” he said.“I think Rangewood is so popular with owner-occupiers because of families that want space, whereas the new developments are building smaller and smaller blocks.“It is very family-orientated.”Mr Dank said a new wave of homeowners were starting to buy property in Rangewood.“There is a bit of a changing of the guard happening in Rangewood with people in their 60s and 70s downsizing,” he said.“You can also have a bore there and it’s not as far out of town as Rupertswood.”All the suburbs in the top five were semi-rural locations made popular due to the lifestyle they offered.last_img read more