UK government to force £85bn shift to passive in LGPS funds

first_imgThe UK government has launched a consultation on the creation of two collective investment vehicles (CIVs) for the 89 local government pension schemes (LGPS) in England and Wales.The consultation was created following a call for evidence on the future of the LGPS, and independent analysis by Hymans Robertson, a consultancy that dominates advisory services to the LGPS.It proposed the creation of two CIVs for the funds, one to manage entirely passive investments in equities and bonds and one to actively manage alternatives such as private equity, infrastructure and property.The government decision to move towards CIVs comes after speculation it would propose one of three options, including the merging of local funds, or creating geographical CIVs. In a bold move, the government has proposed that funds shift all active listed equities and bonds into passive arrangements, via a new CIV.According to the Centre for Policy Studies, a right-leaning think tank, the funds jointly have around £85bn (€103bn) in active listed assets.The government cited analysis from Hymans Robertson that claimed funds would not have seen lower returns had assets been managed passively over the previous 10 years.The consultancy said the 89 funds would also pay £230m less in management fees in a passive-only CIV.Without taking into account any impact on returns, it also claimed asset turnover fees, for the buying and selling of assets, would have been £190m lower in 2012-13 under passive arrangements.Several funds, however, have defended their employment of active managers, arguing that it has provided outperformance of the market by 5.7% over the last three years.The government is to consult on how it will dictate to funds. It will consider forcing them to shift all active listed mandates to passive, forcing a percentage allocation, implementing a ‘comply or explain’ mechanism, or the status quo.Regarding the alternative asset CIV, the government said its creation would still allow asset allocation to remain at fund level, a critical point against mergers highlighted by respondents to its prior consultation.Hymans Robertson’s analysis showed the LGPS funds could save as much as £240m a year, within 10 years, by aggregating mandates.Schemes currently allocate roughly 10% of assets to alternatives, where it accounts for 40% of fees.The government criticised the heavy use of funds of funds – an expensive yet common way LGPS funds currently access alternatives such as private equity.It also said a CIV based on active alternatives management would allow the funds to further access infrastructure projects by pooling risk.Brandon Lewis, the Conservative minister responsible for the LGPS, said the move would reduce the unsustainable cost of public sector pensions.“The proposals I am setting out today will help reduce investment costs by £660m a year,” he said.Linda Selman, head of LGPS investments at Hymans Robertson, said CIVs might allow the funds to further reduce fees, and reduce the use of active management and funds of funds.“Active management still has an important role to play in accessing market opportunities but should be deployed selectively, when it adds value,” she said.“Ultimately, the balance between passive and active should depend upon the fund’s governance budget, investment beliefs and objectives, and the expected net of fee returns.”Gavin Bullock, pensions partner at Deloitte, warned of the potential impact on the UK asset management industry.“Both the move to pooling vehicles and the potential shift to passive will have a major impact on the UK asset management industry, given the £178bn assets currently under management by the LGPS,” he said.,WebsitesWe are not responsible for the content of external sitesLink to consultation on collaboration, cost savings and efficiencies among LGPSlast_img read more

Women of Troy split wild weekend series

first_imgAfter a strong non-conference showing, the No. 20 USC women’s soccer team kicked off Pac-10 play this weekend against No. 1 Stanford and No. 21 California.On fire · Freshman midfielder Elizabeth Eddy scored a hat trick Sunday against Cal to help lift the Trojans to a 5-4 overtime victory. – Dario Griffin | Daily Trojan Despite a tough loss to Stanford Friday at the Coliseum, the Women of Troy (8-3-2) came back strong Sunday afternoon and responded with a 5-4 sudden-death overtime victory against No. 21 California   (6-3-4). The Women of Troy won the game five minutes into overtime after they received a free kick. Redshirt junior midfielder Ashli Sandoval did the rest as she placed the ball in the top right corner of the goal, putting an end to a wild game that gave the Women of Troy a hard-fought victory.“We should have had them in the beginning, but it turned out to be an entertaining game,” Sandoval said. “[I] had to stay calm and focus on that one shot and just put it in.”USC almost didn’t make it to overtime, as Cal forward Alex Morgan completed her hat trick with just two minutes left in regulation to give the Golden Bears a 4-3 lead.The Women of Troy refused to quit and responded 14 seconds later, when freshman midfielder Elizabeth Eddy completed a hat trick of her own to tie the game 4-4 and send it to overtime.“Our team showed a lot of character to pull out the win,” Eddy said. “We worked hard to get back each goal and we got it done.”The Women of Troy gained an early lead, scoring two goals within the first 3:30 of the game.Senior forward Megan Ohai added to her already-impressive résumé at USC with a shot that found its way inside the top left corner of the post. A few minutes later, Eddy scored her first goal of the day, giving the Women of Troy a 2-0 lead.Despite holding a early two-goal advantage, USC allowed the Golden Bears to get back into the game — and momentarily take the lead — in the second half.In the 65th minute, Cal forward/midfielder Lauren Battung scored her fourth goal of the season to cut the lead in half, 2-1.“A 2-0 lead is the most dangerous score in the game,” USC coach Ali Khosroshahin said. “We knew if they got one, we knew it would be a dogfight.”And the game turned out to be exactly that as the Women of Troy and Golden Bears engaged in a seesaw battle the rest of the way.The Women of Troy responded in the 75th minute when Cal goalkeeper Emily Kruger vacated the net after a defensive breakdown and Eddy poked the ball to the far right post to give the Women of Troy a 3-1 lead.But in a game where the temperature reached more than 90 degrees, forcing two USC defenders, freshman Mia Bruno and junior Claire Schloemer, out of the game, Khosroshahin had to juggle the lineup.“When you change your backline, problems can occur because of the continuity you have,” Khosroshahin said. “We don’t really change a whole lot back there, but we had to change it a lot.”With some of the Trojans’ key defenders missing, the Golden Bears took advantage, cutting the lead to a single goal again when Morgan headed in a ball off a free kick to make it 3-2.Before the win Sunday afternoon, USC played host to the top-ranked Cardinal on Friday night at the Los Angeles Coliseum. USC fell short, losing 2-1 to Stanford (10-0-2) in front of an announced crowd of 1,429.“You got to give our ladies credit,” Khosroshahin said. “They kept fighting and kept battling. I thought we had more chances than [Stanford] did, but they just capitalized on the opportunities they had.”In the first half, the Women of Troy had numerous opportunities to strike, most notably when Eddy was able to break free from her defender, creating havoc for the Stanford backline.There was a scramble in front of the Stanford net, and the Women of Troy had three shots on goal but were denied by the Cardinal’s defense and goalkeeper Emily Oliver.In the second half, it wasn’t long before the Cardinal would break the tie — in the 59th minute, forward Christen Press knocked a shot from outside the box into the top left corner of the goal post, giving her team a 1-0 advantage.“We lost a little bit of momentum after we had a couple of great chances,” Khosroshahin said. “That’s a quality team that capitalizes on the opportunities they have.”The Cardinal would add an insurance goal in the 65th minute when Stanford midfielder Teresa Noyola managed to get her shot just past USC freshman goalkeeper Shelby Church, giving the Cardinal a 2-0 lead.“We just gave them too much time on the ball,” senior defender Karter Haug said. “They’re really good players, and if we give them that much time, they’re going to find the goal.”Though the Women of Troy were trailing, they refused to give up. In the 84th minute, Bruno scored her second goal of the year, cutting the lead in half.However, it would be too late for a comeback as Stanford held on to win, 2-1.Khosroshahin said his players showed a lot of heart, refusing to give up when their backs were against the wall.“We have a [great] team,” Khosroshahin said. “They just got to believe it. The ladies just showed unbelievable character.”last_img read more