Strathclyde slashes equities in shift to ‘enhanced yield’ strategies

first_imgLong-term enhanced yield allocations would increase by 2.5 percentage points, also to 15%, with credit up to 5% from 3%.Over the next three years, the fund is recommended to shave another 10 percentage points off equity, splitting this evenly between the short and long-term enhanced yield strategies – taking allocations to 20% each.The two remaining alternative strategies see further reductions in equity holdings following the same pattern.#*#*Show Fullscreen*#*# The Strathclyde Pension Fund may radically reduce its equity holdings for a more diversified portfolio with allocations to short and long-term “enhanced yield” strategies.The UK’s largest local government pension scheme (LGPS) at £14.9bn (€19bn) currently holds over 70% of its assets in equities, with Glasgow City Council’s pensions committee now considering a range of alternative strategies to improve downside risk, produce a more efficient strategy and improve confidence in reaching the funding target.Trustees to the scheme are considering four alternative strategies, all of which see a dramatic reduction in equities in favour of credit and a range of options including absolute return, high-yield and hedge funds.The first alternative strategy, which the fund could implement immediately, would see equities fall by ten percentage points to 62.5% with short-term enhanced yield allocations doubling to 15%. Source: Strathclyde Pension Fund / Glasgow City CouncilStrathclyde Pension Fund asset allocationAt the scheme’s meeting in March, the board concluded equity exposure needed to reduce to diversify strategy.“Implementation should begin at an early date and should be progressed as quickly as opportunities, market conditions and other practicalities allow,” Lynn Brown, the fund’s deputy chief executive and executive director of financial services, told the committee in documents prepared for a recent meeting.“Processes to facilitate implementation should be considered with a strategy for ongoing risk management thereafter should be developed,” she added.Both alternative strategies would see the fund dramatically increase exposures to hedge funds, absolute return strategies, real estate debt, direct lending, non-sterling and emerging market bonds, property, social housing, infrastructure debt and equity and farmland.If accepted, these asset classes could count for 40% of the fund by 2018.The board also threw support behind Strathclyde’s £100m New Opportunities Portfolio (NOP) suggesting cap restrictions should be raised.The NOP is Strathcylde’s portfolio focusing small amounts in infrastructure, finance and alternatives.In December the fund added commitments to social infrastructure, credit for property developers and renewable energy.The board said it was too early to judge investment performance but the NOP was a success for governance and diversification – suggesting the implementation model used could be mirrored in Strathclyde’s new asset allocation shift.“The NOP itself could either continue to expand as a separate strand of investment strategy or simply be allocated across the new asset categories,” the fund said.It was also recommended the 3% allocation cap be lifted to 5% to allow headroom, given it has investment commitments of £300m, with £150m spare capacity.The fund achieved an 8.8% investment return over 2014, above its 8% benchmark.last_img read more

Blatter ‘available to defend FIFA’ at US corruption trial

first_imgHe explained: “There was a contract between the FIFA president and Platini, an oral contract and then indeed a written one.“And so I paid the debt, generally when you pay a debt you are thanked. But in this case because I paid the debt I’m punished.“According to the principles instilled in me by my father who for me was a paragon of virtue, ‘ we, Blatters, pay our debts’.“And that’s also the principle that we adhere to at FIFA.”He made clear that should CAS reject his appeal, he will not give up trying to clear his name.“There are other ways to get the ban lifted,” he suggested, saying he could take his case to Swiss justice, or take out a civil action.“But for me I’m confident CAS will overturn the decision,” he stated.Irrespective of the outcome of his CAS hearing, Blatter plans to attend the 2018 World Cup finals in Russia as a guest of Russian President Vladimir Putin, although if he were to attend a match he would be flouting the terms of his suspension.“I’ve got an invitation to go to Russia,” he said.“I will go Russia. Going to Russia doesn’t mean that I’m going to watch games. They can’t stop me travelling. I go where I want to.”He refused to pass comment on his successor Infantino’s performance since taking over the top job in football in February.“I don’t have a verdict. I don’t even know his programme and I’m letting him get on with it.”Share on: WhatsApp Basel, Switzerland | AFPFormer FIFA president Sepp Blatter told AFP Friday he “is available” to appear as a witness at a United States trial into mass corruption in world football.“Yes. When they need me to defend FIFA, I will be available,” Blatter said, when asked if he would be prepared to attend the trial into the sweeping bribery scandal that has sparked an unprecedented crisis at the top of the game.US prosecutors were hoping the hearing of 39 officials and marketing executives accused of soliciting and receiving tens of millions of dollars in bribes and kickbacks would begin in February 2017.But on Thursday, the US judge overseeing the corruption scandal postponed setting a trial date until after prosecutors share the bulk of evidence being collated in the massive investigation.Blatter, with suspended European football chief Michel Platini, was banned from all football activities for eight years in December over an infamous two million Swiss franc ($2 million, 1.8 million euro) payment Platini received in 2011 from the then-FIFA president.The suspensions were cut to six years in February.Blatter, since replaced as FIFA president by Gianni Infantino, is awaiting a date for an appeal against his ban to the Court of Arbitration for Sport (CAS).Platini was told earlier Friday his CAS appeal will be heard on April 29.Blatter, attending a debate on FIFA reforms at Basel University, commented: “It’s good news that CAS has made progress with Platini’s case. I think my case will be handled shortly after.”The 80-year-old Swiss added: “I believe that now, finally, at CAS, they are going to talk about justice, and not just speculation.“That means it’s justice that will prove if the accused is guilty and not the accused who has to prove his innocence.”He says his appeal is based on the principle that “the Blatters pay their debts”.last_img read more