Category: Funds

One in Seven will Retire with No Pension

One in Seven will Retire with No Pension

One in seven (14 per cent) of those planning to retire this year has made no personal pension provision and will be either totally or heavily dependent on the State Pension, according to research by Prudential1.

The insurer’s seventh annual ‘Class of’ study, tracking the future plans and aspirations of people who plan to retire this year, shows that in the Class of 2014 women are nearly three times more likely to rely on the State Pension than men – 20 per cent of women say they have no pension savings compared with seven per cent of men.

The reality of many people’s reliance on the State Pension is underlined by the research, which shows that nearly one in five (18 per cent) of those planning to retire this year will have an income below the Minimum Income Standard as defined by the Joseph Rowntree Foundation (JRF)2. JRF estimates that a single pensioner needs an income of at least £8,600 a year to reach a minimum socially acceptable standard of living; a retired couple needs an annual income of more than £12,500.

Vince Smith-Hughes, retirement income expert at Prudential, said: “The changes to pensions and how people can take their retirement income announced in the Budget last month will provide savers and retirees with more choices. However they don’t alter the fundamental fact that many people are not saving enough for a comfortable retirement.”

The Prudential research also highlights the importance of the State Pension to people planning to retire this year. On average it makes up 35 per cent of an individual’s total expected retirement income, which is the same proportion on average that is expected to come from company pension schemes.

Women are more reliant on the State Pension than men – on average the State Pension makes up 42 per cent of women’s expected retirement incomes compared with 28 per cent for men. Also, Women have less company pension scheme income than men – it makes up 27 per cent of women’s expected retirement incomes compared with 42 per cent for men.

Despite the widespread reliance on the State Pension, there is confusion among those planning to retire this year about how much the State Pension is worth for an individual. Nearly two in five (39 per cent) either have no idea what the State Pension is worth or think it is worth more than the £113.10 a week payable from April 2014. Around one in six (17 per cent) overestimate the value of the State Pension by at least £880 a year.

Vince Smith-Hughes added: “It is also important to avoid falling into the trap of overestimating the contribution that the State will make to your retirement income, as the State Pension alone is barely sufficient.

“The introduction of auto-enrolment into workplace pension schemes is helping to encourage saving, and along with plans for a flat rate State Pension from 2016, small steps are being taken to improve retirees’ prospects. However, simply saving as much as possible as early as possible in your working life and seeking professional financial advice in the run up to retirement will help to make the most of your savings when you’re ready to stop working.”

Across the country people expecting to retire this year in the North East and South West are the most likely to rely on the State Pension (20 per cent with no other pension). In contrast, those in the North West will be the least reliant, with just eight per cent entering retirement without any private pension savings.

TOM Offers Best Execution in ETFs

TOM Offers Best Execution in ETFs

As of today, TOM (The Order Machine) offers best execution in Exchange Traded Funds (ETFs) with the product scope now consisting of equities, options and ETFs.

This is a unique approach in Europe and clients can benefit from using a single TOM connection to trade a wide range of products while receiving best execution in all those financial instruments according to MiFID requirements.

Willem Meijer, CEO of TOM said: “We are continuously looking for possibilities to expand our product offering and are therefore very pleased to add ETFs to our range of tradable instruments. We plan to expand the number of ETFs tradable via TOM in the near future as the market has seen significant growth in this asset class.”

Martijn Rozemuller, Managing Director of Think ETFs added: “As the first Dutch issuer of ETFs we feel that this is a very positive development for the investor. ETFs are playing an increasingly important role in the market for investment products in the Netherlands, mainly due to the overall low costs of the product. The best execution mechanism of TOM has the ability to reduce the already low costs of trading even more.” 
TOM is a trading venue in that offers equity and options trading and aims at optimal competition between markets. To be able to guarantee best execution of client orders, TOM developed a search engine (‘TOM Smart Execution’), which quickly compares prices between markets. The client’s order is executed at the trading venue showing the best available price at that moment. TOM has established a substantial market position in equity and options trading and boasts shareholders including ABN AMRO Bank, BinckBank, IMC, Nasdaq OMX and Optiver.

Housing Crisis to Spread
FundsReal Estate

Housing Crisis to Spread

By 2018 the South of England will face a combined shortfall of at least 160,000 homes a new report from international real estate adviser, Savills has claimed. The report identifies that local planning authorities are simply not planning enough new homes to meet the growing housing need.

In a new report, Planning: Countdown to the Election, the Savills planning team has examined locally planned targets across the South East, South West and East of England. Their analysis found that these regions will be short of 91,323 homes when targest are compared to need. Furthermore, this number does not take into account the additional demand that will continue to spill out from London.

The difference between house prices in London and the South East is now higher than it has ever been and this is expected to translate into increased demand overflowing into the Home Counties and to locations as far afield as Cambridge, Brighton, Reading and Oxford.

Savills has identified key migratory hotspots around London and concludes that the majority are already facing their own local housing shortfalls. The firm is calling for local planning authorities to form an ‘arc of cooperation’ around London, working towards solutions that look beyond individual local authority boundaries to maximise housing delivery.

“Local planning authorities need to act with urgency and in cooperation with neighbouring authorities to plan for the scale of housing delivery now needed right across the South of England,” says Savills Planning Director, David Jackson. “Currently planned targets fall well below the projected need, without accounting for the issues of years of undersupply at a local level. Add to this the projected flows of demand from London and there is a real crisis looming.”

England currently needs 240,000 new homes a year according to Town and Country Planning Association estimates. Translating this national figure down to the local level, Savills has identified particular hotspots where planned levels of housing are well below levels of need: the annual shortfall peaks in Brighton & Hove at over 700 homes, followed by Luton at over 500, Epping Forest around 400 and Elmbridge at over 350 each year. Authorities within the more affordable, lower demand areas to the east of London (Thurrock, Dartford, Gravesham) are amongst the few planning to deliver relatively high levels of new homes. Conversely, in Surrey, Berkshire and Buckinghamshire, where there is higher demand from Londoners, housing targets are well below the rate required. (See full table attached.)

“We need to plan larger scale developments as a matter of urgency to meet local need and anticipated London overspill,” says Savills Planning Director, Jonathan Steele. “Without this we face a growing housing shortfall, with affordability an inevitable consequence.

“The Chancellor’s recent commitment to a new ‘garden city’ in Ebbsfleet, with an initial 15,000 new homes is welcome, but it is a drop in the ocean – the equivalent of just four months’ requirement for housing in London. New towns or Garden cities alone are not therefore a panacea. A long term commitment is required by government and other agencies to unblock infrastructure and other constraints to ensure that rates of housebuilding achieve a sustained and substantial increase.”

Deal Values Rise in Euro Buy & Build

Deal Values Rise in Euro Buy & Build


Silverfleet Capital, in conjunction with mergermarket, today publishes the findings of its European Buy & Build Monitor for H2 2013. The Buy & Build Monitor tracks add-on activity undertaken by European companies backed by private equity.

129 add-ons were reported in H2 2013 compared to a H1 number of 141, which has been revised upwards from 124. Further data for smaller Buy & Build transactions usually emerges well after the publication of this report. Therefore, based on our experience, the number of deals in H2 2013 is very likely to be revised upwards in our next report possibly at the expense of the average reported deal size. However, we conclude that activity levels will ultimately have been at least level if not slightly up in the second half of 2013.

The average disclosed value of add-ons in the final quarter, based on the 15 deals with disclosed values reported in that period, was markedly higher, increasing by 56% to £84m from £54m for the first three quarters of 2013. The annual average values for add-ons in 2013 and 2012 are £62m and £46m respectively.

The largest of the deals in the half year was PAI-backed Swissport’s €450m purchase of Servisair UK, announced in August 2013. However the increase in average deal values in Q4 2013 is explained by three noteworthy transactions in the final quarter of 2013: The CAD 650m purchase of Maxxam Analytics by Bureau Veritas, Guardian Financial’s €350m acquisition of Ark Life, and Aenova’s acquisition of Haupt Pharma for €260m. Bureau Veritas, Guardian Financial and Aenova are backed respectively by: Wendel, Cinven and BC Partners.

Commenting on the findings, Neil MacDougall, managing partner of Silverfleet Capital said: “During the final quarter of 2013 there was a very noticeable increase in transaction size, with the average deal size at £84m being the highest since Q1 2011. However, the indications are that the overall number of add-ons will have remained broadly flat compared to the first half of 2013.

Looking in more detail at how two of the larger transactions were financed, Swissport issued a $390m senior secured add-on note while Aenova raised a €130m additional term loan. Together these deals demonstrate the keen appetite of both the European high yield and senior debt markets to support large add-ons by private equity-backed companies.”

Mutual Fund Industry Awards Winners Announced

Mutual Fund Industry Awards Winners Announced


Fund Industry Intelligence and Fund Director Intelligence, Institutional Investor’s exclusive publications for the mutual fund industry, have announced the winners of the 21st Annual Mutual Fund Industry Awards at a gala ceremony at New York’s Mandarin Oriental.

Around 500 mutual fund marketers, analysts and executives, as well as mutual fund company lawyers and independent trustees, attended the event.

The winners were announced after a six-month nomination and selection process conducted by the FII and FDI editorial teams. The picks were based on a combination of editorial research and mutual fund industry feedback. Follow the links below for winner profiles.

Fund Industry Intelligence’s winners:

Lifetime Achievement Award: Don Phillips, former head of global research, Morningstar
Fund Leader of the Year: George Aylward, president and CEO, Virtus Investment Partners
Fund Marketer of the Year: Shawn Alexander, head of Americas fund marketing, JPMorgan Funds
Ad Campaign of the Year: ING U.S. “Orange Money”
Deal of the Year: RidgeWorth Capital’s Management-Led Buyout
Sales Success of the Year: WisdomTree’s Japan Hedged Equity ETF
Retirement Leader of the Year: JPMorgan Asset Management

Fund Director Intelligence’s winners:

Lifetime Achievement Award: Joel Goldberg, of counsel, Stroock & Stroock & Lavan
Trustee of the Year: James Oates, independent chairman, John Hancock Funds
Small Board Trustee of the Year: John Brown, independent chairman, Blackstone Alternative Investment Funds
Independent Counsel of the Year: Brian McCabe and Gregory Sheehan, partners, Ropes & Gray

Read more about the awards and winners at

CIBC Mellon Earns $1.1bn Mandate Expansion

CIBC Mellon Earns $1.1bn Mandate Expansion

CIBC Mellon has announced that Horizons ETFs Management has selected CIBC Mellon to provide fund administration, custody and exchange-traded fund (ETF) services for the Horizons family of 38 leverage and inverse ETFs.

This CAD$1.1bn mandate expands on the asset servicing solutions CIBC Mellon already provides for the Horizons ETFs family of actively-managed ETFs. With the addition of these 38 ETFs, CIBC Mellon now services all of Horizons’ Canadian ETF business.

“We’ve been very happy with the service provided by CIBC Mellon on our actively managed ETF business. Both the technology used by their platform and the client service they offer have been terrific,” said Kevin Beatson, Chief Operating Officer of Horizons ETFs. “We’re quite happy to transition the rest of our ETF business to their custody and fund administration platforms, and feel our unit holders will be well served by this partnership.”

“We are committed to great service, strong support and continuous improvement here at CIBC Mellon, and we have enjoyed a very strong working relationship with Horizons – we are very pleased they have again selected us to service their family of funds. We look forward to delivering strong solutions for Horizons ETFs as they continue to expand their business and serve their investors,” said Ronald C. Landry, Executive Director, ETFs & Investment Funds, CIBC Mellon.

Horizons Exchange Traded Funds Inc. is an innovator in both actively-managed ETFs and inverse and leveraged ETFs. They are currently the largest provider of both actively managed ETFs and leveraged ETFs in Canada.

CIBC Mellon is a leading provider of ETF-servicing solutions in Canada, currently serving the majority of ETF sponsors operating in the Canadian market. Leveraging the award-winning capabilities of BNY Mellon, a global leader in investment servicing, CIBC Mellon’s ETF solution includes indicative net-asset-value (NAV) production, automated basket creation and redemption features, and a designated broker interface offering flexible, end-to-end automation of the order process. This solution delivers support and flexibility, meeting the operational needs of a spectrum of ETF industry participants.

Multi-manager Yousefian Joins Charteris
FundsReal Estate

Multi-manager Yousefian Joins Charteris

Charteris Treasury Portfolio Managers Limited is pleased to announce the appointment of the highly experienced multi-manager, Tony Yousefian.

Yousefian joins the firm from City Financial, where he managed the EFA OPM Fixed Interest Fund and the EFA OPM Property Portfolio Fund. Formerly Chief Investment Officer of OPM Fund Management, Yousefian joined City Financial in April last year following the acquisition of OPM Fund Management Ltd by City Financial.

Yousefian will continue to manage the £9.5 million EFA OPM Property Portfolio Fund in his new role at Charteris. The Fund, which has delivered a return of 6.1% over the year to 28 February, against a sector average of 2.37%, will continue to be managed according to the same investment mandate and objectives. Way Fund Managers will continue to act as the Fund’s Authorised Corporate Director.

Commenting on the appointment, Charteris Chief Executive Officer and Fund Manager, Ian Williams, said: “We are absolutely delighted that Tony has decided to join us at this exciting stage in the firm’s evolution, and that the EFA OPM Property Portfolio Fund will be coming to Charteris with him to take its place alongside our existing fund range. Tony brings more than 25 years of fund management experience to his new role at Charteris, and we look forward to Tony playing a fully active role in our efforts to build the Charteris fund range, and to broaden our wider investment proposition.”

Tony Yousefian is equally delighted with his new role. He said: “With 35 years’ experience in the Equity and Fixed Income markets, Ian is one of the most experienced and most talented managers working in the fund management field today. I am thrilled to be joining Ian and the team at this time. I would like to wish all my former colleagues at City Financial the very best for the future, and am looking forward to the challenge ahead.”

Andrew Williams, Chief Executive Officer at City Financial said: “We’d like to thank Tony for his contribution and wish him well for the future.”

Budget’s Pension Changes “Style Over Substance”

Budget’s Pension Changes “Style Over Substance”


The 2014 budget’s pension changes have been slammed as “style over substance” by the chief executive of one of the world’s largest independent financial advisory organisations, who also says it will “fuel pension transfers.”

The comments from Nigel Green, founder and CEO of deVere Group, follow Steve Webb, the pensions minister, yesterday hailing the pension changes announced in last week’s budget as “a big step forward.”

Mr Green observes: “It was a budget in which there were several headline-grabbing pension policies annoucned, but scratch the surface and it was more style over substance.

“For instance, the scrapping of restrictions on pensions access will be a policy that will have little real appeal to the vast majority of people. This is because accessing a pension will be taxed at the individual’s highest marginal rate of income tax – which for anyone with total UK income (including salary, rental and investment income) over £31,866 will be 40 per cent and 45 per cent on all earnings over £150,000.

“Anyone who has worked hard and saved hard all their life for their retirement will be, rightly, loathed to drawdown their pension and handover almost half of their nest egg to the Treasury, simply for the privilege of having earlier access to their own funds. The average pension transfer we encounter is £320,000, which will lead to considerable tax charges if accessed all at once.”

Regarding the Chancellor’s much lauded budget pledge that “no one will have to buy an annuity,” Mr Green notes: “The requirement to purchase an annuity was actually removed in the 2011 budget and people could opt to take income drawdown instead. However, despite this change the number of people taking annuities remained relatively unchanged.

“Whilst I support the Chancellor releasing individuals from buying annuities because it encourages people to save, knowing that they can access the full capital rather than purchase an annuity, I suspect that most people will continue to buy annuities, perhaps not realising that there are better ways to create an income in retirement.”

Despite insisting that these two highly-publicised changes to pension policy will do little to alter most people’s long-term financial strategies, there is one area of pension planning which is set to be impacted from the Chancellor’s statement, according to the deVere Group CEO.

Mr Green explains: “To my mind, the primary change for our industry is that civil service pensions will not be able to be transferred outside of the UK unless there are ‘exceptional circumstances’.

“The government’s reasoning behind stopping civil service schemes transferring is that they are massively underfunded and they will be left with the debts.

“Now that it has been admitted that their schemes are underfunded, an increasing number of civil servants will want to review their pensions options and take advantage of any alternative arrangements, such as QROPS (Qualifying Recognised Overseas Pension Scheme), that may currently be available to them, before the government disempowers them to do so.

“It should also be stated that the government is also actively reviewing the possibility of prohibiting the transfer of all defined benefit schemes.”

He adds: “We have found that QROPS enquiries have increased since the government’s proposals were announced and this upsurge, it can be reasonably assumed, is being driven by those who might shortly not be able to take advantage of the many associated benefits of QROPS. Such benefits include a greater freedom over pension investments, a choice of major currencies, and often far more efficient tax treatment of the pension – both when income is accessed and on the individual’s death.”

Mr Green concludes: “In short, Chancellor George Osborne’s 2014 budget was, perhaps unsurprisingly, an electioneering budget that promises a lot and that will impact little on pension planning, except for fuelling demand for overseas pension transfers.”

European Leveraged Loans Regaining Ground

European Leveraged Loans Regaining Ground

The European leveraged finance market is set to undergo a shift this year, as private equity sponsors veer back towards loans to finance leveraged buyouts, says S&P Capital IQ Leveraged Commentary and Data (LCD), a provider of real-time coverage of the leveraged finance markets.

European high-yield bond issuance has surged in recent years as sponsors have tapped into the liquid, cheap, and covenant-lite financing offered by bonds, to refinance loans and to support mergers and acquisitions (M&A).

However, there are early signs that the popularity of financing M&A via high-yield bonds is waning, while loans are regaining ground.

In 2013, 59% of M&A financings (mainly leveraged buyouts) tracked by S&P Capital IQ LCD across the European loan and bonds markets were financed by term loans and a revolving credit facility (RCF) – the lowest share in four years – while 14% were financed by high-yield bonds and an RCF, the highest share in four years. In contrast, in 2014 year-to-date 77% of all M&A deals have been financed by loans only and bond-plus-RCF financing has not yet been used.

Supporting this trend is the growing acceptance of covenant-lite loans in Europe, as investors become accustomed to seeing deals structured in this way. Covenant-lite loans (i.e. loans with no maintenance covenants) have begun appearing in Europe via cross-border transactions syndicated in Europe and the U.S. In 2014 year-to-date*, approximately €2bn of covenant-lite loans have been sold in Europe. This compares to 8bn in 2013 (full year), €1.4bn in 2012, and €7.7bn in 2007.

According to S&P Capital IQ LCD, since the financial crisis, no covenant-lite loans have been sold purely into the European market, but investors’ hunger for assets is encouraging them to take a more tolerant stance towards this type of loan. On this basis, leveraged companies with strong credit profiles could tap the domestic market without maintenance covenants during the course of the year.

“Sponsors have traditionally preferred loans over bonds, because they can be repaid more easily,” commented Ruth McGavin, Associate at S&P Capital IQ LCD. “This natural preference is re-emerging, and will be aided by investors’ willingness to buy covenant-lite loans in Europe.”

Chelverton Asset Managemnent Appoints Richard Bucknell

Chelverton Asset Managemnent Appoints Richard Bucknell

Chelverton Asset Management has confirmed that it has appointed Richard Bucknell as Investment Director in its unquoted equities team, which is responsible for sourcing and executing quality investment opportunities in private UK companies for a range of High Net Worth (‘HNW’) investors and private investment offices.

Bucknell, a highly experienced private equity investor, has been working with CAM as a consultant since September last year, and will report to CAM’s Managing Director, David Horner in his new role.

Prior to CAM, Bucknell led more than 20 new investments in small and medium-sized enterprises, and has previously held senior investment management positions with Barclays Ventures, ISIS Equity Partners and Catapult Venture Managers.

Bucknell joins CAM at an exciting moment in its evolution. The Company launched the Chelverton Investor Club, an exclusive private members club for HNW individuals, only last year. Since launching the Club, CAM has seen a significant uplift in unquoted investment activity. Bucknell will lead transactions of equity investment of between £500,000 and £3m on behalf of Investor Club members, and will also help to identify and transact larger equity investments on behalf of those amongst CAM’s unquoted equity clients requiring bespoke investment solutions.

Commenting on his appointment, Bucknell said: “It’s a really exciting time to be joining Chelverton, with the equity gap under-served by the more established private equity community. It’s also an area of the market where investors recognise that good returns can be delivered, with business valuations at sensible levels and company growth prospects looking better than for some years. HNW individuals can access these opportunities through the Investor Club, and we’re seeing strong levels of new investor interest.”

Bucknell boasts a highly developed network of Corporate Finance contacts, in the Midlands and the South West in particular, and as part of the Company’s unquoted equity team, will be based in the Bath office.