Wednesday 1st April 2015
NEWS TICKER: TUESDAY MARCH 31st 2015 : Following a recent Morningstar Analyst Ratings Meeting, Morningstar has downgraded the Artemis UK Smaller Companies fund to a Morningstar Analyst Rating™ of Silver. The fund previously held a Gold rating. Morningstar continues to believe the experienced manager and robust process make this a strong choice for UK small-cap exposure, but Morningstar feels a Silver rating provides a better reflection of the fund’s relative merits within the sector. Indeed, given the manager’s focus on high-quality companies with resilient business models, Morningstar would have expected the fund to protect investors’ capital in 2014 to a greater extent than it did; an outcome which has slightly dented Morningstar’s conviction in the manager’s application of his process - President of the European Council Donald Tusk’s meeting with Prime Minister of Spain Mariano Rajoy today covered many points, but concern over a lack of government in Libya and the causes and consequences of instability and insecurity in the Southern Neighbourhood took up much of the discussion. “The Prime Minister and I had a very open discussion on both the causes and consequences of instability and insecurity in the Southern Neighbourhood. We had a good exchange on what the European Union is already doing - in terms of assistance, counter-terrorism and migration - and how we can better target our efforts to make a real difference,” notes Tusk in a briefing note issued today - Data published today by the Association of Investment Companies (AIC) using Matrix Financial Clarity suggests that investment company total purchases on platforms by advisers and wealth managers were 19% higher least year (with purchases worth £452.7m) and more than double the figure in 2012. In Q4 2014, platform purchases of investment companies were at £110.3m, 10% higher than purchases of £100.3m in Q4 2013 and 90% higher than purchases of £58.1m in Q4 2012. Investment company purchases at £110.3m in Q4 2014 were stable when compared to £110.6m in Q3 2014. Whilst 2014 was a strong year for purchases there was also a significant increase in sales, which rose 40% to £290.9m compared to £208.4m in 2013, suggesting some advisers and wealth managers are taking profits and rebalancing portfolios. Ian Sayers, Chief Executive, AIC, said: “Though sales have increased, we should remember that this trading activity all helps to improve liquidity. The AIC has trained over 3,000 advisers in response to RDR, and has recently increased its resource in this area, with the recruitment of Nick Britton, the AIC’s Head of Training. This will help us to increase awareness and understanding of investment companies with a refreshed training programme and the capability to meet and support more advisers.” The Global and UK Equity Income sectors were the most popular for advisers and wealth managers in 2014 overall, accounting for 18% and 13% of purchases respectively. The Infrastructure and Property Direct – UK were the third and fourth most popular sectors over 2014, accounting for 8% and 7% of purchases respectively. Transact and Ascentric continue to be the top platforms for investment company purchases, accounting for 49% and 20% of the market respectively in 2014. Alliance Trust Savings are increasing in popularity with financial advisers, their market share increasing to 18% in 2014 from 12% in 2013 - The Straits Times Index (STI) ended -7.25 points lower or -0.21% to 3447.01, taking the year-to-date performance to +2.43%. The FTSE ST Mid Cap Index declined -0.17% while the FTSE ST Small Cap Index declined -0.24%. The top active stocks were SingTel (+0.46%), DBS (-0.10%), UOB (-0.99%), Global Logistic (+0.38%) and OCBC Bank (-0.75%). The outperforming sectors today were represented by the FTSE ST Technology Index (+1.08%). The two biggest stocks of the FTSE ST Technology Index are Silverlake Axis (+1.86%) and STATS ChipPAC (unchanged). The underperforming sector was the FTSE ST Basic Materials Index, which declined -1.88% with Midas Holdings’ share price declining -3.23% and Geo Energy Resources’ share price declining -0.52%. The three most active Exchange Traded Funds (ETFs) by value today were the IS MSCI India (+0.13%), DBXT MSCI China TRN ETF (+1.25%), DBXT FT China 25 ETF (+0.28%). The three most active Real Estate Investment Trusts (REITs) by value were CapitaMall Trust (+0.92%), Ascendas REIT (+1.17%), Suntec REIT (-1.07%). The most active index warrants by value today were HSI25000MBeCW150429 (+6.12%), HSI24800MBeCW150528 (+5.80%), HSI24000MBePW150528 (-7.32%) - Mississippi’s Rankin County School District has issued an online survey meant to gauge public opinion of a potential bond issue to build new classrooms. The bond issue would be used for construction of new instructional facilities, and school board officials have been discussing the possibility for a while. No specific details of the amount or number of facilities have been released, but school board Vice President Ann Sturdivant said district personnel are working to assess the needs. Rankin voters rejected a $169.5m bond issue in 2011 to upgrade and build new classrooms, but Sturdivant said she believes people see the need to remedy overcrowding issues, particularly in the Florence, Brandon and Northwest zones and that tapping the US debt capital markets will be a logical step -

West Midlands Integrated Transport Authority completes first Local Government Pension Scheme buy-in

Friday, 20 April 2012
West Midlands Integrated Transport Authority completes first Local Government Pension Scheme buy-in West Midlands Integrated Transport Authority (WMITA) has completed the buy-in of its pensioners with Prudential and the assistance of Mercer and Squire Saunders. This is the first  local authority involvement in UK’s buy-in market. With a premium in the region of £272m, this is the largest such transaction to date in 2012. http://www.ftseglobalmarkets.com/

West Midlands Integrated Transport Authority (WMITA) has completed the buy-in of its pensioners with Prudential and the assistance of Mercer and Squire Saunders. This is the first  local authority involvement in UK’s buy-in market. With a premium in the region of £272m, this is the largest such transaction to date in 2012.

West Midlands Integrated Transport Authority (WMITA) has completed the buy-in of its pensioners with Prudential and the assistance of Mercer and Squire Saunders. This is the first such transaction for any local government pension fund. With a premium in the region of £272m, this is the largest such transaction to date in 2012.

A buy-in is an insurance wrapper which provides payment of pensions for the insured section of a pension fund’s members. The Fund continues to be managed as before but the transaction gives them certainty over their costs. This is distinct from a buyout where the liabilities are fully transferred to an insurance company.



According to Geik Drever, director of Pensions at the West Midlands Pension Fund, the transaction forms an important part of the WMITA Fund’s risk management strategy, "and has insured  circa 50% of the fund’s liabilities. It has protected the fund and the sponsor against the volatility of investment markets and any unanticipated increases in life expectancy of the pensioners. Risk management is a very important part of local authority governance for both the main fund and the WMITA Fund, and as such this is a welcome outcome given the policies in place for the Funds as well as the Authority.”

According to Clifford Sims, partner at Squire Saunders, the law firm which advised the authority and its fund on the legal issues surrounding the transaction: “As in all local government contracts, the public sector procurement process, which requires great depth of transparency and objectivity, had to be followed. This transaction is the first time that these procedures have been entwined in the processes surrounding a bulk annuity transaction. Another feature was that the price was determined by an electronic auction process enabling the price to be settled in a matter of hours.”

Paul Middleman, fund actuary and head of Public Sector Consulting, adds, "Whilst we have seen this in the private sector this is breaking new ground in the sector in terms of local authority pension fund risk management for a sponsoring employer and ultimately the taxpayer. The transaction required a team with specialist knowledge and experience when determining whether it was the right option. Now one Fund has taken the plunge we could see this becoming a viable option for Funds when dealing with legacy liabilities as part of the governance around their risk management strategy."

Squire Sanders' team was headed by pensions partner Clifford Sims, assisted by senior associate Ohad Graber-Soudry on procurement issues and pensions associate Sian Williams. Global legal practice Squire Sanders, with 37 offices in 18 countries, has one of the largest pensions law teams in the UK. 

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