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Anda tidak akan pernah mendapatkan pekerjaan jika Anda tidak memiliki jawaban yang baik untuk pertanyaan wawancara kerja yang sering diajukan Pilih jawaban yang tepat untuk menentukan apakah Anda siap untuk wawancara kerja yang sukses. Mengapa Anda Ingin Pekerjaan Ini Pilih jawaban yang benar: Saya ingin mendapatkan pengetahuan dan pengalaman dalam bidang pekerjaan ini memberikan pengembangan karir jangka panjang Pekerjaan ini merupakan kesempatan nyata bagi saya untuk tumbuh dan berkembang sehingga saya dapat memberi dampak dan Membawa keuntungan bagi perusahaan Pekerjaan ini akan membantu saya mengasumsikan tingkat lain dalam karir saya Menguji Keterampilan Wawancara Kerja Anda Terima kasih telah meluangkan waktu untuk wawancara dengan kami, namun kami memutuskan untuk mempekerjakan orang lain. Tidak ada pencari kerja yang ingin mendengar kata-kata ini setelah wawancara mereka. Catatan Menjawab pertanyaan wawancara kerja ini salah bisa memberi Anda pekerjaan baru AndaCommand satu dari enam jenis raksasa dan mengklaim hak untuk menguasai semua raksasa di Assault of the Giants - Tersedia Sekarang Bekerja sama dengan pemain lain untuk memaksa mayat hidup kembali melalui kekosongan Dalam permainan kartu baru, The Banishing Pre-Order Today Plakat Pijatan Pikiran Flayer pasti akan menarik perhatian setiap orang (tidak ada pengendalian pikiran yang diperlukan). - Pre-Order Today Marvel Dice Masters: Iron Man and War Machine mengungkap versi armor Iron Mans NEVER SEBELUM DILIHATKAN di Dice Masters Dapatkan Sekarang Mainkan permainan menakjubkan, dapatkan hadiah eksklusif konvensi, dan dukunglah permainan permainan lokal Acara mulai 4 Februari 2017 - Mendaftar untuk WKO Musim Dingin 2017 Hari Ini Teenage Mutant Ninja Turtles Dice Masters: Pahlawan di Kotak Set Setengah Shell bahkan memiliki lebih banyak tindakan kura-kura yang Anda inginkan Tersedia Sekarang Hiasi istana, ruang tahta atau tempat tinggal Anda dengan rekreasi menakjubkan dari Dungeons Dragons ini. Red Dragon - Tersedia Sekarang Para pahlawan, penjahat, dan monster dari Alam yang Terlupakan kembali dengan Ikon DD dari Alam: Monster Menagerie II - Tersedia Sekarang WizKids membawa lebih banyak makanan bergulir dadu ke meja dengan rilis baru, Dice Stars - Tersedia Sekarang Cast mantra dan bersaing dengan penyihir lain dalam perlombaan epik untuk menjarah Rock Paper Wizard adalah permainan pesta yang menarik untuk 3-6 pemain - Tersedia Sekarang Burkes Gambit Tersedia Sekarang Siap untuk A N Edge Seat Thriller Seat Anda Set di Space Klik Banner ini untuk Mempelajari Lebih Banyak Blank White Dice, dirancang oleh Jonathan Leistiko, adalah permainan baru yang mendebarkan pada permainan dadu Tersedia Sekarang Skor kaos WizKids resmi Anda, hoodies, barang dagangan dan banyak lagi Kumpulkan pahlawan Anda, bangun Tim Anda dan kalahkan musuh Anda di banyak dunia HeroClix. Di HeroClix Anda bisa menjadi pahlawan yang Anda impikan atau penjahat dari mimpi buruk Anda. Dengan ribuan karakter untuk dipilih dan peta medan dari seluruh jagat raya, siapa tahu di mana HeroClix akan mengantarmu. Attack Wing adalah game tempur tempur taktis yang serba cepat, yang menampilkan tokoh koleksi berdasarkan Star Trek Universe dan the Dungeons Dragons Forgotten Realms. Dengan menggunakan sistem manuver FlightPath, komando tentara Anda dalam pertempuran epik menyesuaikan tentara Anda dengan peralatan, senjata, kemampuan khusus, dan lebih banyak lagi Dice Masters adalah merek cross-shot yang terpukul dengan memanfaatkan platform Dice Building Game milik WizKids dimana para pemain mengumpulkan dan mengumpulkan tim mereka. Dadu karakter dan pertempuran dalam permainan head-to-head. Seperti halnya Quarriors, game yang menggebrak Dice Building Games, Michael Elliott dan Eric M. Lang memimpin karya desain untuk apa yang pasti ada di daftar menonton kebanyakan orang. Hillside, NJ 17 Februari 2017 WizKids dengan bangga mengumumkan perilisan Marvel Dice Masters: Iron Man and War Machine Starter Ditetapkan di toko-toko permainan lokal yang ramah di AS Dirancang oleh Mike Elliott dan Eric M. Lang, the Marvel Dice Masters: Iron Man dan War Machine Starter Set mengembang pada permainan game dadu, Masters Dice, dan pasti akan menyebabkan peperangan sengit di atas meja. HILLSIDE, NJ 16 Februari 2017 Game board yang akan datang The Expanse, berdasarkan serial televisi Syfy yang dilempari dengan nama yang sama, akan dirilis Juni ini seperti yang diumumkan oleh presiden WizKids, Justin Ziran. WizKids, pemimpin industri dalam miniatur plastik pre-painted berkualitas dan penerbit game dan aksesoris meja premium, dengan bangga mengumumkan bahwa Assault of the Giants Board Game sekarang tersedia di seluruh Amerika Utara. NEW RELEASE Assault of Giants Assault of Giants adalah permainan papan Dungeons amp Dragons baru yang dirancang oleh Andrew Parks yang menantang pemain untuk memimpin satu dari enam jenis raksasa dan mengklaim hak untuk menguasai semua raksasa. ACARA SAAT INI Bermain di Mana Saja Caisse de dpt et placement du Qubec hari ini merilis hasil finansialnya untuk tahun kalender 2016, yang menghasilkan pengembalian tahunan 10,2 lima tahun. La Caisse de dpt et placement du Qubec hari ini merilis hasil finansialnya untuk tahun yang berakhir pada tanggal 31 Desember 2016. Pendapatan rata-rata tertimbang tahunan pada nasabahnya8217 mencapai 10.2 selama lima tahun dan 7,6 pada tahun 2016. Aset bersih mencapai 270,7 miliar, meningkat 111,7 Miliar selama lima tahun Dengan hasil investasi bersih 100 miliar dan 11,7 miliar pada simpanan bersih dari kliennya. Pada 2016, hasil investasi bersih mencapai 18,4 miliar dan net deposits mencapai 4,3 miliar. Lebih dari lima tahun, selisih antara kembalinya la Caisse8217 dan portofolio patokannya mewakili lebih dari 12,3 miliar nilai tambah untuk kliennya. Pada 2016, selisihnya setara dengan 4,4 miliar nilai tambah. Caisse dan benchmark portfolio return 8220 Strategi kami, yang berfokus pada pemilihan aset yang ketat, terus memberikan hasil yang solid, 8221 mengatakan Michael Sabia, Presiden dan Chief Executive Officer la Caisse. Selama lima tahun, terlepas dari kondisi pasar yang jauh berbeda dari tahun ke tahun, kami menghasilkan imbal hasil tahunan 10.2.8221 8220 Di bidang ekonomi, isu mendasar tetap sama: pertumbuhan global yang lambat, diperburuk oleh investasi bisnis yang rendah. Pada saat yang sama, ada juga risiko geopolitik yang signifikan. Mengingat kepuasan pasar yang relatif, kita perlu menerapkan pendekatan yang hati-hati.8221 8220Namun, mengambil pendekatan yang bijaksana tidak berarti tidak bertindak, karena ada peluang untuk ditangkap di lingkungan ini. Melalui eksposur global kami, kehadiran kami di Qubec, dan ketegaran analisis dan proses kami, kami memiliki posisi yang baik untuk memanfaatkan peluang terbaik di dunia dan menghadapi tantangan apapun, 8221 menambahkan Sabia. KEMBALI OLEH ASSET CLASS HIGHLIGHTS OF ACCOMPLISHMENT Strategi yang telah diterapkan oleh la Caisse selama tujuh tahun berfokus pada pendekatan manajemen pengembalian mutlak untuk memilih sekuritas dan aset dengan kualitas terbaik, berdasarkan analisis fundamental. Strategi La Caisse8217s juga bertujuan untuk meningkatkan eksposurnya terhadap pasar global dan memperkuat dampaknya di Qubec. Hasilnya adalah portofolio terdiversifikasi dengan baik yang menghasilkan nilai di luar pasar dan membawa stabilitas jangka panjang. Obligasi: kinerja kredit korporasi menonjol Portofolio Obligasi, dengan total lebih dari 68 miliar, membukukan pengembalian 3,9 selama lima tahun, lebih tinggi dari pada benchmarknya. Bedanya setara dengan nilai tambah 1,6 miliar. Efek perusahaan publik dan swasta dan pengelolaan kredit secara aktif memberikan kontribusi terhadap return portofolio. Pada 2016, meskipun terjadi kenaikan suku bunga pada akhir tahun, portofolio tersebut membukukan return 3.1. Ini diuntungkan oleh berlanjutnya investasi pada hutang pasar tumbuh dan dari kinerja hutang perusahaan yang solid, terutama di sektor industri. Ekuitas publik: imbal hasil yang berkelanjutan selama lima tahun dan rebound pasar Kanada di tahun 2016 Selama periode lima tahun, imbal hasil tahunan dari keseluruhan portofolio Ekuitas Publik mencapai 14,1. Selain menunjukkan pertumbuhan pasar yang solid selama periode tersebut, tingkat pengembalian melampaui benchmark, mencerminkan keragaman luas portofolio, fokus pada sekuritas berkualitas dan mitra terpilih di pasar pertumbuhan. Mandat Global Quality, Canada and Growth Markets menghasilkan masing-masing imbal hasil tahunan 18,6, 10,6 dan 8.1, menciptakan 5,8 miliar nilai tambah. Untuk tahun 2016, kembalinya 4.0 pada mandat Mutu Global mencerminkan depresiasi mata uang internasional terhadap dolar Kanada. Mandat terus menjadi jauh lebih tidak stabil daripada pasar. Mandat Kanada, dengan pengembalian 22,7, diuntungkan oleh pasar Kanada yang kuat, didorong oleh pemulihan harga minyak dan komoditas dan kinerja sektor keuangan yang solid, terutama pada paruh kedua tahun ini. Aset kurang likuid: globalisasi berjalan dengan baik dan kinerja yang solid Tiga portofolio aset kurang likuid 8211 Real Estate, Infrastructure and Private Equity 8211 membukukan return 12,3 tahunan selama lima tahun, menunjukkan hasil yang solid dan stabil dari waktu ke waktu. Selama periode ini, investasi mencapai lebih dari 60,1 miliar. Pada tahun 2016, 2,4 miliar diinvestasikan di pasar pertumbuhan, termasuk 1,3 miliar di India, di mana prospek pertumbuhannya baik dan reformasi struktural berjalan dengan baik. Portofolio aset yang kurang likuid sangat penting bagi strategi globalisasi la Caisse8217, dengan eksposur mereka di luar Kanada saat ini mencapai 70. Lebih khusus lagi, di Real Estate. Ivanho Cambridge menginvestasikan 5,8 miliar dan strategi diversifikasi berbasis geografis dan sektor terus berjalan. Di Amerika Serikat, anak perusahaan Caisse memperoleh sisa kepentingan di 330 Hudson Street dan 1211 Avenue of Americas di New York dan menyelesaikan pembangunan menara perkantoran River Point di Chicago. Di sektor perumahan, strategi di kota-kota seperti London, San Francisco dan New York dan permintaan properti hunian yang stabil menghasilkan imbal hasil yang solid. Di Eropa, Ivanho Cambridge dan rekannya TPG juga menyelesaikan penjualan P3 Logistic Parks, salah satu transaksi real estat terbesar di benua ini pada tahun 2016. Di Asia Pasifik, Ivanho Cambridge mendapatkan ketertarikan pada perusahaan LOGOS, mitra investasinya di sektor logistik, di samping yang terus berinvestasi di Shanghai, Singapura dan Melbourne. Dalam Ekuitas Swasta. La Caisse menginvestasikan 7,8 miliar pada tahun lalu, di pasar dan industri yang terdiversifikasi dengan baik. Melalui transaksi yang dilakukan pada 2016, la Caisse mengembangkan kemitraan strategis dengan para pendiri, keluarga pengusaha dan operator yang memiliki visi jangka panjang. Di Amerika Serikat, perusahaan tersebut mengakuisisi saham kepemilikan signifikan di AlixPartners, firma penasihat global. La Caisse juga mengakuisisi 44 perusahaan asuransi Australia Greenstone dan berinvestasi di Eurofins perusahaan Eropa, pemimpin dunia dalam pengujian laboratorium analitik terhadap produk makanan, lingkungan dan farmasi. Di India, la Caisse menjadi mitra Edelweiss, pemimpin dalam aset yang tertekan dan kredit korporasi khusus. Perusahaan ini juga berinvestasi di TVS Logistics Services, penyedia layanan logistik pihak ketiga multinasional India. Di infrastruktur La Caisse bermitra dengan DP World, salah satu operator pelabuhan terbesar di dunia, menciptakan sebuah platform investasi 5 miliar yang ditujukan untuk pelabuhan dan terminal di seluruh dunia. Platform, di mana la Caisse memegang 45 saham, mencakup dua terminal peti kemas Kanada yang terletak di Vancouver dan Prince Rupert. Di sektor energi India8217, la Caisse memperoleh 21 bunga di Azure Power Global, salah satu produsen tenaga surya terbesar di India. Sepanjang tahun, la Caisse juga memperkuat kemitraan jangka panjangnya dengan Grup Pleno Australia8217 dengan memperoleh 20 ketertarikan pada perusahaan tersebut. Bersama-sama, la Caisse dan Plenary Group telah berinvestasi di tujuh proyek infrastruktur sosial di Australia. Dampak di Qubec: fokus pada sektor swasta Di Qubec, la Caisse berfokus pada sektor swasta, yang mendorong pertumbuhan ekonomi. Strategi La Caisse8217s dibangun di sekitar tiga prioritas utama: pertumbuhan dan globalisasi, proyek yang berdampak, dan inovasi dan generasi berikutnya. Pertumbuhan dan globalisasi Pada tahun 2016, la Caisse bekerja sama dengan tim manajemen Groupe Marcelle8217 saat mengakuisisi Lise Watier Cosmtiques untuk menciptakan perusahaan Kanada terkemuka di industri kecantikan. Ini juga mendukung penciptaan entitas baru yang didedikasikan untuk proyek infrastruktur multimedia permanen, dan bekerja dengan Lasik MD selama akuisisi di pasar A.S. Selain itu, dengan menyediakan Fix Auto dengan akses ke jaringannya, la Caisse memfasilitasi perluasan Fix Auto8217 ke China dan Australia dimana perusahaan sekarang memiliki sekitar 100 toko bodi. Pada musim semi 2016, CDPQ Infra, anak perusahaan la Caisse, mengumumkan proyek jaringan angkutan umum terpadu yang terintegrasi untuk menghubungkan pusat kota Montral, Pantai Selatan, Pulau Barat, North Shore dan bandara. Sejak saat itu, beberapa langkah besar telah selesai pada proyek RĂ©es lectrique mtropolitain (REM), dengan konstruksi dijadwalkan dimulai pada 2017. Di real estat, Ivanho Cambridge dan mitranya Claridge mengumumkan niat mereka untuk menginvestasikan 100 juta proyek real estat di wilayah Greater Montral. Anak perusahaan real estat La Caisse8217 juga melanjutkan berbagai proyek konstruksi dan revitalisasi di Qubec, termasuk yang sedang berlangsung di Carrefour de l8217Estrie di Sherbrooke, Maison Manuvie dan Fairmont The Queen Elizabeth di Montral, serta di Place Ste-Foy dan Quartier QB di Qubec. Kota. Inovasi dan generasi berikutnya Di industri media baru, la Caisse melakukan investasi di Triotech, yang merancang, memproduksi dan memasarkan wahana berdasarkan pengalaman multi-sensorial di Felix amp Paul Studios, yang mengkhususkan diri dalam penciptaan pengalaman realitas maya sinematik dan di Pari , Penyedia layanan musik multi platform terkemuka. La Caisse juga berinvestasi di Hopper, berada di antara 10 aplikasi mobile teratas di industri perjalanan. Di dalam ekosistem listrik, la Caisse menanamkan kembali di Addnergie untuk mendukung rencana penyebaran perusahaan tersebut, yang bertujuan untuk menambahkan 8.000 stasiun pengisian baru di Kanada dalam lima tahun ke depan. Dalam lima tahun terakhir, investasi dan komitmen baru-baru ini di Qubec di Qubec mencapai 13,7 miliar, dengan 2,5 miliar pada tahun 2016. Angka-angka ini tidak termasuk investasi dalam Bombardier Transportation dan komitmen yang direncanakan 3,1 miliar oleh la Caisse untuk melaksanakan proyek REM. . Per 31 Desember, aset Caisse di Qubec mencapai 58,8 miliar, dimana 36,9 miliar berada di sektor swasta, yang merupakan peningkatan aset pribadi dibandingkan tahun 2015. Beban usaha La Caisse8217, termasuk biaya pengelolaan eksternal, mencapai 501 juta pada tahun 2016. Rasio biaya adalah 20,0 sen per 100 dari rata-rata aset bersih, tingkat yang lebih baik dibandingkan dengan industrinya. Lembaga pemeringkat kredit menegaskan kembali peringkat nilai investasi La Caisse8217 dengan outlook stabil, yaitu AAA (DBRS), AAA (SampP) et Aaa (Moody8217s). TENTANG PENCARIAN CAISSE DE DPT ET QUBEC Caisse de dpt et placement du Qubec (CDPQ) adalah investor institusi jangka panjang yang mengelola dana terutama untuk rencana pensiun dan asuransi publik dan parapublic. Pada tanggal 31 Desember 2016, aset tetap dimiliki 270,7 miliar. Sebagai salah satu manajer fund fund terdepan Canadas, CDPQ berinvestasi secara global di pasar keuangan utama, ekuitas swasta, infrastruktur dan real estat. Untuk informasi lebih lanjut, kunjungi cdpq. Ikuti kami di Twitter LaCDPQ atau lihat halaman Facebook atau LinkedIn kami. Anda dapat melihat siaran pers ini dan lampiran lainnya di bagian bawah halaman ini. Anda juga bisa membaca artikel hasil di sini. Saya pikir hasil keseluruhan berbicara sendiri. Caisse mengungguli benchmark dengan 180 basis poin pada 2016, dan yang lebih penting lagi. 110 basis poin selama lima tahun terakhir, menghasilkan 12,3 miliar nilai tambah atas patokan untuk kliennya. Belum ada Laporan Tahunan yang tersedia (keluar pada bulan April), namun Caisse memberikan pengembalian portofolio khusus untuk tahun 2016 dan memberikan imbal hasil lima tahun yang dapat dihitung setiap tahun (klik pada gambar): Seperti yang dapat Anda lihat, Pendapatan Tetap yang dihasilkan pada tahun 2016, dipukul Benchmark sebesar 110 basis poin, dan 3.7 yang disetahunkan selama lima tahun terakhir, 600 basis poin di atas benchmark. Siaran pers menyatakan: Portofolio Obligasi, yang berjumlah lebih dari 68 miliar, mencatat pengembalian 3,9 selama lima tahun, lebih tinggi dari pada benchmarknya. Bedanya setara dengan nilai tambah 1,6 miliar. Efek perusahaan publik dan swasta dan pengelolaan kredit secara aktif memberikan kontribusi terhadap return portofolio. Pada 2016, meskipun terjadi kenaikan suku bunga pada akhir tahun, portofolio tersebut membukukan return 3.1. Ini diuntungkan oleh berlanjutnya investasi pada hutang pasar tumbuh dan dari kinerja hutang perusahaan yang solid, terutama di sektor industri. Dengan kata lain, Obligasi menyumbang 1,6 miliar dari 4,4 miliar nilai tambah pada 2016, atau 36 dari nilai tambah atas total patokan dana tahun lalu. Itu sangat mengesankan untuk portofolio obligasi tapi saya akan hati-hati menafsirkan hasil ini karena mereka menyarankan agar benchmark digunakan untuk mengevaluasi portofolio yang mendasarinya tidak mencerminkan risiko kredit yang diambil (misalnya, mengenai hutang pasar dan obligasi korporasi yang sedang berkembang dan memiliki Indeks obligasi pemerintah sebagai patokan). Saya menyebutkan hal ini karena jenis outperformance dalam obligasi ini tidak pernah terjadi kecuali tentu saja para manajer memainkan benchmark mereka dengan mengambil lebih banyak risiko kredit dibandingkan dengan patokan tersebut. Juga perlu dicatat bagaimana kinerja yang lebih baik dalam hutang real estat selama setahun terakhir dan lima tahun membantu Pendapatan Tetap secara keseluruhan kembali. Sekali lagi, ini hanya mengambil lebih banyak risiko kredit untuk mengalahkan patokan dan siapa pun yang mengelola portofolio pendapatan tetap tahu persis apa yang saya bicarakan. Yang juga bukan rahasia, tim Caisses Fixed Income telah memperpendek ikatan panjang selama beberapa tahun terakhir, dan kehilangan uang untuk carry and rolldown, jadi mungkin mereka memutuskan untuk mengambil lebih banyak lagi pasar dan risiko hutang perusahaan untuk mengatasi kerugian ini dan bahwa Membayar mahal. Selain itu, cadangan yield obligasi pemerintah AS tahun lalu juga membantu mereka jika mereka pendek. Sekarang, sebelum saya mendapatkan Marc Cormier dan seluruh tim Penghasilan Tetap di Caisse melompat gila (tidak ingin mendapatkan sisi buruk), saya tidak mengatakan hasil ini mengerikan - jauh dari itu, sangat bagus - tapi mari kita panggil Sebagai sekop sekop, tim Caisse Fixed Income mengambil risiko kredit yang besar untuk mengungguli patokan tahun lalu, dan ini perlu dibahas secara rinci dalam Laporan Tahunan ketika dikeluarkan pada bulan April. Ke depan, Caisse menganggap pesta itu berakhir untuk obligasi. Caisse de Depot et Penempatan du Quebec, manajer investasi dana pensiun terbesar kedua di Kanada, mengurangi kepemilikan obligasi dan mencurahkan lebih banyak sumber daya untuk kredit korporasi dan hutang real estat. Pesta berakhir, karena kita akan merestrukturisasi portofolio ini untuk menurunkan investasi pada obligasi tradisional dan meningkatkan dan melakukan diversifikasi investasi kita secara kredit, Chief Executive Officer 8221 Michael Sabia mengatakan di Montreal pada hari Jumat. Dia mengatakan bahwa Caisse akan mengurangi jumlah pendapatan tetap dalam portofolio dan meningkat dalam beberapa tahun ke depan pangsa aset kurang likuid. Portofolio pendapatan tetap akan dibagi menjadi dua bagian: pendapatan tetap tradisional - obligasi federal dan provinsi Kanada - yang akan menjadi 8220 lebih signifikan, 8221 dan bagian lain berdasarkan kredit, seperti kredit korporasi dan hutang real estat, katanya. Kita akan lebih mengutamakan pembangunan portofolio itu karena kita pikir itu bisa memberi kita tingkat risiko yang relatif rendah namun keuntungannya agak lebih tinggi, 8221 dia mengatakan tentang rencana fokus kredit. Investasi di obligasi provinsi dan federal Kanada akan menyusut secara otomatis, tapi sedikit demi sedikit, 8221 katanya. Catatan: Saya menyukai hutang pribadi sebagai kelas aset namun tidak setuju, bukan awal dari akhir untuk obligasi Selain Obligasi, apa lagi yang saya perhatikan Secara sangat singkat, hasil bagus di Real Estate, mengungguli patokannya secara keseluruhan sebesar 320 basis pada tahun 2016. Lebih dari Lima tahun terakhir, bagaimanapun, Real Estate telah mengungguli tolok ukurnya sebesar 400 basis poin. Sekali lagi, sebuah kata peringatan bagi kebanyakan orang yang tidak mengerti bagaimana membaca hasil ini dengan benar. Patokan yang digunakan Caisse untuk mengevaluasi portofolio Real Estat jauh lebih sulit dikalahkan daripada rekan-rekan besarnya di Kanada. Saya sudah mengatakannya sebelumnya dan saya mengatakannya lagi, anak perusahaan Caisses Real Estate, Ivanho Cambridge. Melakukan pekerjaan yang benar-benar bagus dan ini adalah salah satu investor real estat terbaik di dunia. Sejauh Infrastruktur, CDPQ Infra sedikit mengalahkan patokannya pada 2016 dengan 30 basis poin, namun mengikuti benchmark sebesar 250 basis poin selama lima tahun terakhir. Sekali lagi, tolok ukur di Infrastruktur sangat sulit dikalahkan, jadi saya tidak khawatir dengan performa buruk ini selama lima tahun terakhir. Sama seperti di Real Estate, orang-orang yang bekerja di CDPQ Infra secara harfiah merupakan keturunan yang beragam, ahli infrastruktur di ladang coklat dan proyek greenfield. Ketika Michael Sabia baru saja keluar untuk membela proyek Montreal REM. Dia bersikap terlalu sopan. Saya membuat catatan langsung di blog saya dan tidak menahan diri, tapi saya heran berapa banyak kecoak yang masih mengintai di luar sana mempertanyakan tata pemerintahan Caisses dalam proyek ini (betapa leluconnya, mereka memiliki agenda terang-terangan melawan Caisse dan proyek unik ini tapi Mandat Michael Sabias diperbarui selama empat tahun lagi sehingga dia akan tertawa terakhir begitu selesai dan operasionalnya). Dalam Private Equity, performa luar biasa di atas indeks pada tahun 2016 sangat spektakuler (520 basis poin atau 5.2) namun selama lima tahun terakhir, kinerja yang lebih sederhana (120 basis poin). Seperti dana pensiun besar Kanada lainnya, Caisse berinvestasi pada dana ekuitas swasta teratas di seluruh dunia dan melakukan banyak investasi bersama untuk mengurangi biaya keseluruhan. Catatan: Andreas Beroutsos yang sebelumnya mengawasi semua kegiatan investasi ekuitas dan investasi swasta La Caisse8217 di luar Quebec sudah tidak ada lagi (mendengar beberapa cerita yang tidak berdasar dan menarik). Pada bulan April, Caisse menata ulang unit infrastruktur dan ekuitas swasta di bawah pemimpin baru. Di Public Equities, kinerja yang sangat mengesankan di Kanada, mengungguli benchmark sebesar 260 basis poin pada 2016 dan 160 basis poin dalam lima tahun terakhir. Portofolio Kualitas Global menurunkan benchmark sebesar 30 basis poin pada 2016 namun masih mengungguli hampir 500 basis poin selama lima tahun terakhir. Sekali lagi, saya mempertanyakan portofolio Kualitas Global ini dan patokan yang mereka gunakan untuk mengevaluasinya dan saya secara terbuka menyatakan apakah itu bagus, mengapa tidak ada dana pensiun besar Kanada lainnya yang melakukan hal yang sama (Jawab: tidak lulus tes bau papan mereka. Orang-orang itu bagus, mereka seharusnya bekerja untuk Warren Buffet, bukan Caisse) Itu dari saya, saya sudah cukup banyak. Luangkan waktu untuk membahas Laporan Tahunan 2015 saat Anda menunggu tahun 2016 muncul pada bulan April. Di sana Anda akan menemukan segala macam rincian seperti tolok ukur yang mengatur portofolio khusus (klik pada gambar): Seperti yang saya katakan, tidak ada makan siang gratis di tolok ukur Real Estat dan Infrastruktur namun ada beberapa masalah dengan tolok ukur lain yang tidak mencerminkan risiko yang ada. Diambil dalam portofolio yang mendasari (portofolio Obligasi dan Kualitas Global, misalnya). Net, bersih, bagaimanapun, saya akan mengatakan tolok ukur yang digunakan Caisse masih merupakan yang terberat di Kanada dan telah memberikan jangka pendek yang solid dan yang lebih penting, hasil jangka panjang. Pekerjaannya yang sulit mengelola portofolio ini dan mengalahkan tolok ukur ini, saya tahu, saya pernah ke sana dan orang-orang tidak menyadari betapa sulitnya hal itu, terutama selama tahun tertentu. Inilah sebabnya mengapa saya terutama menekankan hasil jangka panjang, satu-satunya yang benar-benar diperhitungkan. Dan hasil jangka panjang adalah hal yang penting dalam hal kompensasi para manajer senior Caisses (dari Laporan Tahunan 2015, klik pada gambar): Sekali lagi, Mr. Beroutsos tidak lagi bersama Caisse dan juga bukan Bernard Morency. Anda dapat melihat anggota Komite Eksekutif Caisses di sini (satu tambahan penting tahun lalu adalah Jean Michel, Wakil Presiden Eksekutif, Deposan dan Portofolio Total dia memiliki reputasi yang bagus dan membantu pensiun Air Canadas meningkat dari abu untuk didanai sepenuhnya lagi) . Hal lain yang patut disebutkan adalah eksekutif Caisses dibayar dengan adil namun masih dibayar di bawah relatif terhadap rekan mereka dengan dana Canadian yang besar (tolok ukur fuzzy di toko-toko lain berperan di sini tapi juga budaya di Quebec di mana orang menjadi cemburu dan marah jika dana pensiun senior Eksekutif yang mengelola miliaran mendapatkan bayaran jutaan dolar ditambah paket bahkan jika itu adalah apa yang benar-benar berharga). Saya akan menyematkan klip dari konferensi pers Caisses saat tersedia sehingga kembalilah untuk meninjau kembali komentar ini. Jika ada yang perlu ditambahkan, tolong email saya di LKolivakisgmail. Di bawah ini, Michael Sabia berbicara dengan Mutsumi Takahashi di studio CTV News Montreal, pada tanggal 20 Desember 2016. Dengarkan baik-baik apa yang dia katakan tentang proyek REM, hadapi kritikus, dan apa yang dia katakan tentang perusahaan Quebec yang beroperasi di pasar global. Diskusi bagus disini Scott Rechler, CEO RXR Realty, berada di CNBC pagi ini, berbicara mengapa masuk akal untuk mendanai proyek infrastruktur melalui PPP. Diskusi yang sangat menarik, pada satu titik, menjelang akhir, dia mengatakan bahwa harganya 500 juta per mil untuk membangun kereta bawah tanah di Paris dan Tokyo, namun harganya 2 miliar per mil untuk membangun dua kereta bawah tanah terakhir di New York City karena semua peraturan Dan birokrasi. Terakhir, mohon meluangkan waktu untuk mendukung blog ini dengan menyumbangkan atau berlangganannya di bawah gambar saya di sisi kanan. Saya berterima kasih kepada kalian semua yang meluangkan waktu untuk menunjukkan dukungan finansial Anda, sangat dihargai, dan saya meminta orang lain untuk melakukan hal yang sama. Saya bekerja sangat keras untuk memberi Anda wawasan tentang pensiun dan investasi jadi tolong berikan kontribusi untuk mendukung usaha saya. Terima kasih. Hema Parmar dari Bloomberg melaporkan, Hedge Fund Gotham Mengeksplorasi biaya peralihan untuk Mengikat Bayaran ke Pengembalian: Manajemen Aset Gotham. Manajer uang 6 miliar yang dikelola oleh Joel Greenblatt dan Robert Goldstein, sedang menjajaki struktur biaya baru yang menghubungkan lebih banyak dana yang dibayarkan ke kinerja. Perusahaan tersebut sedang dalam pembicaraan dengan beberapa investor mengenai hedge fund Gotham Neutral Strategy mengenai biaya satu kali: lebih besar dari biaya pengelolaan 1 persen atau 30 persen pengembalian yang melebihi tolok ukur dana tersebut, menurut dua orang yang mengetahui masalah ini. Dana ekuitas saat ini membebankan 1,5 persen aset dalam biaya manajemen dan 20 persen keuntungan, kata salah satu orang. Hedge fund telah melakukan pemangkasan dan mengubah biaya mereka di tengah reaksi balik atas keuntungan yang tidak bersemangat dan kritik bahwa model standar untuk mengenakan biaya manajemen 2 persen dan biaya insentif 20 persen terlalu mahal. Sebagian besar hedge fund membebankan investor terlalu banyak untuk kinerja yang mereka berikan, Greenblatt, yang merupakan kepala investasi garmen Gotham8217, mengatakan kepada Bloomberg Television dalam sebuah wawancara pada bulan Mei 2014. Dana Strategi Netral Gotham naik 7,5 persen tahun lalu, menurut orang lain yang mengetahui masalah ini. Indeks Netral Pasar HFRI naik sekitar 2 persen pada saat itu. Sejak awal Juli 2009, dana tersebut telah mendapat 7 persen tahunan. Jika struktur biaya baru diadopsi, Gotham akan bergabung dengan hedge fund yang berbasis di Hong Kong Myriad Asset Management dan yang lainnya bergerak ke model 1-atau-30, yang telah diperjuangkan oleh investor termasuk Sistem Pensiun Guru di Texas. Pada pertengahan Februari, setidaknya 16 hedge fund multi-miliar dolar di seluruh dunia baik dalam proses penerapan atau telah menerapkan struktur biaya 1-atau-30 yang diperkenalkan ke industri pada kuartal keempat tahun 2016, Jonathan Koerner Dari Albourne Partners mengatakan dalam sebuah wawancara telepon pada 16 Februari. 8220 Tujuan dari 82161 atau 308217 adalah untuk lebih konsisten memastikan bahwa investor mempertahankan 70 persen alfa yang dihasilkan untuk investasinya dalam hedge fund, 8221 Koerner menulis dalam sebuah makalah putih yang diterbitkan di Desember oleh Albourne, yang memberi saran kepada klien mengenai lebih dari 400 miliar investasi alternatif di seluruh dunia. Biaya pengelolaan yang dibebankan pada tahun ketika dana yang kinerjanya kurang dapat diukur dari pembayaran biaya kinerja tahun depan, sehingga menghasilkan pulsa biaya kinerja prabayar, kata dia bulan lalu. Dana Penguin Gotham, yang bertaruh pada dan terhadap saham A.S., naik 25 persen tahun lalu, menurut salah satu orang yang mengetahui masalah ini, dibandingkan dengan kenaikan Indeks Ekuitas Hedge-Hedge sebesar 5,4 persen. Sejak dimulainya tahun 2013, dana tersebut telah mengembalikan 15 persen tahunan. Seorang perwakilan untuk perusahaan tersebut menolak berkomentar. Jadi, apa semua ini tentang dasarnya, Joel Greenblatt dari Gotham benar, sebagian besar dana lindung nilai sangat menagih kepada investor atas kinerja yang mereka berikan, dan dia mengusulkan sesuatu untuk lebih menyesuaikan minat dengan para investornya. Mengapa tidak setiap hedge fund besar melakukan ini Singkatnya, karena mereka tidak mau, konten yang sempurna membuat investor mereka dengan biaya gila tidak peduli bagaimana kinerjanya, atau mereka tidak perlu karena mereka melakukannya dengan baik dan memilikinya atau membiarkannya bersikap Ketika datang ke biaya mereka. Dulu, selalu ada dana lindung nilai yang tidak sesuai yang akan mengajukan biaya lebih rendah kepada investor. Tapi di sini kami memiliki manajer hedge fund yang sangat dihormati dan dihormati yang telah tampil dengan baik selama bertahun-tahun yang menyatakan bahwa pertunjukannya telah selesai dan dia mengajukan sesuatu yang lebih baik kepada para investornya. Sayangnya, saya tidak yakin struktur biaya 1 ATAU 30 yang indah ini akan mendapatkan daya tarik, tidak peduli seberapa banyak pengaruh Albourne. Saya pernah bertukar dengan Dimitri Douaire, sebelumnya dari OPTrust, mengenai topik ini di LinkedIn (klik gambar di bawah) Sekarang, saya mungkin tidak setuju dengan Dimitri apakah memberi syarat atau tidak memberi syarat lebih baik untuk hedge fund yang muncul adalah subsidi atau apakah multi-miliar- Dana lindung nilai dolar harus mengenakan biaya pengelolaan sama sekali, tapi saya benar, kecuali mayoritas investor mulai menerapkan struktur biaya ini di semua investasi mereka, tidak akan mendapatkan daya tarik. Anda dapat membaca lebih lanjut tentang struktur biaya 1 atau 30 di sini. Secara teori, itu masuk akal, kita hanya perlu menunggu satu dekade untuk melihat apakah ia memperoleh daya tarik. Di bawah ini, wawancara Fortune yang lebih tua (2011) di mana Joel Greenblatt berbicara tentang bagaimana mengalahkan pasar (lihat transkrip di sini). Dengarkan baik-baik komentarnya, sangat menarik, dan ingat, saya melacak portofolio Gothams setiap kuartal bersama dengan investor legendaris lainnya ketika saya membahas aktivitas dana terbaik. Tahun lalu, Greenblatt juga berbicara dengan Morningstar tentang memilih manajer aktif. Anda bisa melihat wawancara itu di sini dan membaca transkripnya juga. Sangat bagus dan layak untuk didengarkan. Terakhir, seringkali manajer hedge fund yang sukses dengan strategi menang menutup toko, tapi itulah yang dilakukan Joel Greenblatt pada tahun 1995. Ini sama tidak biasanya untuk kembali ke bisnis lebih dari satu dekade kemudian dengan strategi yang berubah secara dramatis. . Greenblatt muncul di WealthTrack pada tahun 2014 untuk membahas perubahan besar dalam strategi portofolio, dari pendekatan yang sangat terkonsentrasi hingga diversifikasi yang luas. Perhatikan wawancara ini di bawah ini. Dalam sebuah komentar blog baru-baru ini, Yves Smith dari Naked Capitalism menyesali, CalPERS8217 Private Equity Portfolio Terus Menghasilkan Terlalu Sedikit untuk Resiko: We8217ve mengatakan selama beberapa tahun terakhir bahwa ekuitas swasta belum menghasilkan cukup banyak untuk mengkompensasi risiko ekstra, Leverage yang tinggi dan kurangnya likuiditas. Salah satu prinsip utama keuangan adalah bahwa pengambilan risiko ekstra harus dihargai dengan imbal hasil yang lebih tinggi dari waktu ke waktu. Namun, selama lebih dari satu dekade terakhir, portofolio investor khas dari dana ekuitas swasta tidak memberikan imbal hasil tambahan, yang biasanya diperkirakan mencapai 300 basis poin atas benchmark ekuitas publik seperti SampP 500. Kami juga menunjukkan bahwa tolok ukur yang luas itu terlalu menyanjung. Perusahaan ekuitas swasta berinvestasi pada perusahaan yang jauh lebih kecil daripada anggota SampP 500, yang berarti mereka mampu tumbuh pada tingkat yang lebih cepat dalam jangka waktu yang lama. Premi 300 basis poin (3) adalah konvensi tanpa landasan analitis yang kokoh. Beberapa mantan kepala perwira investasi, seperti Andrew Silton, berpendapat bahwa premi yang jauh lebih tinggi, lebih seperti 500 sampai 800 basis poin (5 sampai 8) lebih tepat. Dan sebelum Anda sampai pada masalah luas lainnya dengan mengukur tingkat pengembalian ekuitas swasta, seperti fakta bahwa mereka secara rutin dilebih-lebihkan pada waktu-waktu tertentu, yaitu tepat sebelum dana baru diajukan oleh pasangan umum yang sama, di akhir kehidupan dana, dan Selama pasar beruang, yang semuanya hasil keseluruhan angsa. Dan hal itu sebelum Anda mengetahui fakta bahwa beberapa investor menggunakan tolok ukur yang lebih bagus lagi. Seperti yang dikatakan profesor Oxford Ludovic Phalippou melalui e-mail, dalam dua tahun terakhir, semakin banyak investor beralih dari penggunaan SampP 500 yang sudah murah ke MSCI World Index sebagai patokan mereka. Mengapa Per Phalippou: 8220Karena SampP 500 telah berjalan dengan sangat baik selama tiga tahun terakhir, tidak seperti Indeks Dunia MSCI.8221 Jadi, mengapa ekuitas swasta telah menghasilkan cukup banyak selama dekade terakhir untuk membenarkan biaya yang lumayan Jawaban singkatnya adalah terlalu banyak uang Mengejar kesepakatan Ekuitas swasta adalah ekuitas global yang berlipat ganda dari tahun 2005 sampai 2014. Dan Anda dapat melihat bagaimana hal ini terlihat dalam update kinerja ekuitas pribadi CalPERS8217, dari pertemuan Komite Investasi minggu lalu (dari halaman 14 laporan ini). Dalam keadilan, CalPERS memang memiliki patokan ekuitas pribadi yang lebih ketat daripada banyak rekan sejawatnya (klik pada gambar): Karena bagan itu masih sulit dibaca (berdasarkan disain), mari kita masuk melalui lautan tinta baca. Satu-satunya periode di mana CalPERS mengalahkan tolok ukurnya adalah untuk bulan sebelum tanggal pengukuran 31 Desember 2016, dan dengan 3 basis poin kekalahan. Pada periode pengukuran lainnya, kekurangannya adalah ratusan basis poin: 3 bulan (219) Fiskal YTD (283) 1 tahun (994) 3 tahun (132) 5 tahun (479) 10 tahun (286) Atas kreditnya, CalPERS telah Telah memotong alokasi ekuitas swasta. CalPERS memiliki target ekuitas swasta 14 pada tahun 2012 dan 2013 yang diumumkan pada bulan Desember lalu sehingga menguranginya dari 10 menjadi 8. Seperti begitu banyak rekan-rekannya, CalPERS berharap bahwa ekuitas swasta akan menyelamatkannya dari kekurangan dana, yang terjadi baik karena Keputusan untuk memotong dana selama era dot com, ketika CalPERS terlambat menerima dana, dan kerusakan yang terjadi selama krisis. Setidaknya CalPERS akhirnya mencium kopi. Namun, meski dengan hasil yang mengerikan ini, CalPERS memang memiliki jalan lain: ia dapat mengejar ekuitas swasta dengan sendirinya, yang hampir akan menghilangkan perkiraan 700 basis poin (7) yang dibayarkan kepada pengelola dana ekuitas swasta. CalPERS mengkonfirmasi perkiraan ini oleh Ludovic Phalippou dalam lokakarya ekuitas swasta November 2015. Karena pada saat itu telah mengumpulkan data biaya carry equity pribadi, itu berarti biaya dan biaya penuh setidaknya setinggi itu mungkin telah melaporkan jumlah yang lebih rendah atau menandai angka tersebut sebagai steker tinggi. Getting rid of the fee drag would mean much more return to CalPERS and its retirees, and would make private equity more viable . CalPERS has two ways it could go. One would be a public markets replication strategy, which would target the sort of companies private equity firms buy. Academics have modeled various implementations of this idea, and they show solid 12-14 returns . However, as we8217ve discussed at length, and some pubic pension funds have even admitted, one of the big attractions of private equity is8230drumroll8230 the very way the mangers lie about valuations, particularly in bad equity markets Private equity managers shamelessly pretend that the value of their companies falls less when stocks are in bear territory, giving the illusion that private equity usefully counters portfolio volatility. Anyone with an operating brain cell knows that absent exceptional cases, levered equities will fall more that less heavily geared ones. So the reporting fallacy of knowing where you really stand makes this idea unappetizing to investors . The other way to go about it would be to have an in-house team that does private equity investing. A group of Canadian public pension funds has gone this route and not surprisingly, reports markedly better results net of fees than industry norms . And this is becoming more mainstream, as Reuters reported last Friday (hat tip DO): Some of the world8217s biggest sovereign wealth funds are increasingly striking their own private equity deals rather than relying on external fund managers, in a drive to cut costs and gain more control. With some 6.5 trillion in assets, sovereign investors already account for 19 percent of capital committed to private equity, according to data from research firm Preqin. But mega-funds such as the Abu Dhabi Investment Authority (ADIA), Saudi Arabia8217s Public Investment Fund (PIF) and Singapore8217s GIC, are hiring specialists to find or vet deals 8211 enabling them to negotiate with private equity firms from a position of strength or to go it alone . In 2012 sovereign investors participated in just 77 direct private equity deals. By 2016, that had risen to 137, Thomson Reuters data shows. Deal value more than trebled to 45.2 billion from 14.8 billion 8230. This allows funds to better protect their interests when markets go south. One sovereign investor who spoke on condition of anonymity said that during the global financial crisis, some external funds behaved irrationally . 8220They had different liability streams than us, so they were under pressure to sell at a time when they should have been investing more,8221 the source said. 8220Going more direct means you don8217t have to worry about whether your interests are aligned with other investors8217.8221 And to its credit CalPERS is considering joining this trend 8230after having been deterred from leading it. From a 2016 post : In 1999, CalPERS engaged McKinsey to advise them as to whether they should bring some of their private equity activities in house. My understanding was that some board members thought this issue was worth considering staff was not so keen (perhaps because they doubted they had the skills to do this work themselves and were put off by the idea of being upstaged by outside, better paid recruits). In hearing this tale told many years later, I was perplexed and a bit disturbed to learn that the former managing partner of McKinsey, Ron Daniel, presented the recommendations to CalPERS of not to go this route . Only a very few directors (as in the tenured class of partner) continue at McKinsey beyond normal retirement age one was the head of the important American Express relationship at the insistence of Amex. Daniel served as an ambassador for the firm as well as working on his former clients. Why was he dispatched to work on a one-off assignment that was clearly not important to McKinsey from a relationship standpoint, particularly in light of a large conflict of interest: that he was also the head of the Harvard Corporation, which was also a serious investor in private equity Although the lack of staff enthusiasm was probably a deal killer in and of itself, the McKinsey 8220no go8221 recommendation hinged on two arguments: the state regulatory obstacles (which in fact was not insurmountable CalPERS could almost certainly get a waiver if it sought one), and the culture gap of putting a private equity unit in a public pension fund . Even though the lack of precedents at the time no doubt made this seem like a serious concern, in fact, McKinsey clients like Citibank and JP Morgan by then had figured out how to have units with very divergent business cultures (investment banking versus commercial banking) live successfully under the same roof. And even at CalPERS now, there is a large gap between the pay levels, autonomy, and status of the investment professionals versus the rank and file that handles mundane but nevertheless important tasks like keeping on top of payments from the many government entities that are part of the CalPERS system, maintaining records for and making payments to CalPERS beneficiaries, and running the back office for the investment activities that CalPERS runs internally. Why do I wonder whether McKinsey had additional motives for sending someone as prominent as Daniel to argue forcefully (as he apparently did) that CalPERS reject the idea of doing private equity in house Clearly, if CalPERS went down that path, then as now, the objective would be to reduce the cost of investing in private equity. And it would take funds out of the hand of private equity general partners . The problem with that is that McKinsey had a large and apparently not disclosed conflict: private equity funds were becoming large sources of fees to the firm. By 2002, private equity firms represented more than half of total McKinsey revenues. CalPERS going into private equity would reduce the general partners8217 fees, and over time, McKinsey8217s. In keeping, as we pointed out in 2014. McKinsey acknowledged that the prospects for private equity continuing to deliver outsized returns were dimming . That would seem to make for a strong argument to get private equity firms to lower their fees, and the best leverage would be to bring at least some private equity investing in house, both to reduce costs directly and to provide for more leverage in fee discussions. Yet McKinsey hand-waved unconvincingly about ways that limited partners could contend with the more difficult investment environment, and was discouraging about going direct despite the fact that the Canadian pension funds had done so successfully. Better late than never. Let8217s hope CalPERS pursues this long-overdue idea. Yves Smith, aka Susan Webber of Aurora Advisors. is back at it again, going after CalPERS private equity program, enlisting academic experts like this professor at Oxford who sounds credible but the problem is like so many academics, he doesnt have a clue of what hes talking about, and neither does Yves Smith, unfortunately. Before Ludovic Phalippou, there was a blogger who warned the world of bogus benchmarks in illiquid asset classes and keeps hammering the point that its all about benchmarks stupid. This blogger even did a short stint on Yves blog, Naked Capitalism. before leaving to write for another popular blog for a brief while, Zero Hedge (I now post my comments only on my blog and Im much happier. My advice to bloggers is not to routinely post anywhere else even if they are popular blogs.). My views on benchmarking illiquid assets have evolved because I realize how hard it is to benchmark these assets properly (never mind what Yves and Phalippou think), but that doesnt mean we shouldnt pay attention to these benchmarks (we most certainly should). Ok, let me be fair here, Yves comment above is not ALL nonsense, but there are so many gaps here and the way the information is presented is so blatantly and foolishly biased that a relatively informed reader might read this comment and think CalPERS should just nuke its multi-billion PE program just like it nuked its hedge fund program a couple of years ago. Knowing what was going on at CalPERSs hedge fund program, I actually agreed with that decision. CalPERS never staffed that team appropriately, they didnt know what they were doing and the program produced very disappointing returns, year in, year out, net of billions in fees they were doling out to their lousy external hedge fund managers. Private equity at CalPERS was also one HUGE mess prior to the arrival of Ral Desrochers in May 2011 to head that group. Basically, up until then, CalPERS was everyones private equity cash cow, giving everyone and their mothers an allocation. Their program became one giant PE benchmark for the entire industry. The problem with that approach is it simply doesnt work, especially in private equity where there is a huge dispersion of returns between top funds and bottom funds and there is evidence of performance persistence (although the evidence is somewhat mixed pre and post-2000 ). When Ral Desrochers took over CalPERS PE program, he did what he did at CalSTRS, namely, clean it up, getting rid of underperformers and focusing on having a concentrated portfolio of a few top-performing funds . In others words, allocate more money in fewer and fewer funds, and watch them like a hawk to see if its worth reinvesting in new funds they raise. Its fair to say Ral Desrochers and his team inherited one huge private equity mess because theyre still cleaning up that portfolio, years after he got in power (that is something Yves neglects to mention). Still, private equity is an important asset class, one that has delivered excellent returns for CalPERS over the last 20 years . net of fees (click on image): As far as its benchmark, CalPERS started mulling over a new PE benchmark two years ago and I reviewed the latest publicly available annual PE program review (November, 2015) which states the current policy benchmark of 23 FTSE US 13 FTSE ROW (rest of world) 300 basis points creates unintended active risk for the Program, as well as for the Total Fund . (click on image): Now, instead of reading nonsense on Naked Capitalism, take the time to read this attachment on private equity that CalPERS put out in November 2015, its excellent and discusses performance persistence and the problems benchmarking private equity. I have long argued that the benchmark should be the SampP 500 300 basis points but the truth is the deals are increasingly outside the US and that 300 basis points spread to capture illiquidty and leverage is a bit high and this benchmark does expose the program and the Total Fund to active risk (ie. risk it underperforms its benchmark by a considerable amount) on any given year (not over the long run). Having said this, when I went over CalPERS fiscal 2016 results back in July, I said they werent good and that they were smearing lipstick on a pig : Lastly, and most importantly, lets go over CalPERSs news release, CalPERS Reports Preliminary 2015-16 Fiscal Year Investment Returns : The California Public Employees Retirement System (CalPERS) today reported a preliminary 0.61 percent net return on investments for the 12-month period that ended June 30, 2016. CalPERS assets at the end of the fiscal year stood at more than 295 billion and today stands at 302 billion. CalPERS achieved the positive net return despite volatile financial markets and challenging global economic conditions. Key to the return was the diversification of the Funds portfolio, especially CalPERS fixed income and infrastructure investments . Fixed Income earned a 9.29 percent return, nearly matching its benchmark. Infrastructure delivered an 8.98 percent return, outperforming its benchmark by 4.02 percentage points, or 402 basis points. A basis point is one one-hundredth of a percentage point. The CalPERS Private Equity program also bested its benchmark by 253 basis points, earning 1.70 percent . Positive performance in a year of turbulent financial markets is an accomplishment that we are proud of, said Ted Eliopoulos, CalPERS Chief Investment Officer. Over half of our portfolio is in equities, so returns are largely driven by stock markets. But more than anything, the returns show the value of diversification and the importance of sticking to your long-term investment plan, despite outside circumstances. This is a challenging time to invest, but well continue to focus on our mission of managing the CalPERS investment portfolio in a cost-effective, transparent, and risk-aware manner in order to generate returns for our members and employers, Eliopoulos continued . For the second year in a row, international markets dampened CalPERS Global Equity returns. However, the program still managed to outperform its benchmark by 58 basis points, earning negative 3.38 percent. The Real Estate program generated a 7.06 percent return, underperforming its benchmark by 557 basis points. The primary drivers of relative underperformance were the non-core programs, including realized losses on the final disposition of legacy assets in the Opportunistic program . Its important to remember that CalPERS is a long-term investor, and our focus is the success and sustainability of our system over multiple generations, said Henry Jones, Chair of CalPERS Investment Committee. We will continue to examine the portfolio and our asset allocation, and will use the next Asset Liability Management process, starting in early 2017, to ensure that we are best positioned for the future market climate. Todays announcement includes asset class performance as follows (click on image): Returns for real estate, private equity and some components of the inflation assets reflect market values through March 31, 2016 . CalPERS 2015-16 Fiscal Year investment performance will be calculated based on audited figures and will be reflected in contribution levels for the State of California and school districts in Fiscal Year 2017-18, and for contracting cities, counties, and special districts in Fiscal Year 2018-19. The ending value of the CalPERS fund is based on several factors and not investment performance alone . Contributions made to CalPERS from employers and employees, monthly payments made to retirees, and the performance of its investments, among other factors, all influence the ending total value of the Fund . The Board has taken many steps to sustain the Fund as part of CalPERS Asset Liability Management Review Cycle (PDF) that takes a holistic and integrated view of our assets and liabilities. You can read more articles on CalPERSs fiscal 2015-2016 results here. CalPERSs comprehensive annual report for the fiscal year ending June 30, 2015 is not yet available but you can view last years fiscal year annual report here . I must admit I dont track US public pension funds as closely as Canadian ones but let me provide you with my insights on CalPERSs fiscal year results: First, the results arent that bad given that CalPERSs fiscal year ends at the end of June and global equity markets have been very volatile and weak. Ted Eliopoulos, CalPERSs CIO, is absolutely right: When 52 percent of your portfolio is achieving a negative 3.4 percent return, that certainly sets the main driver for the overall performance of the fund. In my last comment covering why bcIMC posted slightly negative returns during its fiscal 2016, I said the same thing, when 50 of the portfolio is in global equities which are getting clobbered during the fiscal year, its impossible to post solid gains (however, stocks did bounce back in Q2). Eliopoulos is also right, CalPERS and the entire pension community better prepare for lower returns and a lot more volatility ahead. Ive been warning about deflation and how it will roil pensions for a very long time. As far as investment assumptions, all US public pensions are delusional . Periode. CalPERS and everyone else needs to lower them to a much more realistic level. Forget 8 or 7, in a deflationary world, youll be lucky to deliver 5 or 6 annualized gains over the next ten years. CalPERS, the government of California and public sector unions need to all sit down and get real on investment assumptions or face the wrath of a brutal market which will force them to cut their investment assumptions or face insolvency. They should also introduce risk-sharing in their plans so that all stakeholders share the risks of the plan equally and spare California taxpayers the need to bail them out . What about hedge funds Did CalPERS make a huge mistake nuking its hedge fund program two years ago Absolutely not . That program wasnt run properly and the fees they were doling out for mediocre returns were insane. Besides, the party in hedge funds is over. Most pensions are rightly shifting their attention to infrastructure in order to meet their long dated liabilities. As far as portfolio returns, good old bonds and infrastructure saved them, both returning 9 during the fiscal year ending June 30, 2016. In a deflationary world, you better have enough bonds to absorb the shocks along the way. And I will tell you something else, I expect the Healthcare of Ontario Pension Plan and the Ontario Teachers Pension Plan to deliver solid returns this year because they both understand liability driven investments extremely well and allocate a good chunk into fixed income (HOOPP more than OTPP). I wasnt impressed with the returns in CalPERSs Real Estate portfolio or Private Equity portfolio ( Note: Returns in these asset classes are as of end of March and will end up being a bit better as equities bounced back in Q2). The former generated a 7.06 percent return, underperforming its benchmark by 557 basis points and suffered relative underperformance in the non-core programs, including realized losses on the final disposition of legacy assets in the Opportunistic program. CalPERS Private Equity program bested its benchmark by 253 basis points, earning 1.70 percent, but that tells me returns in this asset class are very weak and the benchmark they use to evaluate their PE program isnt good (they keep changing it to make it easier to beat it) . So Im a little surprised that CalPERS new CEO Marcie Frost is eyeing to boost private equity . In a nutshell, those are my thoughts on CalPERS fiscal 2015-16 results. Is CalPERS smearing lipstick on a pig No, the market gives them and everyone else what the market gives and unless theyre willing to take huge risks, they need to prepare for lower returns ahead.But CalPERS and its stakeholders also need to get real in terms of investment projections going forward and they better have this conversation sooner rather than later or risk facing the wrath of the bond market (remember, CalPERS is a mature plan with negative cash flows and as interest rates decline, their liabilities skyrocket). CalPERS latest annual report for 2015-2016 is now available here. I stand by remarks that CalPERS Private Equity program is delivering paltry returns, but the truth is these are treacherous times for private equity and there is gross misalignment of interests going on. Even Canadas mighty PE investors arent returning what they used to in this asset class despite having developed much better capabilities to co-invest with their general partners (GPs) in larger transactions to lower overall fees. Here is something else Yves and her academic friend dont understand about what exactly is going on at Canadas large pensions and large sovereign wealth funds in terms of direct investments in private equity. The bulk of direct investing at Canadas large pensions is in the form of co-investments after they invested billions in comingled funds where they pay 2 amp 20 in fees . not in the form of purely direct (independent) private equity investments where they source their deals on their own, invest in a private company and fix up its operations. I explained the key points on private equity at large Canadian pensions in this comment : Private equity is an important asset class, making up on average 12 of the total assets at Canadas large public pensions. All of Canadas large public pensions invest in private equity primarily through external funds which they pay big fees to and are then able to gain access to co-investment opportunities where they pay no fees. In order to gain access to these co-investments, Canadas large pensions need to hire professionals with the right skill set to analyze these deals in detail and have quick turnaround time when they are presented with opportunities to co-invest. Some of Canadas large public pensions, like Ontario Teachers and OMERS, engage in purely direct (independent) private equity deals where they actually source deals on their own and then try to improve the operational efficiency of that private company. Apart from paying no fees, the added advantage of this approach is that unlike PE funds who try to realize gains in three or four years, pensions have a much longer investment horizon on these investments (ten years) and can wait a long time before these companies turn around. However, the performance of these type of purely direct (independent) deals is mixed with some successes and plenty of failures . Also, we simply dont have independently verifiable information on how much is truly allocated in independent direct deals versus fund investments and co-investments, and how well these independent direct deals have done over the long run relative to fund investments and co-investments. The reality is that despite their long investment horizon, Canadas large public pensions will never be able to compete effectively with the large private equity titans who are way more plugged into the best deals all around the world . This is why CPPIB, Canadas largest pension, focuses purely on fund investments and co-investments all around the world in their private equity portfolio. They will never engage in independent direct deals like they do in infrastructure. Their philosophy, and I totally agree with them . is that they simply cannot compete on direct deals with premiere private equity funds and its not in the best interests of their beneficiaries . Under the new leadership of Andr Bourbonnais, PSP Investments is also moving in this direction, as Guthrie Stewarts private equity team sells any independent direct stakes to focus its attention solely on fund investments and co-investments to reduce overall fees (again, I agree with this approach in private equity). CPPIB and PSP will be the worlds top private equity investors for a very long time as they both have a lot of money coming in and they will be increasingly allocating to top credit (private debt) and private equity funds that can make profitable long-term private investments all over the world. Ontario Teachers, the Caisse, bcIMC, OMERS and other large Canadian pensions will also continue to figure prominently on this list of top global private equity investors for a long time but they will lag CPPIB and PSP because they are more mature pensions with less money coming in. Still, private equity will continue to be an important asset class at these pensions for a long time. Last week, at the CFA Montreal lunch with PSPs Andr Bourbonnais. PSPs CEO stated these key points on their private equity program: Real estate is an important asset class to protect against inflation and it generates solid cash flows but cap rates are at historic lows and valuations are very stretched. In this environment, PSP is selling some of their real estate assets (see below, my discussion with Neil Cunningham) but keeping their trophy assets for the long run because if you sell those, its highly unlikely you will be able to buy them back. Same thing in private equity, they are very disciplined, see more downside risks with private companies so they work closely with top private equity funds (partners) who know how to add operational value, not just financial engineering (leveraging a company us to then sell assets). PSP is increasingly focused on private debt as an asset class, playing catch-up to other large Canadian pension funds (like CPPIB where he worked for ten years prior to coming to PSP). Andr said there will be a lot of volatility in this space but he thinks PSP is well positioned to capitalize on it going forward. He gave an example of a 1 billion deal with Apollo to buy home security company ADT last February, a deal that was spearheaded by David Scudellari, Senior Vice President, Principal Debt and Credit Investments at PSP Investments and a key manager based in New York City (see a previous comment of mine on PSPs global expansion ). This deal has led to other deals and since then, they have deployed 3.5 billion in private debt already ( very quick ramp-up ). PSP also recently seeded a European credit platform. David Allen8216s AlbaCore Capital, which is just ramping up now. I am glad Miville asked Andr about these platforms in private debt and other asset classes because it was confusing to me. Basically, hiring a bunch of people to travel the world to find deals is operationally heavy and not wise. With these platforms, they are not exactly seeding a hedge fund or private equity fund in the traditional sense, they own 100 of the assets in these platforms . negotiate better fees but pump a lot of money in them, allowing these external investment managers to focus 100 of their time on investment performance, not marketing (the more I think about, this is a very smart approach). Still, in private equity, PSP invests with top funds and pays hefty fees (2 and 20 is very costly so you need to choose your partners well), however, they also do a lot of co-investments (where they pay no fees or marginal fees), lowering the overall fees they pay . Andr said private equity is very labor intensive which is why hes not comfortable with purely direct investments, owning 100 of a company (said its too many headaches) and prefers investing in top funds where they also co-invest alongside them on larger transactions to lower overall fees (I totally agree with this approach in private equity for all of Canadas mighty PE investors ). But he said to do a lot of co-investments to lower overall fees, you need to hire the right people who monitor external PE funds and can analyze co-investment deals quickly to see if they are worth investing in (sometimes theyre not). He gave the example of a 300 million investment with BC Partners which led to 700 million in co-investments, lowering the overall fees (that is fantastic and exactly the right approach) . The reality is CalPERS, CalSTRS and other large US pensions do not have people that can analyze these co-investment deals quickly to invest and lower fees. Why Because their compensation is low and they cannot attract the talent to do a lot more co-investments to lower overall fees and boost the performance of their private equity program.But there is no question that PSP and other large Canadian pensions still invest a huge chunk of their private equity assets with top funds where they pay big fees in comingled funds to gain access to larger co-investment opportunities. In fact, at the end of the lunch, Neil Cunningham, PSPs Senior Vice President, Global Head of Real Estate Investments, shared his with me: On private equity fees, he agreed with Andr Bourbonnais, PSP doesnt have negotiating power with top PE funds because lets say they raise a 14 billion fund and we take a 500 million slice and negotiate a 10 basis reduction on fees, thats not 10 basis points on 500 million, thats 10 basis points on 14 billion because everyone has a most favored nation (MFN) clause . so top private equity funds dont negotiate lower fees with any pension or sovereign wealth fund. They can just go to the next fund on their list. Whether you like it or not, in order to invest properly in private equity, and make big returns over any public market benchmark over the long run, you need to pay big fees to the private equity kingpins. But if youre smart like Canadas large pensions, you will tell them Ok boys, were going to invest a lot of money in your PE funds, pay the big fees like everyone else, but youd better give us great co-investment opportunities to lower our overall fees. Sounds easy but in order for CalPERS and other large US pensions to pursue this long-overdue idea, they need to get the governance and compensation right at their shops to attract qualified people to analyze co-investment opportunities quickly and diligently. And that isnt easy . Below, Maria Bartiromo interviews CalPERS CIO Ted Eliopoulos on Fox Business Networks Mornings with Maria. Listen carefully to what he says about what they can and cannot bring in-house. The Canada News Wire reports, Canadian pensioners not living as long as expected : New research finds longevity for Canadian pensioners is lower than anticipated 8211 which may actually be costing defined benefit (DB) plan sponsors. Canadian male pensioners are living about 1.5 years less than expected from age 65, according to the latest data from Club Vita Canada Inc. 8211 the first dedicated longevity analytics firm for Canadian pension plans and a subsidiary of Eckler Ltd. Female pensioners are living about half a year less than expected . Based on our data, some DB plans are overestimating how long their members are currently living and are therefore taking an overly conservative approach to funding their liabilities, explains Ian Edelist, CEO of Club Vita Canada. Correcting that overestimation could reduce actuarial reserves by as much as 6 8211 improving Canadian pension funds and their plan sponsors balance sheets just by using more accurate, granular and up-to-date longevity assumptions. The data comes from Club Vita Canadas first annual and highly successful longevity study completed in 2016 8211 one of the largest, most rigorous research studies on the impact of longevity on defined benefit pension and post-retirement health plans . The newly created VitaBank pool of longevity data (provided by Club Vita Canada members) spans a wide range of industries and geographic regions in both the public and private sectors. VitaBank is currently tracking more than 500,000 Canadian pensioners from over 40 pension plans. Unlike the most widely used study to set longevity expectations 8211 the Canadian Pensioners Mortality (CPM) study, which relies on data up to 2008 8211 VitaBank includes fully cleaned and validated data up to 2014 . The Club Vita Canada study brings to the Canadian pension market leading-edge modelling techniques already used by the insurance industry and in other countries. Club Vita U.K. recently released similar results, noting 16325 billion could be wiped off the collective U.K. DB deficit by using more accurate longevity assumptions. Naturally, the ultimate cost of a pension plan will be determined by how long its members actually live. But assumptions made today really do matter for such long-duration commitments, explains Douglas Anderson, founder of Club Vita in the U.K. Club Vitas data gives DB plan sponsors the tools they need to evaluate their willingness to maintain their longevity risk or offload that risk to insurers. Club Vita Canada Inc. was created by Eckler Ltd. It is an extension of Club Vita LLP, a longevity centre of excellence launched in the U.K. in 2008 by Hymans Robertson LLP. By pooling robust data from a wide range of pension plans, Club Vita provides its members with leading-edge longevity analytics helping them better measure and manage their retirement plan. Eckler is a leading consulting and actuarial firm with offices across Canada and the Caribbean. Owned and operated by active Principals, the company has earned a reputation for service continuity and high professional standards. Our select group of advisers offers excellence in a wide range of areas, including financial services, pensions, benefits, communication, investment management, pension administration, change management and technology. Eckler Ltd. is a founding member of Abelica Global 8211 an international alliance of independent actuarial and consulting firms operating in over 20 countries. I recently discussed life expectancy in Canada and the United States when I went over statistics on gender and other diversity in the workplace. noting this: Statistics are a funny thing, they can be used in all sorts of ways, to inform and disinform people by stretching the truth. Izinkan saya memberi contoh. Over the weekend, I went to Indigo bookstore to buy Michael Lewiss new book, The Undoing Project. and skim through other books. One of the books on the shelf that caught my attention was Daniel J. Levitins book, A Field Guide to Lies: Critical Thinking in the Information Age. Dr. Levitin is a professor of neuroscience at McGill Universitys Department of Psychology and he has written a very accessible and entertaining book on critical thinking, a subject that should be required reading for high school and university students. Anyways, there is a passage in the book where he discusses the often used statistic that the average life expectancy of people living in the 1850s was 38 years old for men and 40 years old for women, and now its 76 years old for men and 81 for women (these are the latest US statistics which show life expectancy declining for the first time since 1993. In Canada, the latest figures from 2009 show the life expectancy for men is 79 and for women 83, but bad habits are sure to impact these figures ). You read that statistic and whats the first thing that comes to your mind Wow, people didnt live long back then and now that we are all eating organic foods, exercising and have the benefits of modern medical science, we are living much longer. The problem is this is total and utter nonsense The reason why the life expectancy was much lower in 1850 was that children were dying a lot more often back then. In other words, the child mortality rate heavily skewed the statistics but according to Dr. Levitin, a man or woman reaching the age of 50 back then went on to live past 70. Yes, modern science has increased life expectancy somewhat but not nearly as much as we are led to believe. Here is another statistic that my close friend, a radiologist who sees all sorts of diseases told me: all men will get prostate cancer if they live long enough . He tells me a 70 year old man has a 70 chance of being diagnosed with prostate cancer, an 80 year old man has an 80 chance and a 90 year old man has a 90 chance. Scary stuff, right Not really because as my buddy tells me: The reason prostate cancer isnt a massive health concern is that it typically strikes older men and moves very, very slowly, so by the time men are diagnosed with it, chances are they will die from something else. Of course, the key word here is typically because if youre a 50 year old male with high PSA levels and are then diagnosed with prostate cancer after a biopsy confirms you have it, you need to undergo surgery as soon as possible because you might be one of the unlucky few with an aggressive form of the disease (luckily, it can be treated and cured if caught in time). So, much like the US, it seems the recent statistics on life expectancy in Canada are not that good. Again, you need to be very careful interpreting the data because the heroin epidemic has really skewed the numbers in both countries (much more in the US). But lets say the folks at Club Vita Canada and Eckler are doing their job well and Canadian pensioners are living less than previously thought. Does that mean that Canadian DB plans are overestimating their liabilities Yes and no. Go read an older comment of mine on whether longevity risk will doom pensions where I stated: I actually forwarded John Mauldins comment to my pension contacts yesterday to get some feedback. First, Bernard Dussault, Canadas former Chief Actuary, shared this with me: True, longevity is a scary risk, but not as much as most think, the reason being that the calculations of pension costs and liabilities in actuarial reports take into account future improvements in longevity . For example, as per the demographic assumptions of the latest (March 31, 2011) actuarial report on the federal public service superannuation plan (osfi-bsif.gc.caEngDocspssa2011.pdf ), the longevity at age 75 in 2011 is projected to gradually increase by about 1 year in 10 years (2021). For example, if longevity at age 75 was 12.5 in 2011, it is projected as per the PSSA actuarial report to be about 13.5 in 2021 This 1 year increase at age 75 over 10 years is much less than the average 1year increase at birth every 4 years over the 20th century reported by the Society of Actuaries (SOA). However, this is an appleorange comparison because longevity improvements are always larger at birth than at any later age and were much larger in the first half of the 20th century than thereafter than at any later age. Bernard added this in another email correspondence where he clarified the above statement: Annual longevity improvement rates are assumed to apply for the whole duration of the projection period under any of the periodical actuarial reports on the PSSA, i.e. for all current and future contributors and pensioners. Moreover, the federal public service superannuation plan is actuarially funded, which means that each generationcohort of contributors pays for the whole value of all of its accrued benefits. In other words, the financing of the plan is such that there is essentially no inter-generational transfer of pension debt from any cohort to the next . Second, Jim Keohane, President and CEO of the Healthcare of Ontario Pension Plan (HOOPP ), sent me his thoughts: I am not sure how longevity improvements will play out over the coming decades and neither does anyone else. I wouldnt dispute the facts being quoted in this article, but what I would point out is that these issues are not exclusive to DB plans. They are problems for anyone saving for retirement whether they are part of a DB plan a DC plan or not in any plan. DB plans get benchmarked against their ability to replace a portion of plan members pre-retirement income (typically 60). If you measured DC plans on the same basis they are in much worse shape, in fact, they only have about 20 to 25 of the assets needed to produce that level of income . I would also add that Canadian public sector pension plans are in much better shape than their U.S. Counterparts. We use realistic return assumptions and are in a much stronger funded position . Third, Jim Leech, the former CEO of Ontario Teachers Pension Plan (OTPP ) and co-author of The Third Rail. sent me this: Very consistent with my thoughtsobservations. It is a shame that short term motivations (masking reality by manipulating valuations, migration from DB to DC, elimination of workplace plans altogether, kicking the can down the road, etc) have taken over what is supposed to be a long horizon instrument (pension plan) . But Jim Keohane makes a good point - this applies ONLY to DB valuations . Anyone with DC (RRSP), ie. most Canadians, is really jiggered by longevity increases. No doubt about it, the Oracle of Ontario. HOOPP and other Canadian pensions use much more realistic return assumptions to discount their future liabilities. In fact, Neil Petroff, CIO at Ontario Teachers once told me bluntly: If U.S. public pensions were using our discount rate, theyd be insolvent. Mauldin raises issues Ive discussed extensively on my blog, including what if 8 is really 0. the pension rate-of-return fantasy. how useless investment consultants have hijacked U.S. pension funds, how longevity risk is adding to the pressures of corporate and public defined-benefit (DB) pensions. Mauldin isnt the first to sound the alarm and he wont be the last. Warren Buffetts dire warning on pensions fell largely on deaf ears as did Bridgewaters. I knew a long time ago that the pension crisis and jobs crisis were going to be the two main issues plaguing policymakers around the world. And Ive got some very bad news for you, when global deflation hits us. it will decimate pensions. Thats where I part ways with Mauldin because longevity risk, while important, is nothing compared to a substantial decline in real interest rates. Importantly, a decline in real rates, especially now when rates are at historic lows, is far more detrimental to pension deficits than people living longer . What else did Mauldin conveniently miss He ignores the brutal truth on DC pensions and misses how the inexorable shift to DC pensions will exacerbate inequality and pretty much condemn millions of Americans to more pension poverty. The important point is that last one, a decline in interest rates is far, far more damaging to pension liabilities than an increase in longevity risk. Last year, I wrote a comment on why ultra low rates are here to stay. and San Francisco Fed President John Williams penned a note today that pretty much agrees with me: The decline in the natural rate of interest, or r-star, over the past decade raises three important questions. First, is this low level for the real short-term interest rate unique to the U.S. economy Second, is the natural rate likely to remain low in the future And third, is this low level confined to 8220safe8221 assets In answer to these questions, evidence suggests that low r-star is a global phenomenon, is likely to be very persistent, and is not confined only to safe assets . So, if you ask me, I wouldnt read too much into this latest study stating Canadian pensioners are living less than previously thought and Canadian DB plans are overestimating their liabilities (persistent low rates persistent pension deficits). Worse still, the stakeholders of these DB plans might take this data and twist it to their advantage by asking to lower the contribution rate of their plans. This would be a grave mistake. Lastly, I want to bring something to your attention. Last week, after I wrote my comment on a lunch with PSPs Andr Bourbonnais. where I stated that the Chief Actuary of Canada is rightly looking into whether PSPs 4.1 real return target is too high, I received an email from Bernard Dussault, Canadas former Chief Actuary, stating he didnt agree with me or others that PSPs target rate of return needs to be lowered. Specifically, Bernard shared this with me: I still do not understand why suddenly investment experts (including Keith Ambachtsheer) think that the expectedassumed long term real rate of return will decrease compared to what it has been expectedassumed for so many years in the past. I look forward to Bourbonnais and the Chief Actuarys rationale if they were to reduce the 4.1 rate below 4.0. The rationale I used for the 4 I assumed for the CPP and the PSPP when I was the Chief Actuary is briefly described as follows in the 16th actuarial report on the CPP : The CPP Account is made of two components: the Operating Balance, which corresponds in size to the benefit payments expected over the next three months, and the Fund, which represents the excess of all CPP assets over the Operating Balance. In accordance with the new policy of investing the Fund in a diversified portfolio, the ultimate real interest rate assumed on future net cash flows to the Account is 3.8. This rate is a constant weighted average of the real unchanged rate of 1.5 assumed on the Operating Balance and of the real rate of 4 which replaces the rate of 2.5 assumed on the Fund in previous actuarial reports. The long term real rate of interest of 4 on the Fund was assumed taking into account the following factors: from 1966 to 1995, the average real yield on the Qubec Pension Plan (QPP) account, which has always been invested in a diversified portfolio, is close to 4 as reported in the Canadian Institute of Actuaries (CIA) annual report on Canadian Economic Statistics, the average real yield over the period of 25 years ending in 1996 on the funds of a sample of the largest private pension plans in Canada is close to 5, resulting from a nominal yield of about 11.0 reduced by the average increase of about 6 in the Consumer Price Index using historical results published by the CIA in the Report on Canadian Economic Statistics, the real average yield over the 50-year (43 in the case of mortgages) period ending in 1994 is 4.03 in respect of an hypothetical portfolio invested equally in each of the following five areas: conventional mortgages, long term federal bonds (Government of Canada bonds with a term to maturity of at least 20 years), Government of Canada 91-day Treasury Bills, domestic equities (Canadian common stocks) and non8209domestic equities (U.S. common stocks). The assumed real rate of 4 retained for the Fund is therefore deemed realistic but erring on the safe side, especially considering that: replacing federal bonds by provincial bonds in this model portfolio would increase the average yield to the extent that provincial bonds carry a higher return than federal bonds and the 3-month Treasury Bills, which bear lower returns, would normally be invested for the Operating Balance rather than the Fund. From a larger perspective, assuming a real yield of 4 on the CPP Fund means that the CPP Investment Board would be expected to achieve investment returns comparable to those of the QPP and of large private pension plans.On the other hand, I think I heard Bourbonnais saying last year at a presentation of the PSP annual report to the Public Service Pension advisory Committee (and I could well have misheard or misinterpreted what he said) that he was reducing the proportion of equities in the PSP fund in order to reduce the volatilityfluctuation of the returns. If he is really doing this, then that would be a valid reason for reducing the expected 4.1 return . Besides, if he is doing this, I opine that this is not consistent with the PSP objective to maximize returns. Indeed, a more risky investment portfolio carries higher volatility though BUT it is coupled with a higher long term average return (which both the CPP and the PSP funds have achieved on average over at least the last 15 years). As I explained to Bernard, PSP Investments and other large Canadian pensions are indeed reducing their proportion in public equities precisely because in a historically low rate environment, the returns on public equities will be lower and more importantly, the volatility will be much higher . I also told him that given my long-term forecast of global deflation, I think more and more US and Canadian pensions should lower their target rate and that the contribution rates should rise. Of course, someone may claim the only reason PSP and others want to lower their actuarial target rate of return is because it lowers their bar to attain their bogey and collect millions in compensation. Im not that cynical, I think there are legitimate reasons to review this target rate of return and I look forward to seeing the Chief Actuarys report to understand his logic and why he thinks it needs to be lowered. I would also warn all of you to take GMOs 7-year asset class return projections with a shaker of salt (click on image below): GMO may be right but I never bought into this nonsense and Im not about to begin now. I guarantee you seven years from now, they will be way off once more Below, Goldman isnt buying into 2017s bull market hype. They must be reading my comments but remember what I told you last Friday when I went over top funds Q4 activity. the real risk in these markets is another melt-up, even if its a slow, insidious one, to shake all those shorts out and force portfolio managers underperforming their index to chase returns by buying risk assets at higher valuations. Thats when the real fun begins but dont worry, were not there yet. About This Blog Contact Information This blog was created to share my unique insights on pensions and investments. The success of the blog is due to the high volume of readers and excellent insights shared by senior pension fund managers and other experts. Institutional and retail investors are kindly requested to support my efforts by donating or subscribing via PayPal below. to get latest updates, even during the day, click on the image of the big piggy bank at the top of the blog. For all inquiries, please c ontact me at LKolivakisgmail. I am an independent senior economist and pension and investment analyst with years of experience working on the buy and sell-side. I have researched and invested in traditional and alternative asset classes at two of the largest public pension funds in Canada, the Caisse de dpt et placement du Qubec (Caisse) and the Public Sector Pension Investment Board (PSP Investments). Ive also consulted the Treasury Board Secretariat of Canada on the governance of the Federal Public Service Pension Plan (2007) and been invited to speak at the Standing Committee on Finance (2009) and the Senate Standing Committee on Banking, Commerce and Trade (2010) to discuss Canadas pension system. You can follow my blog posts on your Bloomberg terminal and track me on Twitter (PensionPulse) where I post many links to pension and investment articles as well as my market thoughts and other articles of interest. Thank You Id like to thank all of you who support this blog, I truly appreciate it. Institutional investors can subscribe using one of the three options below (contact me for details). Anyone else can contribute any amount at any time through the donate button (a tip). Please take the time to show your financial support for the work that goes into this blog. Thank you Institutional Subscription (CAD) Scrolling This Blog As you scroll down the right-hand side, you will first see links to pension news, a guide to the basics, my blog archive, popular posts and comprehensive links to Canadian and global funds, government organizations, institutional organizations, advisors and vendors, broker dealers amp investment banks, documents to pension plan governance, assets and liabilities, links to conferences, geopolitical news, market and industry research and my blog roll. All links are listed in alphabetical order. Ive also included links to worthy charities and resources to fight Multiple Sclerosis. Readers can subscribe to my posts entering their email at the top of the right hand side. They can also search my blog using any key word in the custom search at the top of the page. Finally, take the time to read my disclaimer at the bottom and always remember there is no free lunch on Wall Street. Always be skeptical of everything you read, including comments from yours truly Pension News Disclaimer Pension Pulse is a collection of my thoughts pertaining to issues on pension funds and financial markets. The information and opinions contained on this site are merely guidelines. This site does not guarantee any monetary claims by following these recommendations. This website is not liable for any loss that you incur due to these programs, nor do we ask for any monetary gains from your success of using these recommendations. We also do not guarantee the results of any products or recommendations listed on this site. You must do your own due diligence before investing in any product. COPYRIGHT LEO KOLIVAKIS 169 2008-2017
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