Two of the UK’s Environment Agency Pension Fund’s top executives will take on leadership roles at the newly created combined investment company for 10 local government pension schemes (LGPS).Dawn Turner has been appointed chief executive officer of BPP Ltd, which will oversee the investment of £27.5bn (€31bn) pension assets of the funds, and Mark Mansley has been appointed its chief investment officer (CIO).Turner has been chief pensions officer at the Environment Agency Pension Fund (EAPF), a recognised leader in responsible investment, for four years, and has been the interim managing director for the Brunel Pension Partnership (BPP).Mansley has worked alongside Turner as CIO at the EAPF, which he joined in 2011. Laura Chappell has been appointed chief compliance officer and risk officer of BPP Ltd, and Joe Webster joins as chief operations officer.Chappell was most recently head of risk for a large wealth manager in London, and has also worked in risk and compliance at Barclays Global Investors (now BlackRock) and Schroders.Webster joins from Deutsche Bank, where he was global finance director for equity trading.Denise Le Gal, independent chair of BPP, hailed the appointments as a “milestone” in the long term development of the partnership.“The formation of the company and the recruitment of the key personnel marks the start of the final stage in the BPP funds’ journey to pooling assets,” Le Gal said. “We look forward to working together as one team to build a better future for our clients.”The three non-executive directors are Steve Tyson, Frédérique Pierre-Pierre, and Mike Clark. Their appointments were announced last month.The EAPF is one of the 10 founding members of BPP, which is one of the eight national ‘pools’ that have been created following a government push for increased investment scale and improved efficiency within the LGPS.It said it is reviewing its future business and staff requirements as part of the fund’s transition to BPP Ltd. In the interim, Faith Ward, the EAPF’s chief responsible investment and risk officer, will lead on investment matters and Craig Martin will continue as acting chief pensions officer.The other funds in the BPP collaboration are the pension funds for Avon, Buckinghamshire, Cornwall, Devon, Dorset, Gloucestershire, Oxfordshire, Somerset, and Wiltshire.BPP Ltd was formally created yesterday in Bristol when each of the founding funds signed the shareholder agreement to establish the company.The partnership will soon announce the appointment of its selected administrator and custodian.
Dutch pension funds lack clear policies for their investments in residential mortgages, according to regulator De Nederlandsche Bank (DNB).A survey of mortgage portfolios and risk management by the regulator suggested schemes usually adopted the policies of their providers. Instead, schemes should develop their own policies, including targets and limitations, DNB said.Currently there is no link between a scheme’s asset-liability management study and its investment beliefs, the regulator said. It added that pension funds often did not provide clarity about their risk attitude towards illiquid investments either. Residential mortgages as an asset class has gained in popularity during the past few years, as mortgages are considered a better-performing alternative to low-yielding government bonds.Dutch pension funds have invested 2.4% of their portfolio in residential mortgages on average, with some schemes having exposures of as much as 20% of their portfolios, according to DNB.The regulator said that it wanted pension funds to develop their own policy,In its opinion, schemes’ policies should also include the proportion of state-guaranteed mortgages (NHG) in their portfolio, the desired duration of the allocation and the types of mortgages owned.The watchdog also emphasised that pension funds must establish the risk and return criteria for mortgage investments and subsequently opt for a matching product, rather than the other way round.DNB added that pension funds must explain how their mortgage holdings fit with their policy on hedging liabilities.It found that many schemes had fully factored in mortgages into their interest rate hedging policy. Others had merely modestly underpinned this decision, in particular in case of a high debt-market value ratio of the portfolio.The supervisor also said pension funds should explain how they had valued their mortgage holdings, and how they assessed the risk of mortgages paid off early.It warned that just using mortgage providers’ quote could improperly affect the valuation of the holdings.During its survey, the regulator also assessed the outsourcing of asset management and visited a number of undisclosed providers of mortgage investments.