BERLIN - German Finance Minister Hans Eichel announced the government will abandon its proposal to double the taxation of capital gains on foreign-domiciled trusts. The reversal was a major victory for the coalition of money managers aligned against the proposal, which was introduced last year as part of a wider tax reform package (Pensions & Investments, Feb. 3). Mr. Eichel's speech also paved the way for the introduction of hedge funds into Germany and freeing up of restrictions preventing banks from offering asset-backed securities to investors.
"It's good news to see the end of this discriminatory (proposed) law," said a spokesman for Fidelity Investments in Frankfurt, which is the largest foreign manager of mutual funds in Germany, with $6 billion in assets in assets under management, and a member of the managers' coalition.
Strathclyde re-ups Northern Trust
GLASGOW - Strathclyde Pension Fund re-appointed Northern Trust as global custodian. It also hired Northern Trust to provide performance measurement, replacing the WM Co., which was terminated, a spokeswoman at the £5.2 billion ($8.3 billion) scheme confirmed. The spokeswoman said the custodial and performance measurement roles were both put out for bid last year, as required by EU regulations.
McCain Foods taps Attica to run scheme
NORTH YORKSHIRE, England - The McCain Foods Ltd. Pension & Life Assurance Scheme hired Attica Asset Management to run the scheme's entire £50 million ($80 million) in a balanced multimanager portfolio, according to Geoff Dent, McCain Food's financial director.
Singer & Friedlander Investment Management and Insight Investments, each of which ran half the assets in a balanced portfolio, were terminated, he said. "Our selection was the result of a detailed review process in which we considered both traditional balanced management and the multimanager concept," Mr. Dent said.
Rolls-Royce looks to unions for deficit help
LONDON - Rolls-Royce PLC, London, faces a £1.1 billion ($1.7 billion) deficit for its £4 billion pension plan, and company officials began talks with unions and staff for help in reducing the firm's pensions exposure. Among the options being discussed are increasing staff contributions and cutting back benefits, including a reduction in early retirement.
Ontario Hospitals renews State Street Corp. contract
TORONTO - The Ontario Hospitals Pension Plan renewed its contract with State Street Corp. to provide global and domestic custody, accounting, securities lending and foreign exchange services, according to Linda Wooding, spokeswoman for the C$16 billion (US$10.7 billion) fund. There was no competitive bidding for the contract, she said.
Kingfisher hires Morley to handle real estate mandate
LONDON - Kingfisher PLC pension scheme, London, hired Morley Funds Management to manage £90 million ($142 million) in real estate, a company spokesman confirmed. Colin Hately, pensions manager at the £990 million scheme, was unavailable for comment by press time, and the spokesman would not provide further details.
Watson Wyatt Worldwide advised.
Caisse, Ontario Teachers report negative returns
Caisse de Depot et Placement du Quebec, Montreal, announced it returned -9.57% in 2002. The fund had total assets of C$77.68 billion (US$53.3 billion) in assets as of Dec. 31. Losses from investment operations for 2002 totaled C$8.55 billion. "The financial markets were in turmoil for the third straight year ... Such a situation had not occurred since the stock market crash of 1929," Henri-Paul Rousseau, Caisse chairman and CEO, said in a statement. "Most of the (negative) return for 2002 ... is due to the deplorable situation on the markets."
Separately, Ontario Teachers' Pension Plan, Toronto, announced it returned -2% for 2002, 2.8 percentage points above the plan's custom benchmark of -4.8%, according to a news release from the fund. At year-end 2002, net assets were C$66.2 billion, down from C$69.5 billion in 2001. "Inflation-sensitive and fixed-income investments, representing over half the fund, performed very well for us this year, at 13.2% and 8.6%, respectively," Claude Lamoureux, president and CEO, said in a statement. "However, stock market returns were a different story, as they continued their negative course for the second year in Canada and the third consecutive year in the U.S.- the worst performance since 1932."