TORONTO Canadian pension plans are expected to boost their U.S. and international equity allocations over the next two years in response to the governments 2005 lifting of caps on foreign investment, according to a survey by MFC Global Investment Management. Out of 148 fund officials interviewed earlier this year, 53% said they expect to alter their Canadian equity allocations, and nearly one-third intend to increase their international equity exposure. While 18% of respondents plan to increase their U.S. equity allocations, 13% expect to reduce them. Also, more than 25% said they will reduce Canadian fixed-income allocations in favor of U.S. fixed income. Canadian pension plans have an average 56% of assets in equities, 41% in fixed income and 3% in real estate and other alternative investments.
ATP Private Equity losing a partner
COPENHAGEN Jens Bisgaard-Frantzen, managing director, is leaving ATP Private Equity Partners to start a new alternative asset investment firm, according to a statement from the 22.3 billion Danish kroner ($4 billion) firm.
ATP Private Equity is the fund-of-funds arm of the 340 billion kroner ATP pension fund, Hilleroed, Denmark. Mr. Bisgaard-Frantzen has been managing partner since its inception six years ago.
Partners Torben Vangstrup, Susanne Forsingdal and Klaus Ruhne will take over Mr. Bisgaard-Frantzens responsibilities.
U.K. equity managers underperform in 2006
LONDON Active managers of U.K. pension fund assets failed to beat their benchmarks in most asset classes in 2006, but performance looked better on a rolling three-year basis, according to a report by Mellon Analytical Solutions.
The 2006 median return for active U.K. equity managers was 16.5%, compared with 16.8% for the FTSE All-Share index, according to the report, which analyzed 1,850 actively managed portfolios from 488 U.K. pension funds with a combined £207 billion ($405 billion) in assets. The median return for overseas equities was 5.9%, compared with 6.2% for the FTSE All-World ex-U.K. index; U.K. bonds returned a median 0.5%, compared with 0.7% for the FTSE Actuaries All Stocks Gilt index; and real estate returned a median 19.6% compared with 20% for the CAPS Property index. Active cash management, at 4.7%, and overseas bonds, at -7.0%, outperformed their benchmarks the CAPS Cash index and the JPMorgan Global (ex-U.K.) Traded index by 0.1 and 0.5 percentage points, respectively.
However, active U.K. equity managers beat their benchmarks in six out of the last 10 rolling three-year periods. In the three-year period ended Dec. 31, 56% of the active U.K. equity managers beat their benchmarks; 41% of active global equities managers outperformed their benchmarks; and 69% of the active fixed-income managers topped their, according to the report.
Ontario Teachers returns 13.2% in 2006
TORONTO Ontario Teachers Pension Plan, Toronto, ended 2006 with a 13.2% return on its investments, beating its composite benchmark by 3.8 percentage points, said spokeswoman Deborah Allan. The fund had C$106.1 billion (US$91.7 billion) in assets as of Dec. 31, up from C$96.1 billion a year earlier. The funds five-year rate of return was 11.9%, compared with 8.1% for the composite benchmark. The funds asset allocation at year end was 46% equities, 34% inflation-sensitive (including commodities, real estate, real-return bonds and infrastructure and timber) and 20% fixed income.