ABP breaks ranks with peers in accepting high private equity fees

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first_imgThe larger pension funds in the Netherlands have come under pressure from the public to rein in costs for investments in non-listed companies, while the high bonuses received by private equity managers have also drawn fire.PFZW, the €166bn pension fund for the healthcare sector, and its asset manager PGGM have made clear their aim to cut private equity fees at all costs.PGGM has even established a 15-strong private equity team for this purpose.Last year, ABP paid more than €500m in bonuses to private equity managers.Erik van Houwelingen, a board member at ABP, conceded that the issue of bonuses was “difficult” for the pension fund as well.“But, as long the fees are linked to pension-enhancing performance, I can justify these costs,” he told the FD. Over the course of 2014, ABP’s 5.1% private equity allocation returned 23.3%.Over the last 10 years, the asset class has returned 14.9% on average for the scheme, while equity has returned 7.3% on average. Van Gelderen stressed that APG was not thinking to manage private equity investments on its own, “as this would require expertise we don’t have”.He added, however, that the asset manager took pains to reduce private equity costs through manager selection and co-investments.In other news, ABP has divested from Netherlands-based Mylan after engagement with the pharmaceutical company – over the use of Rocuronium Bromide for capital punishment in the US – proved “unsuccessful”. Van Houwelingen said Mylan refused to take steps to prevent its muscle relaxant from being used in executions.In a statement, Mylan said its products were meant to be used “in compliance with approved labelling and applicable care standards”.It said it did not directly supply the drug to prisons and that it had “no knowledge of its use for lethal injections”.The Dutch Ministry of Foreign Affairs, however, said it had shown Mylan pictures – obtained by UK human rights organisation Reprieve – from the Virginia Department of Corrections showing that the department was stocking the disputed drug.The US state still carries out the death penalty. ABP, the €356bn pension fund for Dutch civil servants, has broken ranks with other large pension funds in the Netherlands after suggesting it has accepted the relatively high fees associated with private equity. Eduard van Gelderen, CIO at ABP asset manager APG, said the pension fund had resigned itself to paying higher fees for exposure to the asset class.“A small number of successful private equity managers are in a position to demand high fees,” he told Dutch financial news daily Het Financieele Dagblad (FD).“If we don’t pay those fees, they don’t invest our assets. So, either we must fully withdraw from the asset class – and miss out on the returns as a consequence – or we must accept the cost level.”last_img read more

Euro 2020: Madrid Officials Blast Bale’s Wales Celebrations

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first_img​Real Madrid officials have labeled Gareth Bale’s Euro 2020 qualification celebrations as ‘a joke in very bad taste’ after the Welshman held aloft a flag which ranked the Spanish club as less important than Wales and golf.Bale overcame recent injury issues to help his nation secure a 2-0 victory over Hungary on Tuesday evening, and he and his teammates were pictured with a banner that read ‘Wales. Golf. Madrid. In that order,’ referring to comments made regarding the 30-year-old’s priorities.Former Madrid star Predrag Mijatovic recently raised concerns over Bale’s lack of commitment to los Merengues, and his words were the catalyst for a new chant amongst Wales fans, which in turn inspired the controversial banner. The ​ex-Tottenham Hotspur star’s actions made the front page of Spanish newspapers, and a source within Madrid described the banner as a ‘joke in very bad taste’ and it has sparked ‘anger, but also indifference’ from club officials, as reported by ​ESPN .Sources suggest that some of ​Bale’s teammates found the banner amusing, but they are worried about the fans’ reaction upon his return from international duty.There has been a lot of friction between ​Madrid supporters and the Welshman in recent years, and Tuesday’s actions will only put more strain on their already fractured relationship.Bale has not featured for his club since October, but he managed to put in key performances in both international fixtures for his country during the break.Los Blancos’ coach Zinedine Zidane was very open in his desire to sell the ​ex-Southampton man over the summer, but a move never materialised and Bale worked his way back into los Merengues’ side.Bale recently admitted that ​he prefers playing for his country rather than the Spanish giants, and his passion shone through on Tuesday evening, as the forward assisted the opening goal to take Wales to Euro 2020.The Dragons went into their crunch match with Hungary knowing that they had to win to qualify for the summer tournament, and a brace from ​ex-Arsenal man ​Aaron Ramsey carried Ryan Giggs’ men to a deserved victory.Share this:FacebookRedditTwitterPrintPinterestEmailWhatsAppSkypeLinkedInTumblrPocketTelegram Gareth Bale (centre) and his teammates celebrating Wales’ qualification for Euro 2020 on Tuesday nightlast_img read more