POR : DENNIS FALVY

Roberto, el profesional principal de mi equipo y amigo de toda la vida, se ha vuelto adicto a los artículos que salen en las extraordinarias revistas y diarios especializados del exterior y me pasa esta introducción que ha elaborado él. Señala que en un sesudo análisis que viene efectuando de modo sistémico el Financial Times; se viene revisando el andar de los Fondos de Pensiones y la crisis que los embarga; que no se crea es exclusivo del Perú y Chile; pero que nuestros analistas sólo atinan a ver como la defensa de un sistema creado por los chilenos según dicen hace 35 años y que aquí se emuló como AFP. Para mostrar que andan perdidos y que el tema es bastante más complejo, Roberto me adjunta cómo es nuestra costumbre y en su idioma original tres artículos. El primero de Leo Lewis sobre el gigantesco GPIF (Government Pension Investment Fund) del Japón que registra una pérdida de US$52 billones sólo en el trimestre abril a junio de este año; mucho más que el total del fondo de AFPs peruanas y es muy semejante a la pérdida de US$50 billones registradas en el ejercicio 2015 – 2016, la mayor desde la crisis del 2008. Sólo para ilustrar el GPIF tiene un monto de US$1.3 trillones, seis veces el PBI peruano para los macro búhos. Las causas de semejante pérdida trimestral según el presidente del GPIF es doble, de un lado el BREXIT con la consecuencia de una pronunciada disparidad cambiaria entre el dólar y el yen japonés ausente de direccionalidad y de otro lado, las cifras de bajo empleo de USA en el mes de mayo. Como sea, este no es el único fondo lastimado. El segundo artículo de Mary Childs y John Authers está relacionad al Fondo de Pensiones de la ciudad de Filadelfia con 72 billones de dólares, el que descontento con el resultado de los llamados fondos de cobertura (hedge funds) busca ahora asignar sus recursos hacia fondos que manejan acciones de empresas no listadas en bolsa (llamadas private equity), más riesgosas, pero de mejor rendimiento. En todo caso es interesante apreciar que aquí también las autoridades federales se abocan al tema de las elevadas y no siempre debidamente justificadas comisiones por manejo de fondos como acontece con nuestras AFPs. El tercer y último artículo de John Authers está referido a un tema al que venimos haciendo referencia constantemente en el asunto de fondos de pensiones y es el del rediseño del modelo de negocios que debe reposar en el cliente: el pensionista futuro. El autor habla de un “overhaul” (mantenimiento a nuevo) del sistema pensionario y se lanza por la alternativa de colocar los fondos a muy largo plazo incluyendo infraestructura al estilo de los fondos canadienses, ya que la pensión futura no requiere tanta disponibilidad inmediata de fondos como se asume al invertir en fondos mutuos. La lectura de los tres artículos bien vale una buena reflexión. No estamos solos en el tema pensionario. Y ninguna mega comisión de seudo expertos y políticos locales; amén de algunos chilenos invitados o infiltrados va a solucionar este asunto. Mucho menos los directa o indirectamente vinculados a las AFP. Buen poblema que se le avecina a Lord Thorne le dije a Roberto, pues este pata super naive, me da la impresión que de este tema no sabe mucho. Me da asimismo la duda de que haya operado mucho en el mercado de valores y tal vez se haya olvidado o jamás ha aprendido los intríngulis del sistema previsional que tiene que enfrentar temas multivariables y además todo lo que representa en costos para la salud, el alargamiento de la esperanza de vida, tema que ni se toca en el Perú. En rigor un doctorado te prepara para ser investigador o profesor. No para una gerencia competitiva. En todo caso, aquí los artículos seleccionados por Roberto, que vale la pena leerlos en su idioma original, pues las traducciones del Internet a los mismos y si hiciéramos un esfuerzo para hacerlo nosotros, de seguro perderían la fuerza que le dan este tipo de autores y periodistas especializados de excelencia.

JAPAN’S GOVERNMENT PENSION FUND HIT BY $52BN QUARTERLY LOSS

Japan’s GPIF blames Brexit vote and US jobs data for tumble in stocks

International investments hand Japan’s GPIF $52bn loss in Q1 By: Leo Lewis in Tokyo

The world’s largest pension fund has said the UK’s surprise vote in late June to leave the EU was partially to blame for a $52bn quarterly investment loss.

The massive paper losses suffered by Japan’s Government Pension Investment Fund in the April to June quarter of 2016 almost matched the $50bn losses it recorded in the 2015-16 financial year — its worst year since the global financial crisis.

Norihiro Takahashi, the president of GPIF, said markets during the quarter to the end of June had seen the dollar-yen exchange rate “developing without a clear sense of direction”.

He said two main factors produced especially high market volatility in June that strengthened the yen and caused stocks to tumble.

“The results of the UK’s referendum turned out to be different from what the market expected. And US unemployment data in May was much worse than forecast,” he said in a statement.

The result of the UK vote was announced on June 24, less than a week before the end of the quarter, leading to a sharp rise in the yen that hit the value of GPIF’s overseas holdings.

GPIF said its investment losses for the three months to June 30 were 3.88 per cent — a drop that took the total value of the fund below ¥130tn ($1.3tn). The drop, which followed a 3.52 per cent quarterly investment loss between January and March 31 this year, represented the group’s first back-to-back quarterly loss since 2008.

The losses in the quarter effectively wiped out all the gains that the GPIF has made since it revised its investment strategy in October 2014 to place a heavier weighting on equities.

The surging yen, whose rate against the dollar is correlated with the Japanese stock market, produced a 7 per cent plunge in the Topix index on the session immediately after the June 23 referendum results emerged.

The UK's vote to leave the EU led to a sharp rise in the yen, which hit the value of GPIF’s overseas holdings

Mr Takahashi sought to head off a public backlash over the most recent results, saying: “Even if market prices fluctuate in the short term, it will not harm the pension beneficiaries … we invest from a long-term viewpoint.”

GPIF’s move into equities, which was controversial in a society where individuals are not themselves heavily invested in the stock market, was touted as a key strut of the “Abenomics” revival programme.

Under its new weightings as it has shifted out of domestic bonds, GPIF now holds about 21 per cent of its investments in domestic equities, the same proportion in foreign equities and 39 per cent in domestic bonds. It intends to continue with its plan to increase allocations of domestic and foreign equities to 25 per cent apiece of the overall portfolio.

Efforts by the administration of Prime Minister Shinzo Abe to rid Japan of deflation and establish sustainable economic growth have included broad efforts to convince households to convert part of their massive bank savings into investment.

EL FRACASO DE LOS FONDOS DE COBERTURA Y LA RIESGOSA MOVIDA DE LOS FONDOS DE PENSIONES HACIA LAS ACCIONES FUERA DE BOLSA

Pensions’ shift into private equity ignores risks

Doubts are being raised over whether buyout funds can still deliver strong returns

The crumbling assumptions of US public pension plans

The City of Philadelphia pension fund is looking to increase its private equity allocation as many US funds reduce their investments in hedge funds 8 HOURS AGO by: Mary Childs and John Authers

The US’s big public pension plans have lost their faith. When New Jersey’s $72bn plan cut its investments in hedge funds by half earlier this month it was the latest significant fund to head for the exit from an industry that had built its reputation by employing the smartest people to deliver the best returns.

Disappointment over performance and hefty fees from hedge funds have stirred anger, prompting Letitia James, the public advocate for New York City, to call for managers to “sell their summer homes and jets” in April, as the city divested from hedge funds.

However, the ire of pension funds does not extend to all the alternative investments that they have pushed into in the quest for juicier returns.

New Jersey left its $7bn private equity portfolio untouched, with one member of its investment council even suggesting some of the allocation taken from hedge funds should be handed to private equity.

“We’ve seen redemptions from the hedge fund industry at levels this year we haven’t seen since the financial crisis,” says Peter Laurelli at research group eVestment. Investors are adding the most to private equity, he adds.

Unlike hedge funds, whose average performance has been disappointing since the financial crisis, private equity remains one of the best-performing asset classes for pension schemes.

This year’s decline in bond yields is the latest challenge for public pension funds, whose ability to keep their promises to retirees is being challenged by lengthening life expectancy. And as pressure grows on pensions to diversify away from low-yielding bonds and equities — their two traditional bedrocks — private equity is considered a big part of the answer.

The City of Philadelphia’s $4.4bn scheme, for example, plans to beef up its allocation. The average US public pension has 7 per cent of its assets invested in private equity, still lower than its peers’ average target of 8.3 per cent, according to research provider Preqin. Pensions make up a quarter of all private-equity capital in North America.

Even for investors with long time horizons, such as pension funds, resisting the assumption that current performance of respective asset classes will last is hard. Right now, that is putting hedge funds on the back foot against their private equity rivals.

Of investors surveyed by Preqin at the start of the year, 94 per cent said their private equity portfolios had met or exceeded their expectations in the previous 12 months. Most, in turn, expect private equity to generate returns north of 10 or 12 per cent.

The pension and private equity industries have been acquainted since the 1980s, with pioneers such as Henry Kravis, co-founder of KKR, looking to attract retirement savings from the early days. But as the poor performance of hedge funds forces pension funds to reassess which alternative investments to pursue, there is concern that the private equity industry will find fatter returns harder to come by.

More than 4,000 private equity companies are battling to buy out companies, with competition growing from sovereign wealth funds and even Canadian pension funds.

Leon Black, chairman of private equity firm Apollo, and Bill Conway, a co-founder of The Carlyle Group, have both lamented the competition driving valuations too high.

For almost all the vintage years for the private equity industry before 2006, the median private equity buyout fund beat public equity markets, but returns have since proven harder to find, according to the study “How Do Private Equity Investments Perform Compared to Public Equity?” which was published in June.

But pensions “continue to be lulled into thinking that these investments will provide strong returns”, according to the study for the Center for Economic and Policy Research.

“Despite poor performance and excessive fees, pension funds and other investors continue to pour money into private equity funds.”

If private equity holds the upper hand now in the fight for retirees’ savings, the industry is drawing more scrutiny from pension fund trustees.

Many are rethinking how they track fees they pay to private equity, which are less transparent than for hedge funds.

California-based Calpers, the largest public pension fund in the US, admitted last year it could not track the fees it was paying and had to ask its private equity managers for the information.

It revealed in November it had paid $3.4bn in incentive fees for $24.2bn of net gains between 1990 and last year, prompting Californian politicians to try to mandate disclosure of fees

and expenses before a public fund can invest in alternative assets such as private equity.

Regulators are also taking a keener interest in fees levied by private equity, hitting Blackstone, KKR and Apollo with fines of more than $120m since June last year.

The US Securities and Exchange Commission found “violations of law or material weaknesses in controls” in the collection of fees and allocation of expenses at more than half of the 112 private equity managers it inspected.

What is more, private equity is helped by how funds measure performance over time. The starting gun for gauging an “internal rate of return” in private equity only starts when the investment idea has been found and funds are then put to use.

By contrast, hedge funds are always on the clock. This gives private equity a much more generous timeframe over which to make the investments work.

“I would say that the economics of private equity will never be as great as it was 20 years ago,” cautioned David Rubenstein, another co-founder of The Carlyle Group, last December. But with deficits growing, pension funds are not, for now, paying that much attention.

Y ESTE ESTUPENDO ARTICULO SOBRE DISEÑO DE LOS SISTEMAS DE PENSIONES

Pensions pain: disaster is avoidable

Overhauling the design of pension plans and saving more are critical to healthy retirements

By : John Authers

The crumbling assumptions of US public pension plans

The crisis is on a vast scale but there is time both to save more for our old age and to look at the mechanisms of the pensions industry

If we have done our job properly, you should by now be scared out of your wits. The FT has spent the last week examining a serious problem for all of us — that lower bond yields mean higher strain for pensions.

(The reason, for those who have not been reading, is that lower yields make it more expensive to buy a guaranteed stream of income from bonds. Thus companies and governments who have promised their employees a fixed pension, or so-called “defined benefit” plans, face a growing shortfall which must somehow be filled. And it means savers in modern “defined contribution” plans, who have no guarantees and have mostly failed to save enough so far, risk an impoverished old age).

The scale of the problem is dizzying. It is exacerbated by the fact that future returns on US stocks, the world’s most popular asset class, are likely to be weaker because they are so expensive. And yet they look cheaper than bonds.

Now, it is incumbent on me to come up with some solutions. As this is the long view, I will concentrate on defined contribution plans. In the short term, many employers face a serious problem plugging pension deficits. But most of us face a tougher future where the risks of retirement financing will lie squarely with us, and not with our employers.

First, the problem is partly caused by the good news that we are living and maintaining our health for longer. It is not the worst hardship to expect to work a few years longer than our parents did. That increases our nest egg and reduces the time over which it has to be spread.

Second, compound interest is our friend. Small increases in the amount we save make a difference when compounded over a working lifetime. So we need to save more.

Third, the underlying driver of low yields is low inflation. If (big if) this continues, then our savings will hold their value more than they used to do.

Fourth, there is the matter of how we save. We need to get more bang for our buck. That means cutting down on fees wherever possible. It also means timing the market sensibly. It is never a good idea to take the risk of being out of the stock market altogether (even during the 2008 disaster this would have risked missing the dramatic bounce back in the spring of 2009). But it does make sense, within bands, to maximise allocations to investments that look cheap (as emerging markets do now), and minimise allocations to those that look expensive (such as US stocks).

It also requires exploiting pension plans’ greatest advantage; that they have time on their side. Globally, there is a need for better infrastructure, and a lack of funds from straitened governments to pay for it.

The most successful public defined benefits pensions — such as those in Canada — hold infrastructure. They are pools of patient capital to aid public investment. Defined contribution plans do not. The reason for this brings us to the most important point — the design of DC plans needs to be rethought, totally.

DB plans were well designed for a world of shorter life expectancy, high yields, high returns and long careers spent with the same company. They are now obsolete. But DC plans in many countries are not plans at all — they are a tax incentive to buy mutual funds. They have some of mutual funds’ advantages that a pension fund does not need — like the ability to buy, sell or switch between funds at any time — but lack advantages that pension funds should enjoy, such as the ability to buy illiquid assets.

This must be fixed. There is no reason why young investors’ long-term savings should not go into funding infrastructure, or clean energy, or other beneficial investments for the future. The funds to do this will be less liquid than a mutual fund, and that does not matter.

A second critical issue, beyond investing and accumulating assets, is to manage the “decumulation” phase, when savers start drawing their income. That can no longer be about buying bonds, thanks to low yields. It will have, increasingly, to be about selling stocks and other long-term investments. The plans need to be structured so that savers have clear guidance on how much of their fund it is safe to draw down each year. A large statement on retirement with a “target” or “maximum” annual withdrawal might be a good idea (as would earlier strong guidance, or even compulsion, towards saving more).

The recent British reform to allow savers to take more of a lump sum at retirement is a confident and irresponsible step in exactly the wrong direction.

One final point. Reading the mass of feedback we have received, it grows clear that the issue of pensions divides us, particularly along generational lines. Many view it in moral terms. This is all wrong. We are all in this together, whether we are generationally lucky or not. We can wait for a social disaster of widespread poverty for the elderly — or we can adapt, design a new system for a new economy, and treat a long-lived, low-inflation world as a blessing.