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02 December 2008
Government in crisis talks with credit insurers
The government has launched a series of crisis talks with the country’s leading credit insurers, the Financial Times has learnt, as concern mounts about the security of companies’ supply chains. Executives from the credit insurance industry met officials from the Department of Business, Enterprise and Regulatory Reform last Friday to discuss a way to keep supply lines moving as credit lines dry up. Credit insurers provide cover for suppliers against the risk of the businesses they supply going bust and not being able to pay their bills.

02 December 2008
Insolvency practitioners failing to report pension schemes
Over 200 insolvency practitioners have been reported to their professional bodies for failing to advise the Pension Protection Fund (PPF) and The Pension Regulator about pension schemes of insolvent companies. Alexander Forbes Trustee Services has warned that some insolvency practitioners may be putting their professional reputation at serious risk. As the economic downturn is forcing more businesses into insolvency, this problem is expected to get much worse.
Alexander Forbes Trustee Services

02 December 2008
Market turmoil sees 50 pc growth in traded life policies, says report
Investment in traded life policies by retail and institutional investors has risen by more than 50 per cent over the last year as a result of recent market turmoil, according to a report from the Bristol Business School. The Market for Traded Life Policies report notes that the combined assets of the five largest funds distributed in the UK grew from £271.7m on November 1 2007 to £416.7m in 12 months. It estimates that retail investment into these funds rose from £67.9m to £104.1m or 53 per cent.
Bristol Business School

30 November 2008
Securitised TLPs ‘risky for investors’
The increasing trend for pools of traded life policies to be securitised is likely to yield enhanced profits for banks but reduce returns for investors, according to an academic report to be released today. In recent years a series of open-ended funds investing in TLPs – the second-hand life assurance policies of elderly and dying Americans – have been established, typically generating annual returns of 8-10 per cent. However, Merlin Stone, professor of marketing at the UK’s Bristol Business School, has argued the trend for US and European banks to securitise parcels of TLPs, rather than hold them in open-ended funds, “is fraught with risks for unwitting institutional investors”.
Bristol Business School

27 November 2008
Fund managers only get half of their decisions right
Fund managers typically get 50 per cent of their decisions right and even 'good' managers only have 'hit rates' of 51 per cent, new research has revealed. The study by Inalytics, a specialist firm that assists pension funds with the selection and monitoring of equity managers, examined 215 long only portfolios, with a combined market value of $152bn, to investigate the number of correct decisions managers make as a percentage of the total number of decisions - their hit rates - and compare the alpha generated from good decisions to the alpha lost from poor decisions - their win:loss ratio. Overall, six correct decisions out of 10 constitutes solid performance. However, the study found the average hit rate was 49.6 per cent – no better than 50:50.
Inalytics

26 November 2008
A growing problem
While the opportunity for environmental ‘returns’ has been seized by some of the more sophisticated pension funds, few funds are paying attention to the increasing environmental ‘risk’ present in all portfolios.

26 November 2008
More than 1.6m left in financial difficulties after stock market-based pensions dive in value
Hundreds of thousands of workers misled into ditching generous final salary pensions by rogue salesmen are now facing up to hardship in retirement. More than 1.6million people were mis-sold stock market-based pensions between 1988 and 1994. More than £10billion has been paid out in compensation. But many are now discovering that the compensation was woefully inadequate and their pensions will be thousands of pounds lower than expected. This was because compensation payments were based on a strict formula imposed by the regulators, which assumed the money invested would grow faster than it has done.

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