Five consecutive days leading into March were the most volatile on record for UK final salary pension schemes since accounting standards were changed in 2001, reflecting the risks associated with funding dependence on investment markets.
While the net asset values (NAVs) of private equity funds have been spared the steep declines taken by major indexes, the reporting lags inherent in private equity fund valuations should unveil double-digit losses for the first half of 2009.
A number of Ivy League universities – including Yale, Cornell and the University of Pennsylvania (Penn) – are directly feeling the affects of the negative performance of their endowment funds, and are being forced to cut operating budgets for the 2009/10 financial year.
Despite recent investment losses, sovereign wealth funds (SWFs) collectively grew by 18 per cent in 2008, bringing the sum of assets held by the vehicles to US$3.9 trillion, a report from International Financial Services London (IFSL) found.
Randy Cohen from Harvard Business School, Christopher Polk from the London School of Economics, and Bernhard Silli from the Universitat Pompeu Fabra and the London School of Economics, provide powerful evidence that mutual fund managers can pick stocks that outperform the market.
Chief investment officer of the US$81 billion Teacher Retirement System of Texas, Britt Harris, has offered to forego an estimated $167,935 in performance incentive pay for 2008. At the most recent board meeting, the TRS board accepted Harris’ offer and also voted to defer all remaining investment division performance pay until the fund experiences a year of positive returns. In 2008 the fund experienced a 27 per cent drop in market value.