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About Bob Collie

Fiduciary Matters blog

Insights for institutional investors

October 29, 2014By

It’s a great sign for markets when investors—like CalPERS and Motorola—think for themselves

In recent weeks, CalPERS and Motorola have both made headlines in the investment press for taking significant steps in their investment programs. Motorola are paying $3.1bn to Prudential to buy pension annuities, moving both assets and liabilities off of their corporate balance sheet; the third biggest such annuity buy-out ever in the U.S., trumped only by GM and Verizon’s 2012 mega-deals . Meanwhile, CalPERS are pulling the plug on a $4 billion hedge funds program. Neither action was driven by a desire to follow the herd: indeed, both actions involve significant “maverick risk”, the extra risk that comes from being different.

Categories: Category: General
By October 22, 2014

October’s volatile markets hit pension plan funding

2014 has not been a strong year so far for corporate pension plan funding, with a large part of 2013’s gains given back: our representative plan hit 88% funded at the end of 2013, but ended September at 84.2%.

By October 15, 2014

IRS segment rates and funding choices for plan sponsors

While the details of recent changes to IRS segment rates for pension plan funding are complicated, their impact is not: corporations will be allowed to put less money into their defined benefit pension plans for the next few years if they choose.

Categories: Category: Defined benefit strategy
By October 7, 2014

The most useful lessons from behavioral finance books are not about market behavior, they are about you

Behavioral finance should be a part of every investor’s education. Understanding how widespread are traits such as overconfidence, hindsight bias, and frame dependence is helpful if we are to avoid their traps.

Categories: Category: General
By September 25, 2014

Motorola’s pension buyout reminds us that risk transfer is “when” not “if”

Motorola recently announced the largest pension risk transfer transaction since 2012, and the third-largest ever, trumped only by GM’s and Verizon’s blockbuster deals. It’s unlikely to be the last big deal of the year.

Categories: Category: Defined benefit strategy
By September 24, 2014

Active share’s popularity is growing, but there are pitfalls

Over the past five years, active share has become a popular way to gauge just how active an equity manager is in running a portfolio. It’s a useful measure, but it has its pitfalls.

Categories: Category: Equities
By September 17, 2014

Whatever happened to globalization?

We’ve been hearing for years about the closer integration of the world’s economies and markets. Companies operate seamlessly across borders; location of headquarters and stock listing are increasingly matters of choice; investors think globally. Yet some features of individual markets remain. Last week, James Barber (Russell’s Chief Investment Officer – Equities) was presenting to the

Categories: Category: Equities