Andreas Csurda, chairman of the association of Vorsorgekassen, confirmed to IPE that Vorsorgekassen had “expressed interest in supporting finance affordable housing” and that this project had been included in the government agreement.He said he expected the plan to “move forward soon” but added that infrastructure was not part of the negotiations.“But, of course, infrastructure projects could be included,” he said.However, Csurda warned that the performance of these government-guaranteed infrastructure or housing investment products must be at least 3.5-4%.“The return must be above that of Austrian bonds,” he said. “Otherwise, we could invest directly in those.”Claudio Gligo – head of asset management at Victoria Volksbanken, both for the Pensionskasse as well as the Vorsorgekasse – said: “There is already a certain hype regarding infrastructure, and it is paramount that there be a sufficient return.”He argued that this was not the case with certain solar power plants in Germany, for example.Further, Vorsorgekassen must be able to include these long-term investments in their held-to-maturity portfolios, and the maximum lending limit against them should be 60%, Csurda said.Once these criteria are met, as much as 15% of the assets in the severance-pay funds could be earmarked for infrastructure or housing investments, he said.Markus Zeilinger, managing director at fair-finance, which runs the newest Vorsorgekasse, confirmed that his fund would “like to invest in certain infrastructure projects, nursing homes or student housing in the region”.But he said this would be highly unlikely without changes to Austrian legislation, as loan and credit investment were “practically impossible” under the current regulatory framework.Christian Böhm, managing director at APK, which runs a Pensionskasse and a Vorsorgekasse, warned that infrastructure contained “diverse risks”, including equity or bond-like risks – or, indeed, risks similar to real estate, as well as project risks, especially in clean energy.“And risk identification is important,” he said.He also pointed out that it would be difficult under EU regulations to limit such infrastructure investments with state guarantees to Austrian institutions alone.Böhm added that bonds of state-linked entities such as the federal railways ÖBB or the motorway operator Asfinag already offered infrastructure exposure with a form of state guarantee. Austria’s Vorsorgekassen, which manage mandatory severance-pay contributions, could help “fill the gap” left by banks withdrawing from infrastructure financing due to stricter capital requirements under Basel III, according to Heinz Behacker, managing director at the VBV Vorsorgekasse.Speaking at a recent panel discussion, he called on the Austrian government to provide infrastructure investment opportunities for long-term investors such as severance-pay funds with state guarantees.“Also, the legal framework would have to be changed, and the return must be sufficient,” Behacker added.He pointed out that Austria’s 10 severance pay funds, which now manage €6.2bn in combined assets, are reporting inflows of €30-35m per month, which “needs to be invested”.
The average coverage ratio of Dutch pension funds has increased by 1 percentage point in May, according to estimates from Aon Hewitt and Mercer. Aon Hewitt calculated a full percentage point increase to 110%, while Mercer placed the increase at approximately 0.7 percentage points to 111.1% at May-end.Aon Hewitt attributed the improvement chiefly to the strength of equity and bond returns at Dutch schemes.The company said Dutch funds’ average assets grew by 2.9%, mainly due to an average 2.1% return on their bonds portfolios. The value of equity holdings increased by 3.9%, while the other asset classes also generated positive returns, according to the consultancy.It noted that pension funds’ liabilities had increased by approximately 1.7% in May as a result of falling interest rates, which also negatively affected the three-month average rate.Pension funds must discount the value of liabilities against the three-month average of the market rate under application of the ultimate forward rate (UFR).Dennis van Ek, principal and actuary at Mercer, underlined that pension funds with a relatively large hedge of the interest risk on their liabilities – and also having a large equity portfolio – performed best in terms of funding last month.He warned that the official coverage ratio would fall by approximately 2.5 percentage points if the market rate were to remain at the same level over the next three months.According to Van Ek, the average funding based on the market rate virtually remained unchanged at almost 105% in May.In other news, SPW, the €8.8bn pension fund for housing corporations, saw its funding ratio increase by 2.2 percentage points to 116.2% over the first quarter, on the back of a 5% overall return.The quarterly result included 2.8 percentage points of return from interest swaps, as well as a loss of 0.1% on its currency hedge.Private equity and government bonds returned 5.6% and 4%, respectively, with credit returning 2.5%.The pension fund further reported returns of 2.2% and -0.7%, respectively, on developed and emerging market equities.Returns on property (3%), hedge funds (1.3%) and infrastructure (2%) were positive, whereas the scheme lost 1.5% on its opportunities portfolio.
Capital Group – The asset manager has opened an office in Amsterdam, while appointing Martin Hofman as country marketing manager for the Benelux and Nordic regions. Hofman joins from Columbia Threadneedle Investments, where he began as regional marketing manager for the Benelux and Nordics regions in 2008. Redington, Ashburton Investments, Cardano, Capital Group, Columbia Threadneedle InvestmentsRedington – Mitesh Sheth has been appointed chief executive, effective 5 April, at the UK-based investment consultancy. Sheth, currently Redington’s director of strategy, joined in 2013. Before then, he was head of fixed income at Henderson Global Investors and has also held roles at Watson Wyatt (now Willis Towers Watson) and Aon Consulting (now Aon Hewitt). Since Redington’s launch in 2006, co-founders Robert Gardner and Dawid Konotey-Ahulu have held the combined roles of client consultants and co-chief executives.Ashburton Investments – Jonathan Schiessl has been promoted to CIO within the international investment team. Schiessl joined Ashburton in 2000 and was previously head of equities before taking on his new role. Meanwhile, Derry Pickford and Marianna Georgakopoulou have been appointed joint heads of the Ashburton Investments asset-allocation team in London. Pickford has been at the company for a number of years, leading its macro analysis, while Georgakopoulou joined last year as multi-asset strategist from Pivot Capital Management in Monaco.Cardano – Ralph Frank has been appointed to lead Cardano’s work on defined contribution (DC) pensions. Frank spent four years at the fiduciary manager before establishing Charlton Frank, where he focused on DC design. He has also held senior leadership positions at Mercer and Alexander Forbes in South Africa.
Pædagogernes Pensionskasse (PBU), Denmark’s DKK55bn (€7.4bn) pension fund for education practitioners, has named Sune Schackenfeldt as chief executive, succeeding long-time leader Leif Brask-Rasmussen.In conjunction with the leadership change, the fund’s chairman said PBU was in the best shape to be able to create new link-ups with other labour-market pension funds.Schackenfeldt is a director at Denmark’s biggest commercial pension provider PFA Pension.He will begin his role as the executive head of PBU on 1 August, following Brask-Rasmussen’s retirement. Claus Omann Jensen, chairman at PBU and mayor of the Danish municipality of Randers, said: “We have been completely satisfied with the journey PBU has been on with Leif as captain.”He said Schackenfeldt was a worthy successor.“He is very well regarded in the pensions world and has proved he can deliver results,” Omann Jensen said.“Now he is coming to PBU, which is already a very well-run pension fund, and this is the best starting point to be able to create new cooperative relationships with other labour-market pension funds.”He said Schackenfeld would focus on, among other things, the fact many education practitioners change their pension schemes each year when they change jobs, even though they remain in the same line of work.The professional term ‘pædagog’ in Danish (education practitioner) describes staff who are specifically trained for work in nurseries, kindergartens, after-school clubs and day and residential institutions.PBU has already said it aims to begin talks with other pension funds and stakeholders possibly leading to the creation of the same pension for all those in the profession.PBU’s deputy chairman, and the treasurer of trade union BUPL, Lasse Bjerg Jørgensen, described the pension fund as a “streamlined and effective scheme with market-rate pensions, which generated good results for its members”.“I am convinced Sune is the right one to head up bringing about a new and visionary business model at PBU,” he said.Before joining PFA Pension, Schackenfeldt was head consultant at PA Consulting Group.
Oslo Pensjonsforsikring – Unni Hongseth and Gro Løken have joined the supervisory board of Oslo Pensjonsforsiking (OPF), having been voted in at the firm’s annual general meeting last month. Meanwhile, Hilde Kjeldsberg and Oluf Ulseth have left the board. The association of Oslo municipal employees (Kommuneansattes hovedsammenslutning – Oslo), which is the largest employee association to be covered by the pension scheme, named Roger Dehlin as its new trustee board member, replacing Mari Sanden.Standard Life Aberdeen – The asset management giant, due to be created from the merger of Standard Life and Aberdeen Asset Management, has announced Barry O’Dwyer as the head of its pensions business. Following the merger, O’Dwyer will be chief executive officer for pensions and savings, a role he currently holds at Standard Life. The announcement was made in documents published this week outlining the merger. Among the other positions confirmed in the documents was that of Rod Paris, CIO at Standard Life, who will take the same role at the new firm.Rijn- en Binnenvaart – Conchita Mulder has started as chair of the supervisory board of the €850m sector scheme for inland shipping (Rijn- en Binnenvaart). She succeeded Rudi Nieuwenhuizen, who served as chairmain since 1 July 2014. Her appointment is for a four-year term. Mulder is also a trustee at the civil service scheme ABP, as well as the €9.1bn pension fund of telecoms provider KPN.Capita – Paul Trickett has been named as independent chair of Capita’s Atlas Master Trust investment committee. He holds a number of non-executive positions, including chair of Legal & General’s (L&G) master trust, chair of Railpen’s investment arm, and chair of insurance company Zurich’s staff pension scheme. In addition, Greg Mills has joined from L&G as head of engagement, and John Harris has moved from Now:Pensions to become business development manager for Atlas.Aon Hewitt – The consultancy giant has hired Sonia Gogna to its fiduciary management team, to work with larger pension schemes. She joins from State Street Global Advisors (SSGA) where she was a senior investment strategist in the multi-asset business. She has also worked for Willis Towers Watson, specialising in asset-liability modelling and risk budgeting.Separately, Lennox Hartman, global head of fixed income manager research at Aon Hewitt, is to join liability-driven investment specialist Insight Investment later this year, a spokesperson for Insight confirmed. He will join the firm’s consultant relations team. State Street Global Advisors – The asset management arm of SSGA has rehired Dave Ireland, appointing him as its new global head of defined contribution (DC). He joins from Wellington Management, the $1trn US-based asset management firm, where he was director of DC distribution. He previously spent 13 years at SSGA in various portfolio management and distribution roles.Lombard Odier Investment Managers – The asset management arm of Swiss bank Lombard Odier has hired Jonathan Clenshaw as head of institutional sales for Europe, a newly created position. He will join the firm on 1 July and will work from Lombard Odier Investment Managers’ London office. Clenshaw joins from Deutsche Bank Asset Management after a 20-year career. Most recently he was head of UK and Ireland distribution and head of Europe, Middle East, and Africa insurance.Now:Pensions – John Rowland has replaced Bo Foged as non-executive director on the board of Now:Pensions, the UK DC pensions provider. He was formerly chief information officer at AXA Investment Managers, and held several senior operations roles at Invesco. Foged is chief financial officer at ATP, the Danish pensions giant and Now:Pensions’ parent company.PineBridge Investments – The $80bn investment manager has hired Alain Meyer as head of Switzerland and Austria. He will oversee the opening of a new Zurich office later this year. He joins from Aviva Investors, where he was head of institutional sales in Germany, Austria, and Switzerland.Syntrus Achmea – Syntrus Achmea Real Estate & Finance (SAREF) has appointed Hugo van Dijk as business development manager. He will be tasked with the acquisition of real estate and mortgage mandates. He joins from Deutsche Asset Management. Prior to this, he worked at Zwitserleven and Theodoor Gilissen Bankiers. At SAREF, Van Dijk is to succeed Morella Hessels, who has left the company.Russell Investments – The group has appointed Julian Brown to its UK consultant relations team as a director. He was previously head of UK consultant relations at BlackRock. He has also worked at consultancy firm JLT, and as an investment officer for Nottinghamshire’s pension fund.Aviva Investors – Louise Kay has been appointed to the UK asset manager’s executive team. She joined Aviva Investors in 2015 as global head of client solutions. The now nine-person executive team includes CEO Euan Munro, global real estate chief executive Edward Casal, and Mark Versey, CIO for global investment solutions. ISDA, APG, OPF, Standard Life Aberdeen, Rijn- en Binnenvaart, Capita, Aon Hewitt, SSGA, Insight Investment, Lombard Odier, Now:Pensions, PineBridge, Syntrus Achmea, Russell, BlackRock, Aviva InvestorsISDA – The International Swaps and Derivatives Association has appointed Thijs Aaten to its board of directors. Aaten is managing director of treasury and trading at the €443bn Dutch asset manager APG – which runs investments for the civil service scheme ABP – since 2010. He set up APG’s treasury centre, which acts as a central dealing desk and internal counterparty.Aaten is also an external adviser to the €27bn ING Pensioenfonds, as well as a member of the investment committee of the €6.5bn sector scheme for painters and decorators (Schilders). He is the first senior executive on the ISDA board with relevant expertise in the pensions sector, and his appointment marks the trade body’s ongoing initiative to expand the scope of its board, ISDA said.The association also appointed as directors Sian Hurrell (head of fixed income, currencies and commodities in Europe for RBC Capital Markets), Tom Wipf (vice chairman of international securities at Morgan Stanley), Rana Yared (managing director, strategic investments team at Goldman Sachs).
Fed and ECB officials are banking on the fact that they have announced QE reductions well in advance. They have indicated their intention to reduce by incremental amounts dependent on economic and financial conditions as necessary. They hope that, unlike the 2013 ‘taper tantrum’, the effects will be inconsequential.Ascertaining whether QE has been a successful experiment is not easy. As Reinhart says, it is extremely hard to separate how much QE matters because of portfolio effects, and how much it matters because of the signal. If a central bank buys bonds it is telling the world it will keep rates low for a very long time.The signal is more usually important, except for markets such as mortgage-backed securities, in which QE purchases matter for the Fed because it is buying so much of the new flow production. What is clear is that central bank purchases have impacted secondary market liquidity in a detrimental manner.Where QE has had a very pernicious impact is its contribution to the rising inequality we are seeing in Europe and the US. Arguably, this has led to the rise of populist parties in Europe and the election of Donald Trump in the US.This is an unfortunate fact of central banking, admits Reinhart. Because central banks have to work with financial markets to provide policy accommodation, they have to make the wealthy wealthier. Pushing rates lower creates capital gains and supports the equity markets.In the US, equity holdings are very concentrated. It is clear that in terms of both wealth equality and income equality, unconventional policy has worsened the trend of rising inequality in developed nations.Clearly, there are also lots of other things going on, such as globalisation and the pattern of technological progress. However, the political populism that we have seen rising throughout Europe and the US may be an unwanted side effect of QE – to an extent that academics will likely argue over for years.Reverting to a more ‘normal’ (and less confrontational) political environment may prove to be one of the most difficult outcomes of QE to reverse. The idea of independent central banks conducting monetary policy by experiment may also have shown its limitations. The argument that Reinhart puts forward is that, when a central bank intervenes in markets at a time of crisis, it’s a big player. A crisis by definition is a withdrawal of capital from trading: people are risk averse, they are uncertain, they don’t have a strong conviction about where the crisis is heading for.Essentially the central bank is leaning against an open door. As markets improve, people get more confident and capital comes back. There is more incipient trading and arbitrage across markets, and the central banks have less of an effect. Presumably central banks don’t start unwinding those policies until they are confident that markets have healed completely – and therefore the unwinding should have even less effect. About a dozen years ago, Vincent Reinhart, chief economist at Standish Mellon, wrote a couple of papers with former US Federal Reserve chairman Ben Bernanke on unconventional monetary policy.Unfortunately, he tells me, they neglected to put two sections: On risks to the policy, and how to exit the policy. Reinhart now regrets that.The European Central Bank (ECB) has signalled its intention to gradually withdraw its version of the unconventional monetary policy of quantitative easing (QE) – but it is still not clear when it will disappear completely.The hope is that the impact of what has been dubbed ‘quantitative tightening’ will not be a mirror image of quantitative easing. The effect on markets should be asymmetric. The basic argument, at least from the US perspective, is that QE operations have had less and less of an effect on market as each phase was introduced.
The UK’s pension fund association has warned its members that climate change poses severe risks to their investments.In partnership with environmental law charity ClientEarth, the Pensions and Lifetime Savings Association (PLSA) has produced guidance for pension funds to act on climate change.It recommended that funds carry out a programme of measures to mitigate risks and take advantage of opportunities relating to climate change, including incorporating climate change expertise into trustee boards and other governance bodies and instructing asset managers to engage with investee companies with regard to their plans to mitigate and adapt to climate change.Luke Hildyard, PLSA policy lead for stewardship and corporate governance, said: “Climate change is not just an ethical issue for pension fund governance bodies, but a major threat to financial stability highlighted by numerous credible economic commentators and rigorous research. “It is therefore imperative that boards and committees consider the potential impact that climate change will have on their investment portfolios.” ClientEarth has been engaged in a multi-pronged campaign on climate change. It has put pressures on companies, the UK audit and reporting watchdog, and pension funds themselves.Earlier this year it supported a campaign calling on trustees to engage with asset managers about voting against the remuneration policies of oil and gas companies, outlining potential liability if they did not take action.Responsible investment NGO Preventable Surprises this week called for more forceful stewardship from shareholders of utility companies as the largest source of greenhouse gas emissions in the US. They were key to reducing emmissions in line with the Paris Agreement, it said. The think tank called out BlackRock and Vanguard for their voting activity at nine US utilities targeted by shareholders for increased climate risk disclosure.Southern European shareholders co-ordinateA new network for shareholder engagement has been launched today in Milan by a group of mainly southern European institutional investors.Austria’s fair-finance Vorsorgekasse, shortlisted for an IPE 2017 country award, is one of the founding members of Shareholders for Change (SFC).The other six founding members are Bank für Kirche und Caritas (Germany); Ecofi Investissements, Groupe Crédit Coopératif (France); Etica Sgr, Gruppo Banca Etica (Italy); Fondazione Finanza Etica (FFE, Italy); Fundacion Fiare (Spain), and Meeschaert Asset Management (France).Together they have more than €22bn of assets under management.The network’s goal is to organise joint participation in European AGMs, co-sign letters to companies, submit resolutions, organise meetings with corporations and discuss new engagement activities, according to Andrea Baranes, president of Fondazione Finanza Etica, which coordinated the launch of SFC.UK government to keep up impact, green investing momentum The UK government has confirmed its support for developing social impact investing and green finance in the UK.It set out its intentions in a report on its updated long-term strategy for the UK asset management industry, which was released today. It said it would respond later this month to a Law Commission report on social and impact investments.In June the Law Commission said it found no legal or regulatory barriers to pension schemes making social and impact investments provided they were in the best interests of scheme members.
Interested parties should apply by 22 June 2018, stating performance data to 31 December 2017, gross of fees. The selected manager will have a track record of at least two years.Separately, an Asian institutional investor has turned to IPE Quest to place a $10m global trade finance mandate.According to search QN-2444, the Asian firm is seeking an active manager with at least $1bn of existing assets under management.The manager should ideally have a track record of at least three years, and must submit performance data to 31 March 2018 net of fees. Other factors that will determine the eventual award of the mandate will be considerations of top-down and/or bottom-up strategies; research capabilities; staffing; and the location of the portfolio managers.Applicants must apply by 25 June 2018.The IPE news team is unable to answer any further questions about IPE Quest, Discovery, or Innovation tender notices to protect the interests of clients conducting the search. To obtain information directly from IPE Quest, please contact Jayna Vishram on +44 (0) 20 3465 9330 or email email@example.com. Two pension funds are seeking to place mandates through IPE Quest.According to search QN-2452, a Danish investor is searching for a single manager for a $300m (€255m) hard currency emerging market debt mandate.The selected manager must run an actively managed strategy, and all investment styles are acceptable. However, no leverage is permitted on the mandate – and, according to the Danish pension fund, blended products are “not of interest”.The manager must be willing to set up a segregated account and be able to outperform the JP Morgan EMBI Global Diversified DKK-hedged index .
However, some political parties have indicated that they do not want to force pensions on self-employed workers.Van As added that the scheme would also target employers to join BpfBouw’s voluntary pension plan for workers with salaries of over €60,000.However, the director emphasised that BpfBouw didn’t want to position itself as a “magnet scheme”, as most large sector-related pension funds had already merged into it.“And the remaining candidates joining, including the scheme for the wood-trading industry, would be difficult because of differences in coverage ratio as well as pension arrangements,” he added. BpfBouw, the €56bn Dutch pension fund for the country’s building industry, wants to boost its membership by attracting self-employed workers as soon as the Netherlands’ new pension model is agreed.In the scheme’s annual report for 2017, David van As, the scheme’s director, said that the pension fund aimed to attract tens of thousands of self-employed workers – known in the Netherlands as zzp’ers.The Dutch government and pensions industry have been debating how to provide retirement savings options for zzp’ers for some time.The country’s unions, including the largest, FNV, have demanded that pension provision for this group of workers is included in the new pension framework currently being discussed. BpfBouw wants to build up its membership by appealing to self-employed “zzp’ers”Currency hedge aids 6.6% investment return Meanwhile, the building sector scheme attributed one-third of its 6.6% annual result to its currency hedging strategy.In its annual report, BpfBouw said that its full hedge of the currency risks on its exposure to government bonds and hedge funds – as well as an 80% cover of the main currencies in its securities portfolio – had generated 3.4%.It had subsequently decided to reduce its dollar hedge from 64% to 61%.In contrast, it lost 1.2% on its interest rate hedge for its liabilities following interest rate rises, which had led to a decision to raise the interest rate cover from 40% to 45%.Last year, BpfBouw extended its stake in green bonds from €298m to €662m and decided to increase its holdings of care-related property from €24m at 2015-end to €500m by 2020. It also said that it wanted to have 12,000 solar panels installed on its real estate by then.The building scheme also credited the performance of its equity holdings for its return, with an overall result from equity of 10.9%. Emerging markets generated 22.9%, while property delivered 10%.BpfBouw’s infrastructure holdings yielded 4.7% as a reult of a positive revaluation of several projects.In contrast, the pension fund lost 0.9% on its 42% fixed income portfolio, despite gains from government bonds (0.8%) and inflation-linked bonds (1.4%). Credit and emerging market debt lost 2.9% and 1.1%, respectively.Hedge funds (-7.6%), opportunities, including copyrights (-11.7%) and commodities (-5.9%) also ended up in the red.In the annual report, the scheme’s board also lamented growing pressure from new legislation and the increasing amount of work it had to deal with from regulators.Because of increasing European regulation, the board said it feared an “unnecessary stacking of supervision and monitoring”.BpfBouw reported administration costs of €100 per participant and asset management costs of 0.62%, adding that it had spent more than 0.14% on transactions.At year-end, the building scheme had 775,600 participants in total, of whom 139,130 were active members and 249,060 were pensioners.At March-end, funding of BpfBouw stood at 116.7%, the best funding ratio of the Netherlands’ top five biggest schemes.
Sustainable investing is a low priority issue for most institutional investors, according to a survey by Schroders.The UK-listed asset manager polled 650 investors around the world running $24trn (€20.6trn) and found that, although they expected sustainable investing to become a bigger issue in the next few years, it was not currently a high priority for most.Almost a third (32%) of those questioned by Schroders said that how sustainable an investment was had “little to no influence” on the decision to buy.Factors such as a manager’s track record, expected return and risk tolerance were all more important factors, investors said. Roughly three quarters (74%) of respondents said sustainable investment would become more important in the next five years. Last year 67% of investors agreed with this. Almost half of investors have increased their allocations to related investments in the past five years. Source: SchrodersHowever, larger investors tended to place more emphasis on long-term sustainability issues, Schroders reported, with 32% of those with a holding period of at least five years stating that sustainability was “a significant influence”. For investors with a 3-5 year horizon, less than a quarter (23%) prioritised sustainability.The asset manager also found that those placing a higher importance on sustainability were more confident about achieving there target returns: more than half (59%) were “at least reasonably confident” of hitting their targets.Jessica Ground, global head of stewardship at Schroders, said: “There remains a gulf between institutional investors’ sustainable investment aspirations and the reality of how they prioritise these factors in their investment decision-making. Investors clearly recognise that investing sustainably is going to be more and more important going forward, but this approach is yet to sit at the heart of their investment process.”Consultancy rolls out new ESG processInvestment consultant group Willis Towers Watson has teamed up with index provider MSCI to develop a new environmental, social and corporate governance (ESG) strategy for its client base. The Adaptive Capped ESG Universal index was designed to incorporate “a broad range of ESG factors” for use by equity investors, Willis Towers Watson said. Clients have already invested more than £500m (€556.1m) in the strategy.The index has exposure to developed and emerging markets and places more emphasis on companies with “strong and improving” ESG scores, as calculated by MSCI’s own metrics. Only a small number of companies would be excluded, the consultancy said, meaning investors could still engage proactively with companies.Nikko broadens green bonds strategy Nikko Asset Management has added assets issued by sovereigns, supranational groups and agencies to its green bond fund’s investment universe. It has expanded the mandate of its Global Green Bond fund to include more “predominantly AAA-rated” bonds, mostly focused on raising money for climate change mitigation. Andre Severino, global head of fixed income at Nikko AM, said the green bond market was experiencing “record growth”, with Moody’s estimating issuance to hit $175bn to $200bn this year.Nordic bank SEB estimated that $185bn worth of green bonds would come to market by the end of 2018.“The expanded investment universe provides clients greater access to the growing green bond market,” Nikko said, “in addition to providing capital to a wider array of green projects worldwide.”