AERODYNAMIC testing of noise generated by shinkansen trains can now be undertaken in Japan Railway Technical Research Institute’s new wind tunnel at Maihara-cho. Work has already been carried out on JR West’s Series 500, and testing of components such as pantographs has proved particularly useful.Measuring the noise generated by air flow over a train or component profile is made possible by an extremely low level of noise in the anechoic test chamber, measuring 22m x 20m x 13 m high and lined with sound-absorbent material. Background noise is 75dB(A) at a wind velocity of 300 km/h.Measurement of aero-acoustic noise takes place with the wind tunnel in its open configuration; an 8m portion of the 228m circuit is open to the chamber where a sound level meter, linear array microphone and parabola microphone are deployed. A maximum wind velocity of 400 km/h is generated by a 5m diameter fan with 12 moving and 17 stator blades, which rotates at up to 550rev/min and is powered by a 7MW three-phase motor.With the wind tunnel in enclosed configuration, aerodynamic testing is undertaken at wind speeds of up to 300 km/h. To simulate air flows between moving vehicles and the ground, models are suspended over a belt measuring 6m x 2·7m which moves at up to 60m/s. Flow visualisation is achieved by means of a smoke generator, specialised lighting and video monitoring.Railway Technical Research Institute, Japan, Reader Enquiry Form Number 141CAPTION: The anechoic test chamber at Maihara-cho, with the wind tunnel in the open position for aero-acoustic noise testing. Models are placed on a raised platform in front of the smaller hood (right) Photo: RTRI
Amtrak has formed a Customer Advisory Committee in an effort to improve its understanding of ’customers’ needs and concerns’. A maximum of 31 members will represent Amtrak’s various corridor, long-distance and short-distance services. The 14-day advance purchase qualification for discounted Eurostar Day Trip tickets from London to Calais, Lille and Brussels was lifted from July 22 until August 31. The £69 Day Trip return fare to Paris, available Mondays to Thursdays, still required advance booking. After generating losses of nearly US$1·45m in 1996, the Warszawa – Sestokai – Tallinn Balti Ekspress was to cease running on September 1. Estonian Railway has been authorised by its operating partners to put operation of the service out to tender.German Railway’s Mecklenburg-Vorpommern region has named a Chemnitz – Rostock InterRegio train Müritz, bringing to 14 the number of named trains serving the region. Most names have cultural or geographical links to particular areas, a policy intended to publicise rail travel for tourist and leisure purposes.British Train Operating Company North West Trains has launched a web site with real-time train running information for all 303 NWT-managed stations. The site is managed by BR Business Systems, which is developing ticket retailing via the Internet (RG 3.97 p152).Rocky Mountaineer Railtours, operator of land cruise trains from Vancouver to Jasper, Banff and Calgary, has ordered three extra double-deck dome coaches for its GoldLeaf Service customers. Complementing an existing GoldLeaf car, the vehicles will feature an upper-deck saloon with panoramic windows and an observation platform, private dining room and galley on the lower deck.Czech Railways is to call tenders for a major redevelopment of Praha Hlavní station later this year. Financing may be raised in part by leasing commercial space to the private sector; earlier studies had put the cost of such a scheme in the region of KC10 to 13bn.German Railway and the news magazine Der Spiegel have launched a daily newspaper appearing at 16.00 Mondays-Fridays, aimed at business travellers on late-afternoon express trains. It is planned to double the initial weekly circulation of 30000 by October.West Anglia Great Northern is promoting tourist travel from London to Cambridge with a package of discounts on leisure activities in the historic university city. Bus tours, punt and bicycle hire are offered with up to 20% off when purchased in advance with rail tickets.London Underground has announced an £800000 package of security improvements for 54 station car parks, in conjunction with British Transport Police and operators Central Parking System UK, Meteor Parking and Contract Services. An average rise in charges of £0·40 per day will fund daytime attendants at locations with over 70 spaces, and improvements to lighting, fencing and surfaces.To cater for short-distance demand, Amtrak added a supplementary coach to the New York – New Orleans Crescent between Washington DC and Danville, Virginia, during August. Lower fares were charged for use of the high-capacity seats car, which was leased from local commuter rail operator Virginia Railway Express.
The UK government is unlikely to relinquish full control over infrastructure planning to an independent infrastructure commission, according to senior managers at Heathrow Airport and the UK’s high-speed rail management company.Beth West, commercial director at HS2 Limited, said she thought the idea of an independent commission – proposed last month in a report by the former chairman of the London Olympic Delivery Authority – was a sound one.But she said it would nonetheless be “challenging” to completely de-politicise the construction of large-scale infrastructure projects.John Holland-Kaye, development director at London’s Heathrow Airport, added that he could envisage a role for an independent body, and pointed to the current Davies Commission’s deliberations on the expansion of the airport capacity in the UK as such an undertaking, if on a smaller scale. Speaking at the inaugural IPE/Stirling Capital Partners infrastructure conference in London, West, however, noted that funding issues on government projects, such as the £17.1bn (€20.4bn) state-funded first phase of the rail line, would ultimately be linked to “various” political issues.“It’s a good idea to have a good cross-government or independent body that can look across infrastructure to make those advisory kind of statements, but it would be challenging to truly remove it from a political process,” she said.Holland-Kaye agreed with her, citing HS2 as a prime example for why politicians would never surrender control.“Look at HS2,” he said. “The size of the funding is so enormous politicians are going to want to control that.“In practice, anybody will play the part of acting as an independent evaluator on behalf of the country.”James Wardlaw, a partner at Campbell Lutyens, meanwhile noted that comparisons with Australia’s independent advisory body Infrastructure Australia neglected the fact the country had dedicated infrastructure ministers on Commonwealth and State level.“What they are therefore able to do is bring together the various elements of infrastructure and decide on the priorities,” he said, “whereas in [the UK], you have about six different departments involved in infrastructure decisions, and the way in which that comes together and [they] decide public spending priorities happens once every three years.”He said the current institutional framework was “definitely sub-optimal” and pointed towards the UK energy market as an example of the problems faced in the country.“We have effectively two energy ministries, the DECC and the Treasury, which are pursuing completely different policies,” Wardlaw said of the Department of Energy & Climate Change and the UK department in charge of government spending.While the Liberal Democrat-controlled DECC is in favour of renewable energy, Conservative chancellor George Osborne is a proponent of fracking for shale gas as a means of strengthening the UK’s energy independence.Zoltan Bognar, managing director of renewables investor Capital Stage, said it was therefore more important for a market to have reliability over an independent body advising on development.“Investor trust and confidence relies very much on our commitments being met,” he said. “Are they being delivered over 20 years or longer?”His firm, investing in Italy and Germany after chancellor Angela Merkel introduced her policy of Energiewende in the wake of the Fukushima disaster, could potentially invest in other countries “where solar or wind makes a lot of sense from a geographic or even macroeconomic perspective”.But he added that issues of corruption and political reliability weighed heavily on investors’ minds.
Institutional investors should not be forced to join collective engagement bodies, such as the investor forum proposed by the Kay Review on long-term investing, as mandatory membership could damage any forum’s credibility, the UK government has said.The Department for Business, Innovation and Skills (BIS) questioned whether a revised draft of the Stewardship Code should include a proviso that investors must join a collective engagement body.“Existing investor bodies for collective engagement, and any new forum that is created, rely on a well-informed and highly motivated membership to operate effectively,” BIS noted in its response to a parliamentary committee report on the Kay Review.“We are therefore concerned such a provision would encourage investors to sign up to such fora simply to ‘tick the box’,” it added, “thereby potentially damaging the quality and credibility of the fora without improving the quality of the engagement.” The department voiced similar concerns when explaining why it did not agree with setting quotas for membership of the Stewardship Code, overseen by the Financial Reporting Council (FRC).“We worry about setting specific targets for levels of sign-up to the Code, which risks a tick-box mentality at the expense of genuine commitment to stewardship,” it said.The response added that signatories already covered most large asset managers, accounting for around 40% of the UK equity market.“With such a significant proportion already signed up to the Code, government action now needs to focus instead on ensuring lasting improvements to the behaviour of market participants,” it said.It also added that pension funds could still be subject to mandatory disclosure requirements, forcing them to publish “the nature of their commitment to the Stewardship Code on a ’comply or explain’ basis”.Christine Berry, head of policy and research at ShareAction welcomed the government’s plans for greater disclosure.“It’s welcome that the government is considering steps to enhance the disclosure framework for asset owners on stewardship issues,” she said.“Comply-or-explain relies on scrutiny from below: just as we expect companies to be transparent to their shareholders and asset managers to asset owners, so pension funds should be expected to account to savers for their stewardship activities.”The response from BIS continued: “However, it is equally important asset owners such as pension schemes develop their understanding of stewardship and their capacity to effectively integrate it into their process for allocating investment mandates to asset managers.”BIS also suggested that the preparation of a Statement of Investment Principles could be better aligned with the existing Stewardship Code.,WebsitesWe are not responsible for the content of external sitesLink to UK government response to committee report on Kay Review
BNY Mellon Investment Management – Michael Jasper has been appointed as managing director and head of the Netherlands institutional business at BNY Mellon Investment Management. He will be based in Amsterdam, reporting to Adrian Gordon, EMEA head of institutional business. Jasper was previously at ING Investment Management, where he was responsible for institutional business development and relationship management.Comgest – Emil Wolter has been appointed co-portfolio manager of Comgest’s Magellan fund and co-portfolio adviser of the Comgest Growth Emerging Markets fund, alongside Vincent Strauss and Wojciech Stanislawski. Wolter replaces Jean-Louis Scandella, who stepped down from his portfolio management duties and will leave the firm at the end of May to pursue other personal interests. Slabbert Van Zyl joined the emerging markets team at the beginning of February, focusing on research of African equities. UK Treasury, Pension Protection Fund, State Street Global Advisors, Blue Sky, ING IM, ComgestUK Treasury – Martin Clarke has been appointed as the new UK government actuary following an open competition, the Treasury department has said. He will succeed Trevor Llanwarne, who plans to retire. Clarke will take up the post later in the year on a five-year fixed-term contract. Clarke is currently executive director of financial risk at the Pension Protection Fund (PPF), having held the post since 2006. He has led the investment, actuarial, risk and recoveries teams at the PPF.State Street Global Advisors – Jasper Bugter has joined State Street Global Advisors in Amsterdam as senior client relationship manager, starting on 3 March. He previously worked at Generali Investments Europe in Amsterdam, and before that for Robeco. Bugter was in client-facing roles at both organisations. In his new role, he will report to Robert Rijlaarsdam, head of the Benelux team at State Street Global Advisors.Blue Sky Group – Josje Wijckmans has been appointed as head of actuarial services at Blue Sky Group in Amstelveen, taking up the new role at the beginning of March. She comes to the Dutch asset manager from consultancy Towers Watson. Wijckmans will report to Erik Bakker, Blue Sky Group’s head of pensions.
Bucksey added that BlackRock was a “great fan in our institutional business of trying to invest in UK plc, but in DC it is actually pretty tough”.“We all might be quite happy to earmark some of our DC savings to an infrastructure project that is going to pay us back in 2025, but when you are dealing with hundreds of thousands of individuals, and the plans change, you might need the money back much quicker than that,” he said.“It’s actually quite difficult to do. It’s just much harder to put it into some kind of unitised structure where people can get in or out [noting the requirement for a blended fund structure to allow for an element of liquidity].”Bucksey was also concerned about the 0.75% charge cap on DC default funds, especially over the opposition Labour Party’s pledge to lower it further to 0.5%.“There’s probably a point in all of this where some stability, from a political point of view, wouldn’t go amiss,” he said. “There’s been a lot of change brought in – and there’s fatigue in the market.”He said the majority of the passively managed BlackRock funds aimed at institutionals charged less than 50 basis points – “but if there are clients using a blend, or using some active, then clearly they would have to review that”. BlackRock has said it will consider how to grant defined contribution (DC) funds in the UK access to illiquid assets as the “big debate” around investments in infrastructure and property continues.Asked how DC funds in the UK could gain access to such asset classes, Paul Bucksey, the asset manager’s head of UK DC, said the firm would “continue to mull that one over” and stressed the benefits of accessing the associated illiquidity premium.“There is a big debate about illiquids, and property is the perennial one,” he said.“We have a DC property fund that really is a blend of four managers, just so we can make sure they are not all going to be full and unable to take money or pay money out.”
Chairman Lim Boon Heng said: “This year has been one of our most active years for new investments – the most active since the global financial crisis – driven by softer Asian markets of interest, as well as the continued recovery of the global economy.”New investments last year totaled SGD24bn, half of which was in Asia where lower asset prices offered attractive investment opportunities, and two-fifths in Europe and North America.Temasek said divestments amounted to SGD10bn, giving a net investment amount of SGD14bn – double the average annual net investment level of about SGD7bn, over the past 10 years.The top three sectors for investments during the year were financial services, life sciences and energy.Towards the end of the year, the company stepped up its investment activities in the consumer sector.Investments in the financial services sector included an increase in its holdings in AIA to over 3.5%, as well as a growth in its stake in Industrial and Commercial Bank of China (ICBC) to 8.9% of its H-shares (equivalent to 2.2% of total ICBC outstanding shares). The company also bought a 1.1% interest in Lloyds Banking Group, the largest domestic UK bank by assets.In the life sciences sector, Temasek invested almost $1bn (€735m) in Gilead Sciences, a major developer of treatments for cancer, HIV and other infectious diseases; and $500m in Thermo Fisher Scientific, a provider of laboratory equipment and consumables.In energy, Temasek invested £235m (€296m) in the BG Group and about SGD2bn in Pavilion Energy, which focuses on LNG sourcing, supply and solutions.Consumer sector investments concluded since the financial year-end include a 24.95% purchase of A S Watson from Hutchison Whampoa for $5.7bn in April 2014.Among its divestments were its stake in Bharti Telecom and Seoul Semiconductor, Tiger Airways, Cheniere Energy and Youku-Tudou. Divestments were reduced to SGD10bn from SGD13bn a year earlier. Temasek Holdings’ investment assets grew at a slower pace in the year to March, weighed down by weakness in Asia, as it opened offices in London and New York to help diversify its portfolio.The assets of the Singapore state investment company increased by 3.7% to a record SGD223bn (€132bn).However, the growth is less than half of last year’s gain of 8.6%.The top three countries represented in Temasek’s portfolio are Singapore, China and Australia at 31%, 25% and 10%, respectively, as at 31 March, according to its annual review. Exposure to North America and Europe grew to over 14%, up from 12% the previous year.
But was this always destined to be just a temporary respite from the more hum-drum and harsher lifestyle Greece had before – in other words, is the so-called Grexit inevitable, either through Greece’s own volition or because it is pushed? Or is the euro-zone like the famed Hotel California in the 1977 hit by the US rock band The Eagles? The lyrics are an apt description of at least the intention of the euro-zone: “We are only programmed to receive. You can check out any time you like, but you just can never leave!” As the Eagles’ intrepid traveller was thinking in the song, “This could be Heaven or this could be Hell”.Unfortunately for Greece, the euro-zone turned out to be the latter. Checking into Hotel Euro-zone has meant prices of food items are comparable to those in Paris or London, whilst average wages in Greece are at least half those of France, Germany and the UK. A half-Greek friend of mine owns a trendy wine bar in the poorer East End of London just off the wealthy financial district. It’s a great place for us to discuss Greek politics, but, despite being an ardent Hellenophile, he serves only South African wine – no wine from Greece. Even for him, the price is too high. His customers would never buy it. Needless to say, he is keen on Grexit.“Last thing I remember, I was running for the door – I had to find the passage back to the place I was before” runs the Eagles’ lyrics, and that’s a good reflection of my friend’s hopes. What the average and honest Greek family is faced with in the Hotel Euro-zone is that what they hoped would be heaven has now turned into hell. The Hotel Euro-zone may have improved lifestyles but not to the point of luxury. Instead, the middle classes are now facing long-term unemployment and an imminent danger of losing their properties.The main consequence of the crisis has not been the loss of a Burj al Arab-level of comfort but the loss of a normal lifestyle, which existed even before checking into Hotel Euro-zone. One Greek ex-professor, dispelling the myth of Greeks scrounging off the taxes paid by Northern Europeans, pointed out to me that he must know 300 or more average middle-class individuals in his social circle, and none of them has a Porsche. For this particular professor, his personal solution was to leave Greece and work in the UK as an engineer. Unfortunately for Greece, that ‘brain drain’ has not stopped.Perhaps the real answer is that, for Greece, the Hotel Euro-zone was neither akin to the Burj al Arab nor the Hotel California, but actually more akin to Caesars Palace, the casino hotel in Las Vegas. Joining the euro-zone was a gamble for Greece that the Greek politicians and business elite were prepared to bet their children’s future on – or perhaps more accurately the children of the masses, since their own wealth meant their own children did not have to rely on the roulette wheel or the poker cards landing in their favour for their future prosperity. But they should have realised the odds were stacked against them from the beginning. Going back to a new drachma may well be the wish for some, although perhaps not the majority of the Greek population. For them, the hope still exists that the Hotel Euro-zone is a real community and not just a trade federation. But as my Greek friends complain, Greece’s politicians did not warn the electorate of the dangers, even if they knew them themselves when the country’s economic statistics were being manipulated to allow Greek entry.But a wider issue for the EU as a whole is whether Hotel Euro-zone itself can survive a country leaving when it really has been only programmed to receive. For the country itself, “the Greek metanoia will be fast and furious when it comes”, says my half-Greek friend. The management at Hotel Euro-zone will be hoping he is wrong.Joseph Mariathasan is a contributing editor at IPE Joseph Mariathasan explains how the euro-zone is not unlike the Hotel California – you can check out any time you like, but you just can never leaveFor Greece, having checked into the euro-zone, the issue of what the edifice is really like has become an existential issue. Is it akin to the Burj al Arab, the self-styled seven-star hotel in Dubai that purports to offer the height of luxury?Staying there, however, can only ever be a short-term holiday for rest and relaxation before stepping back into the hard grind of reality. Greece certainly saw a huge rise in living standards when it joined the European Union. But the drachma was a stable currency for at least two years before Greece joined the euro, and inflation was in check as well.The benefit to Greece on then joining the euro-zone was macroeconomic stability and the psychological assurance that participation in the euro would bring Greece closer to the Western European countries within the EU and thus enhance its security against what it perceived as aggressive and unstable neighbours surrounding it. The stabilisation of buying power through checking into the euro-zone made debt more easily available – many people borrowed to purchase properties and saw their lifestyles improve.
However, performance should match the benchmark once all costs – including taxes, fees and transaction costs – are taken into account.Publica said it hoped the EM debt mandate would diversify its portfolio further, and included the asset class after a recent asset liability management study.To date, it has built up a 5% exposure to EM debt with its in-house team, deputy CIO Patrick Uelfeti recently told IPE.The Quest search added: “Due to the limited risk-taking capabilities, a consequence of the demographic structure of the closed plans, the universe of eligible investments is limited to investment grade, and maturities are capped at 15 years.“Added value should mainly come from country, bond selection and risk management by avoiding ‘red flags’ in credit.”The fund said it would prefer its investment be held in a segregated accounted, with the chosen manager demonstrating a “strong” standing in EM debt and managing at least CHF2bn in EM debt mandates.Additionally, only managers with a three-year track record will be considered, but a five-year record is preferred.Interested managers have until 2 July to apply, stating gross-of-fees performance to 31 May.In other news, an Australian institutional investor is looking to hire a manager to a AUD100m (€68.8m) equity mandate, using IPE Quest.According to search QN2077, the Australian insurer said it would like to invest at least AUD100m in local equities.The actively managed mandate would be benchmarked against the ASX 300’s performance, with a rolling three-year outperformance of 200 basis points, while observing a maximum tracking error of 4.5%.The portfolio, managed as a segregated account, should hold at least 30 stocks, with no single holding accounting for more than 10% of assets.The manager is also asked not to engage in securities lending or short-selling.While a track record of five years would be preferred, the insurer did not set an minimum track record for the asset manager.Nor did it set an minimum threshold for assets under management.Managers have until 25 June to apply, stating gross-of-fees performance to 31 May.The IPE news team is unable to answer any further questions about IPE Quest 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 7261 4630 or email firstname.lastname@example.org. Switzerland’s Publica is seeking an emerging market (EM) debt manager for a $100m (€89m) mandate, using IPE Quest.According to search QN2076, the pension fund is looking to invest in hard currency EM debt, covering both sovereign and quasi-sovereign issuances with a maturity of up to 15 years.The scheme, which reported assets of CHF37.7bn (€31.3bn) at the end of December, said it would benchmark performance against a customised JP Morgan EM bond index, without hedging returns into Swiss francs.It added that it would prefer to maintain a low tracking error of up to 1%, with the manager allowed to include active elements that aim to match the performance of the selected benchmark.
Authorities should also launch a pan-European personal pension plan “that should, at the very least, not destroy the long-term purchasing power of the life-time savings of EU citizens”, he added.The European Commission is currently consulting on its proposal for a pan-European Personal Pension Product (PEPP), with boosting pension saving one of its main goals.In 2015 the Commission said it would ask the European Supervisory Authorities (ESAs) to look into into the transparency of long-term retail and pension products to determine net performance and fees, but Better Finance noted the authorities had yet to be tasked with this, as of August. The ESAs are currently the focus of some major reform suggestions by the Commission.One of Better Finance’s recommendations to policymakers was for them to extend the principle of the Key Information Document (KID) to “all long-term and pension savings products, including pension funds, shares and bonds”. The KID applies to EU packaged retail and insurance-based investment products and includes important information about products in a standardised document.PensionsEurope disapproval?Better Finance’s analysis, as in previous years, included occupational pension funds.Its report described their asset allocation and analysed their returns, identifying Dutch occupational pension funds as “the best performing national pension products over the last 17 years”.The organisation’s reports have previously frustrated PensionsEurope, the umbrella trade body for national pension associations, which has found aspects of them to be of low quality and/or incorrect.Commenting on Better Finance’s 2016 report, PensionsEurope accused the organisation of “comparing apples and pears” by presenting returns over different time periods as if they were fully comparable. It previously also criticised Better Finance’s citation of European Commission information when stating that investment and private pension products were poor performers in the EU’s retail services market. According to PensionsEurope, the Commission was mainly referring to private personal pension plans excluding occupational pensions, while Better Finance included these in its statement.Better Finance said its report aimed to improve transparency on the real returns of long-term and pension savings in Europe.Better Finance’s 2017 report can be found here. EU policymakers must tackle the limited transparency around pension products’ performance and fees if they want to increase pension saving in Europe, according to Brussels-based consumer finance lobby group Better Finance.In the fifth edition of its annual report on the “real return” of long-term savings, it said that fees and commissions were mainly to blame for low returns, although asset allocation also played a part.The organisation argued that many pension products were “massively” underperforming capital markets and that it was time for European public authorities to address the responsibility of providers rather than just urging citizens to take responsibility for their savings.Guillaume Prache, managing director of Better Finance, said: “If EU policymakers are at all serious about addressing the mushrooming pensions gap in Europe, urgent action is needed, starting with the speedy implementation of the ‘retail’ components of the 2015 Capital Markets Union Action Plan by finally enhancing the transparency of performance and fees of long-term and pension savings”.