Denmark’s ATP has said the very high returns it won on Danish equities were not due to short-term tactical investing but the result of thinking long-term and picking companies with global sales.Carsten Stendevad, chief executive at ATP, which runs the Nordic country’s giant supplementary labour-market fund, told IPE: “The Danish portfolio did better than the market, but that’s not how we evaluate it.”He said ATP was a long-term investor and that, while it had clearly adjusted the size of its positions in the home stock market, the outperformance was not a result of short-term tactical positioning.“This is a result of a fairly patient, long-term investment strategy,” he said. He said ATP did not have a desire to be exposed to the Danish equity index but had rather picked companies that fit well into its global portfolio.“Most of them are very global in their exposure, and the vast majority of their revenues are global,” he said.ATP’s annual report revealed its equity risk class produced an overall return in 2015 of DKK11.4bn (€1.5bn) on a portfolio of assets that began the year with a value of DKK57.5bn, which equates to a 19.8% return.By the end of the year, the portfolio had grown to DKK74.4bn.Within this class, listed Danish shares produced a return of 48.1% compared with growth in the main Danish stock index of around 30%.Private equity, which made up more than half of the risk class at the beginning of 2015, generated an 11.4% return, and listed foreign shares returned 3.4%.Stendevad said the unusually high return from Danish shares had come on the back of 30% returns in 2013 and nearly 50% returns in 2014.“So we’ve had three stellar years in Danish equities, and we’ve made DKK17bn on the back of Danish equities,” he said.The pension fund rebalanced these holdings in the meantime, however, selling around DKK10bn of them and re-deploying the proceeds elsewhere in its investment mix, he said, adding that this process would continue.Asked whether, looking ahead, he was moderately bullish on equities in general, Stendevad pointed to the fund’s allocation position.“If you look at our current risk allocation, we are overweight equities and underweight rates and slightly underweight inflation,” he said.“That is the best representation of our view, and that reflects our view of the market.”Property, which falls within ATP’s inflation risk class, produced 8.9% in return, while the return implied by the absolute figures for infrastructure was 19.4%. In absolute terms, the property portfolio grew to DKK34.6bn at the end of 2015 from DKK31.3bn at the end of the year before, and made a return of DKK2.7bn.While equities, inflation and credit produced positive returns for ATP in 2015, the other two risk classes – interest rates and commodities – made losses.Commodities made a loss of around one-third, or DKK1.5bn, in the year.ATP said it reduced its risk exposure to oil by just under 60% at the start of the second half, before oil prices fell markedly.It also cut risk in commodities by increasing diversification – by buying industrial metals and gold, for example.Stendevad said commodities were simply an asset class ATP had included in its overall investment mix since 2006, and that it would continue to have in the new portfolio approach based on risk factors that it has now introduced.He said the asset type was necessary because it would be needed strategically in inflationary environments or those with geopolitical risk.“There will be many years when our commodities may not really do much in our portfolio, but in those economic scenarios that we had in mind when we put it into our portfolio, in those scenarios, it will have a very important risk-diversification aspect,” Stendevad said.
The vehicle will be governed by a regulatory regime compliant with the EU Institutions for Occupational Retirement Provision (IORP) Directive.The details about the new vehicles, which are also being referred to as pension funds “à la française” – will be set out in a separate ministerial order.A draft of this is being discussed by the industry, IPE understands.A spokeswoman for the French finance ministry confirmed to IPE that the final ministerial order was due to be published in the first half [corrected from first quarter] of 2017.The idea behind the FRPS is to allow insurers to shift supplementary pensions into the new legal entity, freeing them from capital requirements under Solvency II.These are seen as favouring sovereign bonds to the detriment of return-seeking assets and economic growth, which the Sapin II law seeks to boost.The government has previously said that some €130bn worth of assets would be eligible for the transfer to FRPS vehicles.In France, the bulk of pension provision is on a pay-as-you-go basis, and, outside of that, pension provision is typically insurance-based.ERAFP, which runs the mandatory supplementary pension scheme for civil servants, sees itself as France’s only pension fund. A French law providing for IORP-compliant pension vehicles in the country has been promulgated, and the decree creating the pension funds is due to be out in the first quarter of 2017.Sapin II, as the law is colloquially referred to – named after the French finance and economy minister Michel Sapin – was officially published on 10 December, having been adopted in the country’s parliament on 8 November.A draft of the law was presented at the end of March.The omnibus legislation includes an article – Article 114 – providing for the creation of a new type of legal entity for pension provision, a “fonds de retraite professionelle supplémentaire” (FRPS).
The changes have significantly reduced the fund’s overall carbon footprint, the Guardians said. NZ Super’s chief investment officer, Matt Whineray, added that internal research had shown that carbon exposure was highly concentrated in a relatively small group of companies.“By targeting this group, we have been able to significantly reduce the fund’s carbon footprint while retaining the diversification benefits of passive investment,” he said.“Our initial focus has been on the passive portfolio, as the largest part of the fund and one in which reducing carbon exposure is relatively straightforward. Our next priority is to reduce carbon exposure in our active investment strategies.” As part of its overall climate change strategy, NZ Super has engaged with portfolio companies to promote better risk management, and has aimed to identify new investment opportunities from the global transition to a low-carbon economy.“Reducing the fund’s exposure to carbon is a commercial decision based on long-term risk to our portfolio as a whole,” Whineray said. “Companies have the opportunity to re-enter the portfolio in the future, if they improve their management of climate risk.”Whineray added that financial markets were underpricing climate change risk over the fund’s long investment timeframe. Reducing exposure to carbon emissions and reserves was a “low-cost insurance policy”, he added.Erste excludes BMW and Daimler on cartel allegationsAustria’s Erste Asset Management has excluded German car manufacturers BMW and Daimler from its investment universe for its line of “responsible” funds due to suspicion they may have been colluding on technical standards and other matters.The cartel allegations, made in the media and being investigated by regulators, also concern Audi, Porsche and Volkswagen, but the Austrian asset manager had already excluded these because of the diesel emissions scandal.“The secret agreements among German car manufacturers, which had started in the 1990s according to media reports, represent ground zero of the diesel emissions scandal,” said Erste in a statement today.Walter Hatak, research analyst and member of the sustainability team at Erste AM, added: “As pioneer and market leader, the German automotive sector bears a huge responsibility. But instead of free competition for the development of the cleanest and most efficient car, it seems backroom deals were made, geared towards stifling this very competition.Making sense of carbon regulation patchworkTrucost, part of S&P Dow Jones Indices, has launched a carbon pricing tool for companies that is intended to help them assess exposure to evolving regional carbon pricing mechanisms.The tool is based on a database that Trucost has built of current carbon regulations, emissions trading schemes, fuel and other taxes, and potential future carbon pricing scenarios designed to achieve the goal of keeping global warming to a maximum of 2°C above pre-industrial temperatures, as per the Paris Agreement.Libby Bernick, global head of corporate business at Trucost, said: “Companies are trying to make sense of the pace at which legislators in different countries, states and cities are implementing carbon regulations.“Because these regulations could drive up the cost of fossil-fuel-based energy and carbon-intensive raw materials, increasing operating costs and reducing profit margins, companies need robust data and analytics to help inform financial decisions over investments in energy efficiency, low-carbon innovation and renewable energy.” New Zealand’s sovereign wealth fund, NZ Super, has allocated 40% of its portfolio to low-carbon strategies following a NZD950m (€588.6m) transaction.The NZD35bn fund aims to reduce its carbon emission intensity by at least 20% by 2020, and lower its carbon reserves exposure by at least 40% in the same period.As at 30 June 2017, the fund’s total carbon emissions intensity was 19.6% lower than when it began its transition, the fund said earlier this week. Its exposure to carbon reserves was 21.5% lower.The Guardians of NZ Super – who oversee the management of the portfolio – said the move to a low carbon strategy meant the fund was more resilient to climate change investment risks, such as stranded assets.
Baillie Gifford & Co52,857Manager Another added: “The research should be part of the daily job of the asset manager.”Pension funds have largely been absent from the debate about MiFID II and research costs, with the focus so far being on whether investment managers will pass them on to investors or cover them internally. The deadline for MiFID II implementation is January 3.Barings is the most recent major asset manager to have publicly announced its decision. Yesterday it said it would absorb external investment research costs for the $288bn (€240bn) firm’s global equity, multi-asset and fixed-income portfolios.In announcing its decision, Barings said it had been expanding its in-house research capabilities over the past several years, thereby reducing its third-party research costs. It planned to continue expanding its proprietary research capabilities in the coming years in response to client needs.In total, 34 of Europe’s biggest asset managers have so far declared or advised how they will comply with unbundling rules, according to IPE research.Record Currency Management told IPE it had made the decision to absorb the costs of any research, and not pass it onto clients.A spokesperson for Northern Trust Asset Management said that in the EMEA and APAC regions it does not currently use client’s commission for investment research and has no intention of changing that model.CBRE Global Investors, meanwhile, told IPE it rarely receives investment research from third parties.“Research typically received by CBRE Global Investors will be from our in-house research team,” said a spokesperson. “In such cases, we will absorb the costs ourselves and will not pass it on to clients.”Germany’s Union Investment recently announced it, too, would take onto its books the costs of external research, veering away from the position it had previously indicated it would take.Alexander Schindler, the executive board member responsible for international institutional business at Union, told IPE there was a “clear move” in Germany for asset managers not to charge clients.Increasing the use of internal research and alternatives such as big data and analytics would follow from such a decision, he said, as well as changing research providers more frequently. Unigestion14,968Manager CBRE Global Investors41,000Manager Deutsche Asset Management230,789Manager T Rowe Price11,759Manager Aviva Investors42,856Manager Union Investment63,812Manager Insight IM537,983Manager NN Investment Partners36,382Manager AXA Investment Managers125,466Manager More than eight in 10 pension funds think asset managers should pay for the cost of independent investment research under MiFID II rules, according to a poll conducted by IPE.The remainder said managers should calculate the cost of the research at a flat rate and pass this on.The pension funds were polled as part of IPE’s October focus group survey – see IPE’s upcoming October magazine for more.One pension fund said: “We are totally against passing research costs to our scheme.” Amundi309,169Client Aberdeen Standard Investments393,759Manager BlueBay Asset Management18,565Manager Northern Trust AM67,379Manager Invesco34,004Manager Janus Henderson Investors40,997Manager JP Morgan Asset Management131,707Manager Record Currency Management48,552Manager UBS Asset Management169,643Manager Hermes Investment Management33,423Manager Kempen Capital Management32,274Manager Vanguard Asset Management61,837Manager Company2017 AUM (€m)Who pays? Notes: AUM figures based on institutional assets, taken from IPE’s Top 400 asset management survey, correct to 31 December 2016. MiFID II decisions sourced from company releases and public reports as of 20 September 2017.Email firstname.lastname@example.org with any updates for the table. Robeco Group80,105Manager J O Hambro Capital Management14,773Manager Russell Investments24,922Manager Schroders139,634Manager Franklin Templeton Investments19,440Manager Newton Investment Management43,719Manager Barings25,894Manager TwentyFour AM9,175Manager BlackRock911,955Manager First State Investments11,282Manager Legal & General IM792,950Manager Allianz Global Investors91,402Manager
Source: Christian Hyldahl, CEO, ATPWithin this, the hedging portfolio – which is invested in bond-like instruments designed to protect the pension guarantees ATP gives – shrank to DKK650.8bn from DKK658.8bn, and the investment portfolio grew to DKK117.7bn from DKK100.4bn.ATP, which uses a risk-factor approach to manage its investment portfolio, produces results that are not easily comparable to other pension funds because it is able to operate in a hedge fund-like manner, effectively borrowing from its huge hedging portfolio to generate return for the investment portfolio.Within ATP’s investment portfolio, private equity produced a return of DKK5.3bn, listed international equities contributed DKK4.9bn and Danish listed equities returned DKK4.2bn, the fund said.During 2017, ATP reduced its risk allocation to the equity ‘factor’ to 44% at the end of the year, from 50% at the end of 2016. It increased exposure to both inflation and interest-rate factors, to 15% and 31% respectively, from 9% and 25%.Hyldahl told IPE these changes had been made in order to achieve a more balanced portfolio.In 2018, ATP plans to focus on real estate acquisitions and its environmental, social and governance (ESG) policy, he said.“We are putting a lot of focus on generating good returns and continuing to add to the portfolio,” Hyldahl said. “If we find good real estate assets that can be a good investment for us over the long-term, then we will go for them, and we are also working on integrating ESG into our operation, both as an asset owner, and also by monitoring all kinds of risks in the portfolio.”The pension fund also announced its supervisory board had ramped up ATP’s long-term performance target to 11%, from 7%, to bolster the aim of maintaining the purchasing power of its pensions.This meant the target return for 2018 was equivalent to DKK12.9bn.Hyldahl said the new target was achievable over the long term but there were likely to be some individual years when it would not be reached.Of the profit the pension fund made on its investment portfolio, DKK1bn was transferred to its guarantees as a result of increased life expectancy, and DKK6.4bn went to members in the form of a 1% increase in their bonus.This led to a net profit for the year of DKK17.3bn, up from 2016’s loss of DKK649m.Although ATP said its hedging strategy was successful in 2017, with its hedging portfolio making a profit of DKK1.5bn before the effect of the break in its yield curve, the fund said hedging had resulted in a DKK1.5bn loss overall.The yield curve break refers to guarantees extending beyond 40 years being valued at a fixed rate of 3%, as opposed to shorter guarantees which are valued at market rates. On these longer guarantees, when the market rate is lower than 3% ATP takes a loss, but when it is higher, it gains. “The strong performance is due to positive contributions from virtually all asset classes, which has made it possible to increase pensions for all members, while also being able to build up our bonus potential by DKK17.3bn.”ATP’s total assets increased to DKK768.6bn at the end of 2017, from DKK759.2bn the previous year. Denmark’s largest pension fund ATP generated its best investment return for many years in 2017, with a gain of 29.5%.This translated to a DKK29.5bn (€3.96bn) gain for on its investment portfolio.The return relates to assets in ATP’s investment portfolio, which consists of the pension fund’s bonus potential – only around a seventh of its total assets. The gain was driven mainly by strong returns on equities, the pension fund said.Christian Hyldahl, ATP’s chief executive, said: “We achieved an exceptionally solid return in 2017 and generated the best investment return in many years.
Credit: Kristina KasputieneThey echoed a Ministry report that said it could not be ruled out that today’s petroleum producers might also be tomorrow’s most important producers of renewable energy.“By keeping oil and gas companies in the investment universe, the Ministry will make it possible for the fund to continue to be invested in these companies,” Slyngstad and Olsen wrote.They said this would be relevant first and foremost when it came to the fund’s environment-related mandates.NBIM also said that alternative energy stocks could be kept in the GPFG’s benchmark index even if it eventually removes oil and gas producers and distributors.The initial proposal to remove oil and gas stocks included cutting alternative energy providers due to the way its benchmark index classifies companies.At the moment, oil and gas stocks in the index are split into three sectors: oil and gas producers, oil services and distribution, and alternative energy.The manager found that – as opposed to the first two sectors – for alternative energy companies, there was no relationship between oil prices and returns relative to the broad equity market.“The Ministry could therefore consider retaining companies classified by FTSE as alternative energy companies in both the benchmark index and the investment universe,” NBIM said in the letter. Norway’s giant sovereign wealth fund could keep oil and gas stocks in its investment universe despite its manager previously recommending cutting NOK300bn (€31bn) of oil and gas equities.Norges Bank Investment Management (NBIM), which manages the NOK8.4trn Government Pension Fund Global (GPFG), had made the recommendation in November in a bid to reduce the Norwegian government’s overall financial exposure to oil and gas.However, responding at the end of April to a request from the Norwegian Finance Ministry for more information, Øystein Olsen, chairman of Norges Bank, and Yngve Slyngstad, chief executive of NBIM, wrote: “We have not assessed the impact of the advice in our letter of 14 November 2017 against other instruments that might be used to reduce the vulnerability of the Norwegian economy to a permanent drop in oil prices.”Slyngstad and Olsen raised the possibility that even though Norway’s wealth could be less vulnerable to permanent changes in oil prices were the fund not invested in oil and gas stocks, the government could use “other instruments” to achieve the same end. However, such an assessment fell outside Norges Bank’s role. In addition, index providers’ classification of individual companies did not necessarily capture the full breadth of their activities, the pair said. For example, a firm classified as an integrated oil and gas company could in fact do much more business in alternative energy than a pure alternative energy company.
In theory, products pooling euro-zone bonds could already be offered but would be treated less favourably than the underlying securities, for example when calculating capital requirements for insurers.The Commission’s proposal was to create a template for SBBS to which all providers offering such products would have to adhere. EU proposals to securitise pools of government bonds have been dismissed as unworkable by German investors.The European Commission presented its plans early on Thursday morning to create a market for “sovereign bond backed securities” (SBBS), effectively pooling together euro-zone governments’ bonds.However, the German association for investment professionals (DVFA) immediately responded to the proposal, saying the structure would not work and there would be no demand.With the new framework for SBBS – designed as part of its work on the Capital Markets Union – the Commission said it “aims to level the playing field by removing unjustified regulatory impediments to the development of SBBS by the private sector”. Former Latvian prime minister Valdis Dombrovskis is leading efforts to strengthen the EU Capital Markets Union“The underlying portfolio must include sovereign bonds of all euro area member states, with relative weights in line with each member state’s contribution to the capital of the European Central Bank,” the Commission stated.The products would have to consist of two risk tranches – the junior package getting higher returns for bearing any losses first, as with any other kind of asset-backed security.However, the DVFA argued that, as many AAA-rated sovereign bonds had negative yields on certain durations, there was no buffer from which to derive excess returns for a junior tranche.This in turn would mean investors seeking a higher risk investment would not buy the junior tranche, as it would not give the associated higher reward.“And if the junior tranche cannot be placed with investors, the SBBS construct itself is not working,” Stefan Bielmeier, chairman of the board at DVFA, noted in the association’s statement.The association likened the construct to a collateralised bond obligation (CBO) in which a contractual hierarchy renders the senior tranche synthetically less risky than it would be on its own.“A crucial prerequisite for a working CBO structure is a low or ideally negative correlation between the securities in the portfolio – and this does not apply to the SBBS structure,” Bielmeier said.They pointed out that, among the 22 euro-zone countries, six have been assessed to have a deteriorating creditworthiness or persistently low ratings.In its statement the DVFA called on banks and other institutional investors to consider whether SBBS would really be a better option than local sovereign bonds.The creation of pooled euro-zone securities has been one of the most discussed solutions to the problem of banks’ close ties to their local securities markets.Different to the concept of Eurobonds frequently discussed since the financial crisis, SBBS would not “involve mutualisation of risks and losses among member states”, the Commission explained.At the DVFA Bielmeier found one positive aspect in the SBBS: “For the ECB, these bonds would create a new asset class easing her capital key corset when buying sovereign bonds.”The Commission’s proposal now has to be discussed by the European Parliament and Council, and will need the approval of all euro-zone member states.
Company pension funds in Switzerland could face a 15% increase to their long-term pension liabilities due to the county’s discount rate turning negative for the first time, according to Willis Towers Watson.In another strange manifestation of the negative yields phenomenon, the consultancy warned that pension funds might need to take the unusual step in order to comply with international company reporting under IFRS/US GAAP.“The discount rate used in the calculations needed for this reporting would be negative for the vast majority of Swiss pension funds now,” WTW said on its website.Discount rates used in accounting by pension funds are based on corporate bond yields for that country. Swiss corporate bond yields have fallen significantly from their already low levels at the end of December 2018, Willis Towers Watson said, by about 90bps. “This means that for a typical Swiss pension fund the discount rate would be around -0.1% at 27 August 2019,” the firm said.If bond yields remained at similar levels, then companies would need to prepare themselves for significantly higher pension fund liabilities at forthcoming company year-end reporting dates, the consultancy said.“For a typical Swiss pension fund the [pension scheme] liability is likely to have increased by around 15% based on current conditions,” it said.Government bond yield curvesChart Maker10-year government bond yieldsChart MakerAs much as $15trn (€13.6trn) worth of investment grade bonds are trading with a negative yield, according to Cambridge Associates .Norges Bank Investment Management recently reported that it held roughly €60bn worth of negative-yielding bonds in the Government Pension Fund Global, Norway’s giant sovereign wealth fund.Negative-yielding bonds have also exacerbated the precarious funding position of many Dutch pension funds in recent months.
If the industry did not act on the idea, Opperman threatened legislation to make providers do so.“I want pensions schemes to drive forward real change quickly but, if necessary, I will consider regulation,” he said. Swedish inspirationSuggesting ideas to motivate people to open the pension statements posted to them, the department looked to an example in Sweden.“The success of the ‘orange envelope’ approach used by the Swedish Pension Agency when sending out state pension statements during a short period each year shows how people can be encouraged to engage with the pensions by generating a national conversation about pensions, supporting the social norming of pension saving,” the DWP wrote in the consultation document.“The Swedish example suggests that having opened their orange envelopes a majority of recipients read their statements,” it said.Within the proposal, the DWP says it is considering transferring ownership of the assumptions underpinning annual benefit statements from the Financial Reporting Council (FRC) to the DWP.It proposes using a mixture of statutory guidance and regulation to set out assumptions, and aligning assumptions for the Statutory Money Purchase Illustrations (SMPI) with those set by the Financial Conduct Authority (FCA) for Key Features Illustrations (KFIs) – except where it identified good reasons for taking a different approach.The department said the FRC had told it for some time that guidance on the SMPIs should not be their responsibility.“We believe that now is the appropriate time to change ownership of the guidance which underpins the SMPI and seek to move towards greater standardisation in the underlying assumptions,” it said.PLSA urges flexibilityLobby group Pensions and Lifetime Savings Association (PLSA) welcomed the idea of simpler statements, but said guidelines would need to be flexible.“Simpler annual benefit statements, along with the Pensions Dashboard and the PLSA’s new Retirement Living Standards, are a great example of good practice in providing savers with clear and concise information that helps them understand their pension,” said Lizzy Holliday, head of DC, master trusts and lifetime savings at the PLSA.Pension schemes were keen to give members simpler and more consistent messages in their communications, she said.“An important principle is that they should be free to tailor their messages for their own member base as well as innovate the means of communication as technology advances.“The simpler annual statement guidelines must necessarily balance the need for flexibility to allow for this and the need for descriptors that ensure savers get consistent information from scheme to scheme,” Holliday said. The UK government has unveiled a plan for simpler, shorter workplace pension statements – ideally covering just one sheet of paper – reasoning that people will then read them and be encouraged to save more.Pensions minister Guy Opperman said: “Pension statements are too long, too wordy, full of jargon and confuse savers. People don’t read them, or if they do they can’t make head nor tail of them.”Simpler statements provided clear information that people would actually understand, he said, adding that this would prompt them to put more money aside.Launching a consultation to run from today until 20 December, the Department for Work & Pensions (DWP) said it wanted providers to commit to giving savers clear information about their pension prospects – ideally on no more than two sides of A4 paper.
Kommunal Landspensjonskasse (KLP), Norway’s main provider of municipal pensions, reported a 3.7% investment loss in the first quarter of this year – a period when the country’s domestic stock market tumbled by 24% – saying its buffers had equipped it for the COVID-19 pandemic’s effect on financial markets.The NOK765bn (€68.9bn) Oslo-based institution also said it had expanded its capacity to lend to the local authorities and enterprises which owned it during the quarter.In its interim report, KLP posted a value-adjusted return on customers’ funds of -3.7% for January to March, and book returns – the return distributed to insurance customers each year – of 0.6%.Sverre Thornes, KLP’s chief executive officer, said: “The world’s financial markets remain challenging, but we have been building up buffer capital over many years to be equipped for these types of market disruptions.” Despite the big falls in the financial markets that were now happening, he said KLP was still very solid and well positioned to meet further disturbances over time, without causing clients worry.“The strategy is firmly aimed at delivering a good and predictable return over time,” Thornes said.KLP said its unit KLP Bank wanted to help the pension provider’s members “at a very challenging time”, so had made two significant cuts in floating mortgage rates, as well as allowing clients who were struggling to postpone repayment instalments.Municipalities and public enterprises found it harder to get loans during March’s financial turmoil, the pension fund said.“KLP, therefore, increased lending capacity to its owners by NOK5bn, and has granted NOK3.5bn in loans to municipalities and public enterprises since the middle of March,” it said. Before this increase, the amount earmarked for such lending was NOK1.5bn, the pension fund said.KLP reported that its within its NOK570.6bn common portfolio, equities fell by 15.6% in the quarter.However, that investment loss is shallower than the fall suffered by the Oslo Børs Benchmark Index, which lost 24.1% of its value in the quarter, according to information from the exchange.Among its other asset classes, KLP said short-term bonds lost 1.1%; long-term/hold-to-maturity bonds made a positive return of 1%, and property generated a 0.9% return.Total group assets grew slightly to NOK765bn from NOK763bn at the end of 2019.KLP’s capital adequacy under Solvency II – not including the transitional regulatory measures – declined to 234% from 342% at the same point last year, according to the Q1 report.Looking for IPE’s latest magazine? Read the digital edition here.