Danish pension fund gains DKK350m on real estate sales
The property fund is jointly owned by several pension funds including Sampension KL Livsforsikring and PKA, and now holds more than 929 rental properties within 20 buildings, mostly located in the Copenhagen region.In connection with the deal, which took effect on 1 January, Pensionskassen for Farmakonomer said it bought shares in the collective fund.Members of the pension scheme will retain the right to rent some of the properties, now indirectly owned by the scheme, it said.Peter Bache Vognbjerg, chief executive of the pension fund, said it had been important for the pension fund to keep hold of this right for its members.The pension fund said the transition of its properties to the jointly owned fund would have no impact on current tenants of the buildings, although it said tenants in some of the properties had offered to buy their property as cooperative housing.“Of course we hope the fund in the long term will have several properties when hopefully more institutions choose to enter into it with their properties,” Bache Vognbjerg said.He said in November that, when the fund did sell its property holdings to the collective fund, it would receive half of the proceeds of the sale in cash and become 50% owner of the fund itself.He added that, within the risk budget, real estate had too high a weight, was considered too illiquid, and that too much was needed in terms of capital.The fund took the first step in realising its plan in November last year, selling four residential properties in Aarhus, going ahead early with the sale because of a good offer it received. The Danish pension fund for pharmaceuticals assistants, Pensionskassen for Farmakonomer, is selling 12 properties to a collective fund run by Danish property administrator DEAS as part of its strategy of divesting direct real estate holdings.The DKK10bn (€1.3bn) pension fund said it sold the 12 properties, which include 466 rental units, to real estate fund DEAS Invest I, releasing DKK350m the scheme will use for new investments that provide a better return.“The collective property fund has, at the same time, the opportunity to borrow against homes at an interest rate that is currently very low,” the pension fund said.Pensionskassen for Farmakonomer has already announced its intention to sell off all real estate holdings over the course of this year, putting the proceeds into a fund.
The statement came at the end of the forum’s second meeting in Windsor, UK. On behalf of supervisors and regulators in 16 jurisdictions, the SIF pinpointed four ways they played a role in supporting the uptake by companies of the recommendations.These included raising awareness of the TCFD and supporting “appropriate aspects” of its advice as a best practice to be considered by insurers in their financial disclosures.The SIF also proposed “working with market actors to build capacity and share tools, including for the development of scenarios and metrics”, and “incorporating relevant insights from climate disclosures into routine supervisory activities”.In the statement, the group described climate change as one of the most serious long-term challenges for the insurance sector and the wider financial system.The signatories said that as risk managers, risk carriers, and investors insurance companies played “a cornerstone role” in the management of climate-related risks and opportunities.Dave Jones, California Insurance Commissioner, said: “As a financial regulator, I believe it is important that financial institutions, including insurance companies, recognise and address potentially significant climate risks facing their investments in coal, oil and gas, and utilities.” Insurance regulators and supervisors from 16 jurisdictions around the world have jointly backed a set of recommendations on how companies in the sector should disclose the climate-related risks affecting their businesses.A statement from the Sustainable Insurance Forum (SIF) – an international network of insurance supervisors and regulators – welcomed the recommendations and guidance from the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD).At the end of June, the task force released its final recommendations report – a voluntary framework for companies and investors to report climate-related information in their financial filings.This week, insurance supervisors belonging to the SIF – including De Nederlandsche Bank, the UK’s Prudential Regulation Authority, and France’s Autorité de Contrôle Prudentiel et de Resolution – said a “growing number of insurance supervisors are now taking action to respond to climate-related risks to the sector, with disclosure being a core focus”.
“Its technology eliminates the large volumes of water and chemical consumption associated with traditional data centre construction and operations, delivering significant cost savings alongside substantial environmental benefits,” ISIF said in its statement.Paul Saunders, the ISIF’s head of innovation and special investments, said the allocation “demonstrates the fund’s ability to back cutting-edge, clean technology that will place Ireland at the forefront of data centre design”.It also fitted with the ISIF’s “double bottom line” strategy of sourcing commercial returns while supporting Ireland’s economy, the fund said. Nautilus is expected to generate “up to $40m” of annual revenue once at full capacity, as well as bring in new jobs. The Ireland Strategic Investment Fund (ISIF) has invested $5m (€4.2m) in a data centre provider that has pioneered new environmentally friendly cooling technology.The €8bn sovereign wealth fund’s investment will back US firm Nautilus Data Technologies’ expansion into Ireland, according to an announcement yesterday.The money formed part of a $26m fundraising for the company, which is led by CEO James Connaughton, a former adviser to US president George W Bush.Nautilus’ data centres are situated on or near water, and the company has claimed they are “substantially” cheaper and more energy efficient than other data storage methods, primarily due to a patented method of water cooling for the servers its uses.
Granting UK retirees freedom to spend their savings as they wish could undermine the success of auto-enrolment, according to NEST.The two government policies – automatic enrolment into workplace pension funds, and ‘freedom and choice’ at retirement – are based on “diametrically opposed” assumptions, the defined contribution master trust warned.The UK parliament’s Work and Pensions Select Committee – a cross-party group of MPs from parliament’s lower house – is conducting an inquiry into the rise of scams affecting pension savers. This has been linked to the ‘freedom and choice’ concept, introduced by former chancellor George Osborne in 2015, which removed the requirement for retirees to buy an annuity.In its response to the committee’s call for evidence, NEST said it was “unrealistic” to move from an accumulation phase built around the idea that consumers were disengaged with pensions to a decumulation phase that placed all the “execution risk” on individual savers. ‘Freedom and choice’ was introduced by George Osborne in 2015“Should this state of affairs continue, we are extremely concerned that a large proportion of the NEST membership and wider savings populations will continue being subject to [the] risk of poor outcomes,” the scheme said – including falling victim to fraudsters.NEST added in its response that “there needs to be significant innovation in both the advice and guidance market as well as from a propositional perspective… We do not see any current evidence that this is happening”.NEST was set up in 2010 as a defined contribution provider to enable to introduction of auto-enrolment.What do members think happens at retirement?NEST surveyed a number of its members to find out their expectations for what would happen with the pot of savings they have built up with the scheme.A third of NEST members (34%) said they expected the pension fund to pay a regular income in retirement – which it is not set up to do.The majority (60%) said they did not know what would happen to their pension savings at retirement, either because they hadn’t thought about it, didn’t understand the options, or hadn’t yet decided.Only 6% of members said they would use their retirement savings to “buy something from elsewhere”.The UK regulator, the Financial Conduct Authority, also responded to the committee’s inquiry, warning that consumers “may miss out on investment growth and pay more tax than is necessary” because of a general mistrust of pension providers.The regulator also said it was working on a “bespoke and targeted” campaign to raise awareness of scammers, in conjunction with the Pensions Regulator.David Knox, author of the Melbourne Mercer Pensions Index, argued in his latest report – released last week – that the UK’s pension system would be improved by “restoring the requirement to take part of retirement savings as an income stream”.In the Netherlands, discussions about allowing individuals more choice at retirement have led some commentators to warn that people could be worse off if they make the wrong choice. The two “diametrically opposed” policies could undermine each other, NEST argued, if savers failed to use their pension pots to build a “more adequate retirement income”.
Dutch pensions watchdog DNB cannot stop cross-border pension transfers to another EU member state if the reason given for this transfer is more flexibility, according to Wouter Koolmees, the Netherlands’ minister for social affairs.All member states have to comply with a set of minimum requirements, which may result in pension schemes from the Netherlands ending up in a country where a higher discount rate is applied, he said. Koolmees was responding to questions from members of parliament about the transfer of the pension fund of Aon Hewitt Netherlands to the United Pensions vehicle in Belgium. United Pensions’ discount rate for valuing liabilities is higher than the current discount rate in the Netherlands. The entitlements of pensioners would thereby be discounted at a rate of 3.5%. This figure is based on the expected return on the same composition as the Dutch investment portfolio. A move of the accrued pensions from the Netherlands to Belgium will result in a coverage ratio that is 11 percentage points higher. Dutch MPs Pieter Omtzigt of the Christian Democrats and Martin van Rooijen of the Seniors’ party had demanded clarification on this matter. In his reply, Koolmees noted that the Netherlands did not consider a discount rate of 3.5% based on the expected return to be prudent. “Belgium has chosen a different interpretation of the financial assessment framework, including a different interpretation of the discount rate,” said Koolmees.This was possible because European rules only stipulated a minimum and maximum discount rate, he added. The Netherlands did not want to further harmonise these rules.The minister indicated he agreed that the actuarial rate for the group of pensioners in the Netherlands was around 1%, as assumed by Omtzigt.However, nothing could be done, according to Koolmees. The Belgian assessment framework complied with EU legislation, he noted, although it based itself more on principles than rules, and hence allowed “a lot of room for own interpretation by the pension provider or the employer”.When an assessment framework met the minimum requirements of the EU pension fund directive, IORP II, differences with the state of play in the Netherlands could not be a reason to stop a collective pension transfer. DNB would not be allowed to block a transfer due to supervisory arbitrage, Koolmees confirmed.IORP II, which the Netherlands is currently in the process of adopting in national law, would not change this.
“Voting rights are vital for a well-functioning market by providing critical market mechanisms to hold management to account. The failure to protect investor rights, we believe, could damage the ability of the market to function in investor interests.” Credit: Tero Vesalainen Tech companies such as Facebook and Snap have dual class share structuresMSCI’s decision followed an 18-month consultation regarding the treatment of such share structures that the index provider said had exposed a split in opinion among major institutional investors.In a statement yesterday, MSCI said it continued to support the “one share, one vote” principle, which it acknowledged had gained “overwhelming support” from those providing feedback.“The treatment of unequal voting structures in equity benchmarks, however, has proven to be a polarising question among international institutional investors,” MSCI said.“For instance, while many participants felt strongly that benchmarks should be adjusted to reflect unequal voting structures, other participants highlighted that the question of unequal voting rights should be addressed holistically by the stakeholders that are responsible for operating, regulating and investing in equity markets. These stakeholders include, among others, securities regulators, stock exchanges, asset owners and asset managers.”As a result of the decision, any companies with share structures that offer some shareholders greater influence than others would continue to be eligible for its main indices at their “free float market capitalisation weight”, the provider said.The new index series, meanwhile, would specifically include shareholders’ voting rights among its eligibility criteria, and would be designed as an alternative to MSCI’s main benchmarks. The indices are slated for launch in the first quarter of 2019.Alternative approachesMSCI’s decision chimes with a proposal put forward by BlackRock earlier this year regarding the treatment of dual share class structures.BlackRock vice-chairman Barbara Novick in April called for regulators to be made “the arbiters of corporate governance standards for publicly listed companies”. One of Europe’s biggest asset managers has criticised index provider MSCI for allowing into its benchmarks companies with unequal voting rights in their share structures.MSCI announced yesterday that it would launch a range of benchmarks to account for companies such as Snap, owner of the Snapchat smartphone app, which does not give shareholders any voting rights. However, its regular indices would continue to treat them the same as other companies. Sacha Sadan, director of corporate governance at Legal & General Investment Management (LGIM), said: “LGIM is disappointed to see the U-turn by MSCI on the equal rights of shareholders.“This means MSCI default indices will not be taking voting rights into account after a long consultation initially launched in June 2017, despite a majority of investors wanting indices to reflect the equal rights of shareholders. The result is that stocks like Snap with zero voting rights will be allowed back into MSCI indices.
BlackRock suggested alternative indices earlier this yearNovick said in a letter to MSCI president Baer Pettit: “We recognise the potential benefits of dual class shares to newly public companies as they establish themselves. However, we believe that these structures should have a specific and limited duration.”Index providers could aid good governance by creating “alternative indices” to allow investors to reduce or screen out their exposure to companies with “unequal voting rights”, she added.Social media giant Facebook’s dual share class structure was challenged last year by Swedish pension fund AP7, one of its largest investors, which succeeded in forcing the US company to abandon plans to issue voteless Class C shares. Richard Gröttheim, chief executive of AP7, claimed the move would have cost investors as much as $10bn (€8.1bn). Last year, S&P Dow Jones Indices said it would no longer add companies with multiple share class structures to its S&P Composite 1500 index.
Austrian pension funds expect to benefit from new investment flexibilitiesIORP II is set to have a positive impact on Austrian Pensionskassen as the country has done away with quantitative caps on how much funds can invest in different asset classes.The legislation’s emphasis on pension funds having more control over their own risk management functions has put control over investment limits and currency hedges back in the hands of the funds themselves.As Helmut Ettl, chairman of the board of Austrian regulator FMA, told IPE last year: “A lot of the risk management requirements in the IORP II directive are already part of the Austrian pension fund legislation.”Andreas Zakostelsky, chairman of pension fund association FVPK, said Austria had “almost no need for amendments” as most of the EU directive’s standards for transparency, information, governance and risk management were already part of the domestic legal framework.Belgium Bucharest, RomaniaThe government in Bucharest wants use IORP II legislation to create a voluntary occupational second pillar alongside the mandatory second pillar, which has acted more as an addition to the state pension system.Employers will be given the right to set up a pension plan for their employees via a fund manager. Contributions will be voluntary and limited to €400 per year.No further details of these new plans are available yet as the draft must be finalised by the government and parliament in their respective sessions this month. However, opposition parties have announced plans to challenge these new pension funds, claiming they are unconstitutional.Sweden IORP II, the European Union’s sweeping reform of pension fund legislation, came into force on 13 January. It added 43 new articles to the original IORP directive and put a renewed focus on governance and communication standards.Institutions for occupational retirement provision (IORPs) must invest according to prudent person principles, improve their internal risk management functions, and make more data and information available to members.The European Commission said this month that it would “carefully examine” how each member state has implemented the directive “to make sure that they fully deliver the new standards set at the EU level”.The legislation has had a fraught conception. European regulators and lawmakers initially wanted to introduce a “holistic balance sheet”, which would have introduced a solvency framework for pension schemes across the EU. This was successfully fought off by member states including the Netherlands, the UK and Germany and never made it into 2017’s final text. Source: European ParliamentBelgian prime minister Charles Michel resigned last monthThe resignation of Belgium’s prime minister Charles Michel in December threatened to derail the legislation implementing IORP II, but it was passed by the country’s caretaker government on 20 December.National regulator the FMSA is understood to be preparing the publication of several “circulars” to provide further explanation and guidance about IORP II implementation, some of which are due out this quarter.The biggest issue for Belgian funds, according to Lut Sommerijns, partner at law firm VWEV, related to new internal risk management controls.Until now, Belgian pension schemes had not been required to have a centralised, co-ordinated risk management function.FranceIORP II has had little impact in France as most pension providers do not qualify as IORPs.However, the introduction in 2016 of France’s Sapin II law and the “fond de retraite professionalle supplémentaire” (FRPS) model has paved the way for a new type of pension fund that is subject to the EU directive.In November 2018, Aviva France set up the country’s first FRPS and transferred €4bn of pension fund assets to the vehicle. Insurance group Sacra followed with a similar move this month.More are expected to follow as insurers seek to move pension assets out from the restrictive Solvency II framework.GermanyGerman pension fund association aba has been among the most vocal critics of the IORP II directive, campaigning strongly against the holistic balance sheet concept and the introduction of delegated acts.It also pushed back at the German government’s initial proposal for implementing IORP II, which it claimed would have pushed pension funds towards an insurance-type framework similar to Solvency II. It voiced hope last month that the final legislation had relaxed these requirements.The local legislation, known as EbAV II, is set to introduce more reporting and internal risk assessment requirements for pension funds.Overall, requirements for providers will increase “significantly”, according to Michael Hoppstädter, managing director of consultancy Longial. Source: European ParliamentGerman pension industry representatives have repeatedly clashed with the EU over IORP IIIrelandIreland has missed the deadline for implementing IORP II.The Department of Employment and Social Protection has said the necessary legislation is “at an advanced stage” but no date has been set, despite implementation forming large part of the government’s pension reform plans, set out last year.The delays have caused serious concern throughout the country’s pension fund industry, as IORP II is expected to have a profound impact on many aspects of scheme operations.The Pensions Authority, Ireland’s regulator, has published guidance for trustees detailing the new requirements that the EU rules will bring in, including “fit and proper” tests for trustees, written policies on key areas of risk management and outsourced services, and minimum standards for communication with members.
Roma Burke, LCPRoma Burke, partner and actuary at LCP in Ireland, warned that these changes to the Irish rulebook would require “significant effort”.“This will probably go above and beyond what most trustees are used to, and we’d expect significant costs for trustees to comply,” she told IPE.The Irish Association of Pension Funds has called for an exemption from IORP II rules for pension funds with 100 members or fewer until suitable consolidation options become available.There is a specific provision in IORP II allowing this, but until the government finalises legislation the regulator is unable to provide full guidance to schemes.NetherlandsThe impact of IORP II on Dutch pension funds is expected to be small. However, at a conference in December, regulator De Nederlandsche Bank (DNB) offered schemes help with appointing key staff to oversee audit, actuarial and risk management matters.Gisella van Vollenhoven, DNB’s director for pension fund supervision, indicated that large pension funds would place the important positions within their own administrative functions, whereas it was likely that board members would take on these tasks at smaller schemes.She said the watchdog was ready to provide advice, explaining that the support would depend on pension funds’ structure, governing bodies and scale.NorwayNorway’s predominantly insurance-based pension system is largely unaffected by IORP II. Occupational schemes are expected to transition to the new rulebook fairly easily.However, the government has moved to introduce a separate solvency requirement for occupational schemes similar to the rules for insurers – a move that was resisted at a European level during IORP II’s development.Espen Kløw, secretary general of the Norwegian Association of Pension Funds, told IPE last year: “The capital requirement is both unfortunate and unnecessary, and it is in conflict with the regulation in Europe, IORP II.”Romania However, the EU’s sustainable finance initiative last year rekindled fears that lawmakers would try to harmonise rules across the bloc to the detriment of pension funds. The European Commission attempted to introduce so-called “delegated acts” legislation that would have given the EU more power to enforce new rules on the pension fund sector.The European Parliament, made up of elected MEPs, has supported the idea, but the EU Council, representing national governments, has not. At the time of writing, the final text was yet to be agreed.IORP II – national implementation Austria IORP II has posed problems for smaller Swedish pension providersThe Swedish pension market is in a state of flux owing to regulatory change, with smaller providers struggling to meet the costs of adapting to IORP II.A prime example is AI Pension, the SEK7.9bn (€756m) industry scheme for architects and engineers.Falling active membership and changes to insurance premiums were already putting the fund under pressure before IORP II came along. The cost of hiring staff to meet the directive’s requirements meant it had to seek a sale – it was taken over by Skandia in September 2018.Pension providers asked the government for an additional transition period of up to three years to adapt to the changes “in order for insurance companies to be able to make decisions and gain knowledge of more detailed business conditions”.Separately, the IORP II implementation bill in Sweden will allow insurance companies and workplace pension savings institutions to be converted into occupational pension companies, as long as they meet certain requirements. The rules are proposed to take effect on 1 May 2019 and apply to firms that only offer occupational pension insurance. They also allow for the formation of new occupational pension companies. UKGovernance requirements were made law in the UK in October last year. The Pensions Regulator (TPR) will consult on a code of conduct this year, and put it into effect from 2020.The Department for Work and Pensions (DWP) also made changes to the rules for cross-border schemes in accordance with IORP II.However, rules regarding annual benefit statements have yet to be implemented, with other domestic pension work overtaking it.Tony Bacon, senior consultant at LCP, has warned that the DWP risked falling foul of the European Commission if it had not implemented the directive properly – although with the UK’s departure from the EU imminent, it is unclear how much authority the Commission would have.
With a slim majority, the Swiss government’s occupational pensions expert body has recommended its minimum interest rate be kept at 1% for 2020.The Mindestzinssatz is the minimum interest rate that every pension fund in Switzerland has to grant annually on active members’ accrued savings based on mandatory contributions.According to a statement from the BVG-Kommission, the politically appointed body of occupational pension stakeholders, its members had made suggestions for the rate ranging from 0.25% to 1%, and different versions were voted on.Both its formulas – the basis for its annual recommendation – had produced a lower value than 1%, but other factors were considered. These included the rate’s affordability for pension providers given the investment returns they could achieve. The BVG-Kommission also noted that the rate “should strengthen trust in the second pillar”.The president of the commission told IPE it had considered the latest public annual report from the federal pensions regulator, which showed that funding levels had improved since the beginning of the year and that it could therefore “answer for 1%”.The government decides on any changes to the minimum interest rate. Last year it decided to keep it unchanged at 1% despite the BVG-Kommission having recommended 0.75%. That was the first time the government went against the expert body’s recommendation. Pension fund body urges ‘depoliticisation’ Asip, the Swiss occupational pension fund association, called for the rate for 2020 to be set at 0.5%, and for a review of the process for setting the rate and the variables in the main formula. “The parameters in the [occupational pensions law] have to be depoliticised,” it said in a statement. “This would allow the parameters to be based on objective models or calculation methods that can be made sense of.”It noted that as at July, both the old and new formulas used by the expert commission produced results between 0.5% and 0.6%.Although the BVG-Kommission took into account other factors, the basis for the rate must be the current rate environment, said Asip. This had fallen even further than last year, it added.Switzerland’s main employer association and the insurance industry body strongly criticised the BVG-Kommission’s recommendation, and called for the rate to be set at 0.5% and 0.25%, respectively.The main trade union welcomed the recommendation, saying that pension funds were in a situation that allowed a 1% minimum “despite the economic uncertainty”.Pension funds are free to apply a higher rate if they are able to.Last year the expert commission voted to adjust the formula that forms the basis of its discussions, increasing the weight of equities and real estate and dropping a long-term smoothing of government bond yields in favour of the current rate of the 10-year sovereign bond.
Building inspector Kevin Denison on the job.FORGET a housing crash or the risk of defaulting on mortgage payments – the biggest worry for property buyers is getting a home with unforeseen damage and hefty maintenance requirements.This is according to a new report which revealed the fear of owning a problematic home is so strong that homebuyers consider forgoing building inspections as the biggest mistake they could make.More than four in five respondents of the ME Bank survey of 1000 Aussies viewed failing to pay the $500 to $1000 typically required for a building inspection as a major gamble.This was a greater number than those who saw buying off the plan or regional property as risky.Buyer’s agent Nicole Jacobs said the concern was warranted.“You wouldn’t buy a car without a roadworthy, so why wouldn’t you (want) to know the health of a property before buying it?” she said.“A building inspection gives you knowledge on what needs to be done and what costs there will be. If there’s nothing wrong then you will have the confidence to go forth with gusto.”Mould and termites were two of the biggest and most costly issues facing homeowners in Cairns, according to Building Reports FNQ owner Dianne Martin.“Some of the things to bear in mind is that clients won’t get in the roof every week and won’t climb around in the sub floor,” she said. “We’re looking at the stuff that is hidden behind everything.“There can be termite activity, in wet areas there can be mould. We use an especially designed moisture meter reader so we can point that out for clients.“There are a good proportion of buyers, and even sellers now who are stepping up to the plate and being proactive. Often clients want to get a building and pest inspection but having the vendor already do that, they can go ahead with the rest of the business.“It makes sense for the seller to do this too. In Cairns, buyers are really quite keen to cover these avenues.”Some of the other survey results were more surprising.Buying property with friends and family was considered the second biggest mistake buyers could make, with 62 per cent of respondents viewing it as a risk.Just under half of respondents considered getting an interest-only loan as a risk, while 45 per cent thought there was a danger in selling an existing home before buying the next one.Only a third of respondents thought there was a risk in buying their home via auction.More from newsCairns home ticks popular internet search terms3 days agoTen auction results from ‘active’ weekend in Cairns3 days agoFew respondents saw a problem in buying their home during winter, with just 14 per cent labelling it a risk.Financing a purchase with a lender outside of the Big Four was considered risky by 23 per cent and 38 per cent of respondents thought investing in regional real estate was a mistake.However, buying off the plan was one factor that weighted more heavily on buyers’ minds. Just over half of respondents considered it a significant risk and a third thought it was an average risk.Mr Nolan said one of the trickiest parts of buying off the plan was having a good feel for how the home would look once built.“You do need a healthy dose of imagination to picture how the finished product will look,” he said.“Do your homework into the developer and builder and seek independent advice on the contract of sale.”Auctioneer and licensed estate agent at Hockingstuart Simon Wendt said knowledge was key in any off-the-plan purchase.“Buying off the plan isn’t risky if you know what you’re getting and fully understand the dimensions, aspects and quality of finishes.”ME Bank’s head of home loans Patrick Nolan, referring to the 62 per cent of respondents cautious about buying with family or friends, said co-ownership agreements were probably viewed unfavourably because they restricted people’s ability to sell down the track.“It can be risky if one person wants to sell or situations change,” he said.“Co-buying offers valuable advantages because it means you can pool financial resources (but) I would suggest that you have a formal co-ownership agreement in pace drafted by a solicitor.”Ms Jacobs agreed that the arrangements required caution.“I view this as risky,” she said. “We are emotional beings and emotion can often lead to poor decisions. You don’t want a house to be the death of a friendship or family relationship.”
Norwegian shipowner Ocean Yield has agreed to acquire four very large crude carriers (VLCCs) with 15-year bareboat charters.All four vessels are chartered to companies owned and guaranteed by Okeanis Marine Holdings, and sub-chartered to the shipping arm of a large industrial conglomerate for a period of 5 years.The company said that the gross purchase price is USD 83.75 million per VLCC and the net cash purchase price is USD 74.25 million after a seller’s credit of USD 9.50 million.“The investment is done at historically low asset values and will increase our EBITDA charter backlog by about 16% to USD 3.4 billion as per today,” Lars Solbakken, Ocean Yield’s Chief Executive Officer, said.The ships are scheduled for delivery by South Korean yard, Hyundai Heavy Industries, in Q2-Q3 2019. Okeanis Marine Holdings will have certain options to acquire the VLCCs during the charter period, with the first purchase option exercisable after seven years.