Posts under ‘Shell Pension Fund’

THE WALL STREET JOURNAL

By MARK COBLEY and PHIL CRAIG

The £10.5 billion ($14.3 billion) pension fund for Royal Dutch Shell PLC has become the latest big investor retreat from active fund management, in a further blow to managers already suffering from reduced market values and a poor economic outlook.

In documents posted on the pension plan’s Web site, the fund’s trustees wrote that they had placed an upper limit on the amount they would entrust to stockpickers: 40% of its equities holdings. The fund didn’t say what percentage it previously had under active management, but it didn’t previously have an upper limit. It has also upped the percentage of its investments that go to passive bond investments such as those tracking bond indexes.

“Active management, where managers pick stocks or bonds rather than just follow the index, has not been very successful for many investors during this period of market turmoil and the trustees have decided that they want to track the market indices more closely,” they wrote.

Bloomberg NewsWorkers handle a drill bit on a Royal Dutch Shell platform in Brunei. Shell’s pension fund is limiting active management to 40% of stockholdings.

Shell’s money is managed in house, rather than by third-party fund managers, but its trustee board’s decision is part of a wider trend as pension funds increasingly question the value of allocating assets to active managers.

Consultancy Towers Watson, which looks for the best fund managers on investors’ behalf, said the number of searches it had done worldwide for index-tracking, or passive, fund managers had increased fourfold in the past two years.

This implies lower fees and profits for fund managers, since a passive mandate typically costs between 0.1% and 0.15% of managed assets a year, whereas the fees on active mandates range from 0.35% to 0.75%.

Other big investors have been taking similar steps. Last week, the 12.8 billion Swiss-franc ($11.9 billion) PK Post fund, one of the largest pension funds in Switzerland, placed 60 million francs with Tobam, a Paris-based fund manager that invests clients’ money in alternatives to traditional stock indexes of its own design.

PK Post first employed Tobam in June 2008 and its latest allocation means it now has 165 million francs with the self-styled “anti-benchmark” managers. Christophe Roehri, head of development at Tobam, said its fund was slightly more expensive than a traditional index, but offered more diversification.

Towers Watson consultants believe today’s level of passive investing—about a quarter to a third of institutional investor assets—is set to increase dramatically. Tim Hodgson, a senior consultant at the company, said it could account for half of assets under management within the next 10 years. He said: “We are probably just about to enter the acceleration phase.”

: “The shift towards passive is not being driven by a belief that good active managers do not exist,” said Rob Gardner, a partner at Redington, a consultancy that advises some of the U.K.’s biggest pension plans. “It is being driven by a realization that pension trustees’ limited governance budget is better spent on the overall mix between assets and liabilities.”

Andy Barber, global head of manager research at Mercer, said that of last year’s searches for global equity managers on behalf of clients, 15% were for passive mandates, an increase compared with

Passive management has become a booming business for those with the necessary scale, such as Legal & General Investment Management. BlackRock, one of the world’s biggest active managers, bought index giant Barclays Global Investors last year. John Fraser, the chief executive of UBS Global Asset Management, said last week that he was looking at an acquisition in passive management.

A spokeswoman for Shell in London said: “We believe this is the right strategy for long-term value.”

——For more, visit efinancialnews.com

Write to Mark Cobley at mark.cobley@dowjones.com and Phil Craig at phil.craig@dowjones.com

WSJ ARTICLE (SUBSCRIPTION)

Shell Asset Management Co., the manager of Royal Dutch Shell PLC’s various pension funds, has taken its stake in hybrid electric power company Enova Systems to almost 20% following a $10 million capital raising exercise.

A study by consultants Lane Clark & Peacock found a massive turnaround in corporate pension accounts. Royal Dutch Shell’s scheme saw a surplus of £6.8 billion turned into a deficit of £5.6 billion.

Wed Dec 2, 2009 3:04pm GMT

By Tom Bergin

LONDON, Dec 2 (Reuters) – A prominent Internet critic of Royal Dutch Shell (RDSa.L) says the oil major has asked an anti-cyber fraud agency to target his site, which Shell admits provides better information on the group than its own internal communications.

John Donovan, who runs the Royaldutchshell.plc website, where disaffected Shell employees post company news and gossip, said the move suggests Shell has adopted more aggressive tactics in its long battle to shut him down.

“They are very worried about the leaks,” Donovan told Reuters in a telephone interview.

“They are trying to track down the people who are leaking information to us,” he added.

The allegations are based on emails Donovan said Shell released to him following a request under data protection law rights. Donovan shared these, and a letter on Shell headed paper responding to Donovan’s request, with Reuters.

Shell did not comment on the veracity of the communication or any of Donovan’s allegations, despite several emails and phone calls requesting it.

However, Gavin White, from Shell’s legal department, whose name appeared on the cover letter to Donovan, confirmed that Donovan made a request for information.

“The request is not a matter for public discussion or comment,” White said.

One email between Shell employees dated June 2009, said an individual whose name is blanked out but apparently also a Shell employee, met with “NCFTA” to discuss the website.

The email adds that resources had been assigned to NCFTA “that are RDS (presumably Royal Dutch Shell) focused” and that “There will be no attempt to do anything visible to Donovan”.

Donovan believes NCFTA refers to the National Cyber Forensics and Training Alliance, a Pittsburgh-based organisation, whose website says it is supported by Fortune 500 companies and that its purpose is to help tackle cyber fraud.

A Google search for NCFTA yields the Pittsburgh organisation as the top result.

National Cyber Forensics and Training Alliance did not respond to emails or telephone calls.

Another email, dated March 2007 said Shell was monitoring emails from Shell servers globally to Donovan and internal traffic to their website. The email noted this information was “not for publication”.

LONG-RUNNING BATTLE

Donovan, 62, and his father, Alfred, 92, have been vocal Internet critics of Europe’s largest oil company by market value since the 1990s after a business dispute with Shell, which was a client of their sales promotion business.

That case, and two libel actions against Shell, were settled out of court a decade ago but the internet battle has continued.

Shell insiders use the Donovans’ site to leak company secrets including, in the past 12 months alone, a planned restructuring of the group under new Chief Executive Peter Voser and a big hole in Shell’s pension fund.

The website, which Donovan said receives 2 million hits a month, has also featured attacks on Shell’s safety and environmental record.

Most of the vast reams of information and news reports on the site is unflattering about Shell, whose market capitalisation tops $182 billion.

Another email seen by Reuters, apparently from a Shell communications representative to U.S. news network Fox News said: “royaldutchshell plc.com is an excellent source of group news and comment and I recommend it far above what our own group internal comms puts out”.

After failing to have the Donovans’ ownership of the royaldutchshellplc.com domain name removed in a legal challenge in 2005, Shell appeared to have taken the approach of ignoring the site for fear of raising its profile any higher.

However, Donovan fears the company had simply adopted different tactics.

In March 2008, the website faced a cyber “assault”.

“Someone was sending so many requests it kept on crashing it,” Donovan said.

Donovan said he complained to Shell about the problem and that the same day, the problem stopped.

Shell declined to comment about this incident but in a letter from Shell to Donovan, posted on his site, Shell denied any responsibility.

In recent years, heavy-handed corporate attempts to stem leaks have caused public and political outrage.

Personal computer maker Hewlett-Packard (HPQ.N) became the target of lawsuits, a U.S. Congressional inquiry and police investigation due to its efforts to stem leaks in 2005 and 2006.

HP hired investigators, who impersonated reporters, board members and employees to obtain private phone records.

Deutsche Telekom (DTEGn.DE) is the subject of a long-running investigation in Germany after allegations it spied on directors and journalists to find out who was leaking information to the press in 2005.

Prosecutors have launched a criminal investigation into corporate spying at Deutsche Bank (DBKGn.DE), which said in July that a detective agency it had hired had spied on people the bank deemed a threat.

Deutsche Telekom (DTEGn.DE) is the subject of a long-running investigation in Germany after allegations it spied on directors and journalists to find out who was leaking information to the press in 2005.

(Editing by Sitaraman Shankar)

((Reporting by Tom Bergin, +44 207 542 1029, tom.bergin@reuters.com, Reuters Messaging tom.bergin.reuters.com@reuters.net))

LONDON (Dow Jones)–Royal Dutch Shell PLC (RDSB.LN) will only have to top up its pension fund by around $5 billion, compared with previous expectations of $6-8 billion, because of the recovery in global equity markets, said Chief Financial Officer Simon Henry Thursday.

One of the U.K.’s biggest pension plans is moving forward with a strategy to invest hundreds of millions of pounds in alternative assets, potentially including hedge funds for the first time. The £10.6 billion ($16.8 billion) U.K. pension fund for oil company Royal Dutch Shell Group PLC agreed to a new strategic investment plan over the summer, according to a recent report to members of the pension plan.

It has come to our attention that former Shell executive Paddy Briggs (above) has been elected to serve the thirty-three thousand Shell pensioners in the UK as a Trustee of the Shell Contributory Pension Fund for four years commencing January 2010. In addition to the elected members, the Board of Trustees has seven Shell appointees, including UK country chairman James Smith and Clive Mather, the Chairman of the Board.

The manifesto on which Paddy Briggs was elected was:

“I joined Shell Mex and B.P. in 1964 and retired from Shell in 2002 having worked in Shell UK Ltd, Shell International and operating companies in The Netherlands, Hong Kong and Dubai. The Shell that most of us once worked for is long gone – as the “reserves” scandal and the recent furore over top executive remuneration have shown. Such events, coupled with the deteriorating financial position of many pensioners (which was exacerbated this year by a derisory 0.9% annual pension increase) illustrate the extent of the changes in Shell and confirm the urgent need for a strong defence of SCPF member interests by the one elected MNT Trustee directors. I was “First reserve” in the elections in 2007 and hope to go one better this time around. If elected I will do my upmost robustly to represent the interests of the Pensioner constituency and all other beneficiaries of the fund.”

We will quite understand that with Paddy concentrating on his new duties, he is probably unlikely to have the time to continue his insightful, candid and often entertaining contributions on this website. And he may also feel that it would be inappropriate to be an outspoken critic of Shell at a time when he has to work closely with senior Shell personnel in order to protect the interests of the members of the Pension Fund.  Over the years  Paddy’s  plain speaking and knowledge in his published articles, and his thoughtful comments posted on our Shell Blog, may have helped to persuade Shell UK pensioners that he is exactly the right person to represent them at this time. We wish him well.

Quite frankly, we have been surprised that Shell did not retain Paddy as a brand consultant given his continuing interest in Shell and invaluable marketing expertise. At least his fellow Shell pensioners will now benefit from the outstanding qualities which made him such a successful executive during his long career with Shell. And we are always here should Paddy feel that he needs a public platform again!

Oil giant Royal Dutch Shell pumped in €2 billion in rescue payments to its Dutch pension fund during the second quarter as it recovered to the 105% minimum funding level on June 30.

In December 2008, based on information provided by the website royaldutchshellplc.com, the Financial Times and other news organizations, including the International Herald Tribune reported the the Shell Dutch Pension Fund was substantially underfunded and that employee contributions would have to increase.

Shell said earlier this year it would need to increase contributions to its pension funds, after turmoil in financial markets decreased the value of their assets.