Following the expansion of its services to other European clients, Northern Trust has appointed John Cargill as head of depository services fore Europe, the Middle East and Africa.Cargill joined from HSBC in London, where he was head of trustee and fiduciary services.Northern Trust has named Alastair Hay as head of depository services in the UK.Hay has been working with the company since January, after he left NatWest as head of the trustee and depositary services division.Leading the company’s activities in the Netherlands is Stefan Kort, who joined from RBC Investor Services in Luxembourg.Before then, De Kort worked for ABN Amro and Mellon Bank NA.De Kort is supported by Margot Six, who left Bouwfonds Real Estate Management, part of Rabobank Group, where she was a senior legal counsel.Northern Trust added that Stephen Baker would be responsible for the overall operational management of its services in EMEA from Limerick.Baker joined Northern Trust in 2011, following its acquisition of Bank of Ireland Securities Services, where he was head of custody servicing.Northern Trust Global Fund Services provides custody, fund administration, investment operations outsourcing and ETF solutions.Worldwide, the Chicago-based company has €3.7trn in assets under custody and €591bn in assets under managemen Northern Trust is to expand its depository services in the UK and the Netherlands to support European fund managers implementing the Alternative Investment Fund Managers Directive (AIFMD).Also with the view of enlarging its services across multiple fund types, asset classes, fund localities and investment strategies, it has created five new senior positions across Europe.Northern Trust has been operating in Ireland since 2000 and Luxembourg since 2004, as well as on the Channel Islands.Toby Glaysher, head of global fund services at Northern Trust, said: “Our AIFMD pan-European depository capabilities are designed to provide the best in class services for our clients, enabling them to comply and take full advantage of the new regulatory landscape.”
In his report, Sir William Castell, chairman at the Wellcome Trust, said: “Danny Truell [the trust’s CIO] and his investment team continue to evolve our portfolio to ensure we have greater control of our destiny and that our long-term returns are driven more by the evolution of businesses than by short-term market fluctuations.”For example, over the past year, the trust – which does not invest in companies deriving a material turnover or profit from tobacco-related products –neither sold shares nor added any new holdings to its directly managed Mega Cap Basket of 31 holdings in large companies, valued at £3.4bn.Set up in late 2008, the basket has returned 55% on cost, the best performer being its £255m block of Marks & Spencer shares, which has returned 134%.A significant post-balance sheet development was the Twitter IPO, which resulted in a profit of $100m, from a stake of more than 1% in the company.A further $100m profit came from the sale of Wellcome’s stake in drug company Amplimmune to AstraZeneca.The report said market timing was an important tool for the fund.“Having significantly increased our exposure to public and private equity holdings in the period between 2008 and 2011, when many investors had become risk-averse, we have reaped the rewards in the last two years as they have again embraced risk assets,” it said.Equities in total account for 74.5% of the trust’s portfolio.The report added that, over the past decade, the trust had consistently managed to secure better returns than equity markets – 10% per annum versus 9% for global equities – while recording much lower levels of volatility.However, the largest contribution to equity performance came from the outperformance of strategies against their benchmarks.The report said: “The £612m internally managed Optionality Basket – which consists of companies whose operating performance and valuation appear to offer considerable upside potential given the underlying strength of their franchises – led the way, returning 47% and beating markets by 29%.”Turning to fixed income, the trust said: “Not owning bonds or commodities, which generally delivered negative or lacklustre returns, removed a potential drag on performance. Both nominal and real bond yields remain, in our opinion, too low as a consequence of financial repression, and we are unlikely to change our stance on bonds.”But it said investment opportunities might be more interesting in commodities.The real estate portfolio – 10.2% of assets – is made up 90% of residential property, which recorded another strong year.As for the immediate future, Wellcome expects asset returns to be weaker over the next five years – say in the high single digits – than they have been over the last five or 10 years.“Companies will continue to struggle to grow revenues, given the negative impact on the productivity of both labour and capital from continuing zero interest rate policies, which divert capital away from productive investment,” said the report, which also said equities now appear fairly valued.The report concluded: “Our response has been to concentrate our portfolio further to seek excess returns, which are driven by the success of individual assets, business models and partnerships over the long term rather than merely by market price movements.”More than 80% of the portfolio value is now concentrated in just under 100 directly held public or private assets or in external partnerships, each with a value exceeding $100m. The Wellcome Trust, the UK’s biggest charity, made a total return of 18% on its investment assets for the year to 30 September, thanks partly to counter-cyclical action in previous years, according to its annual report.Returns were £2.6bn (€3.1bn) on a portfolio worth £14.5bn at the start of the year, with investment assets now worth £16.4bn.The trust – whose main activity is funding medical research – said it had enjoyed positive returns from each major element of its portfolio – public equities, private equities, venture capital, hedge funds and property – over one, three, five and 10 years.All those asset classes recorded gains of between 15% and 20% over the past year.
Sarah Smart, chair of the trustee board, told IPE that if managers were carrying out work intended to benefit their clients in 10-15 years’ time, bonuses should be structured for a similar term.“We have bonuses and long-term incentive plans being paid after three years,” she said. “I don’t understand why bonuses cannot be deferred even when an executive has left the company.“At the moment, it is possible for managers to bank long-term fees on an annual basis, but if everything crashes after five years, they still get to keep the money.”Smart said performance fees needed to be properly structured to align remuneration with the long-term effects of the investment strategy.The radical reformation of manager fees to better suit clients’ interests have been mooted before, and not only by asset owners.Kirill Ilinski, co-founder of hedge fund Fusion Asset Management and a former options trader at JP Morgan, reckoned performance fees ought to be escrowed until a client redeems, and the whole amount remains at risk to cover losses in the meantime.The manager then, not the client, always takes the first loss as long as there is cash left in escrow.But another major UK pension fund’s in-house manager selector doubted that performance fees were the answer for long-only active managers at all.The selector, who asked for anonymity, said that a sharp move would distort the market.“By shifting the commercial risk towards the managers, you would probably lose a lot of niche players from the field. The big houses would soak up the extra cost, but is that what we want?”The source said performance fees generally were to be avoided: “Why would you want to pay extra? When it comes to fees, we are realists.”Steven Robson, head of pensions at United Utilities for its £2bn fund, agreed, and suggested that penalising underperformance could lead to different behaviours negative for the fund.“If you are looking for a high return for higher risk, then underperformance penalties could make the manager more cautious, and possibly more likely to meet the benchmark but less likely to meet the performance target,” he said.“Manager fees should be set with the aims of the fund in mind. Performance or underperformance fees are fine as long as these are set at a level that should align the behaviour of the manager closer to the aims of the fund.”Barry Parr, co-chair of the Association of Member Nominated Trustees and director of the Orange Pension Scheme, supported the contracts, but said an agreed floor – to ensure the manager can survive – would be necessary.“Otherwise, they could theoretically lose all concern,” he said. UK pension funds have given mixed views on calls from two of Netherlands’ largest schemes to penalise asset managers for poor performance.PFZW, the pension fund for the care and welfare sector, said it wanted to see punishments built into contracts to trigger a fall in fee levels when managers underperform.ABP, the public sector fund, backed this assertion and suggested it wanted to work together with PFZW to formulate a plan.The chair of the £5.7bn (€6.9bn) Pension Trust, the industry-wide fund for UK charities, waded into the row by calling for greater alignment between managers and clients.
Denmark’s largest commercial pensions provider PFA Pension has said a rise of around 14% in Danish share prices in the first three months of the year drove unit-link product returns higher.Reporting initial figures for first-quarter investment performance, PFA Pension said its unit-link PFA Plus product produced returns of 2.8% after costs and including the shared customer capital (KundeKapital) bonus.This compares with a 3.7% return reported for the first quarter in 2013.Jesper Langmack, director at PFA Asset Management, said: “The main reason PFA has done well this year is that it has a large exposure to Danish shares relative to competitors.” PFA’s Danish shares increased by about 14% in the first quarter.Around 17% of PFA’s investments for unit-link products with high-risk profiles are held in Danish equities, with the company’s total Danish equity investments standing at more than DKK12bn (€1.6bn).Investments in corporate bonds also performed well in the first quarter, providing a return of 3.4%, which benefitted customers opting for lower-risk profiles, Langmack said.However, he said that when the market was volatile, as it had been in the run-up to Easter, it was important to look at it closely in order to act fast and take advantage of opportunities.“What was the right strategy in the first quarter is not necessarily the right one for the rest of the year,” he said.Meanwhile, Sweden’s occupational pensions provider AMF reported investments returned 2.2% in the first quarter of this year, down from 3.3% in the same period last year. The solvency ratio increased to 212 by the end of the March from 200 the same time last year.Peder Hasslev, head of asset management, said: “The start of the year was characterised by a degree of caution about where the global economy was heading.”He also cited a continuing expectation that the economy would improve given that geopolitical events had not put a spoke in the wheel.Group profit fell to SEK4.7bn (€520m) by the end of March, down from SEK19.8bn at the same point last year. The company said SEK7.2bn of this decline was due to changes made to the discount rate used to calculate liabilities.Premium income fell to SEK9.6bn from SEK10.2bn, and total assets rose to SEK466bn from SEK426bn.AMF is jointly owned by the Swedish Trade Union Confederation (LO) and the Confederation of Swedish Enterprise.In other news, Danica Pension said reported contributions from domestic customers rose by 11% in the first three months of this year to DKK5.6bn, with business growth helped by sales through the Danske Bank network.The company, which is a subsidiary of Danske Bank, made a pre-tax profit of DKK454m in the first quarter, up from DKK385m in the same period a year before.Managing director Per Klitgård said he was satisfied with the result, and noted in particular that the technical profit had risen to DKK419bn from DKK384m“This emphasises strong development in our business,” he said.Klitgård said the rise in contributions in Denmark was due to a significant level of one-off contributions, as well as a general increase in business.He said Danica Pension’s cooperation with Danske Bank continued to go very well, with contributions through this channel rising by 50% between the first quarter of last year and the latest reporting period.Contributions overall climbed 3% to DKK7.8bn in the first quarter from DKK7.7bn in the same period last year.However, within this, contributions in Sweden and Norway fell by 14%, Danica said, but it attributed this decline to very large one-off contributions booked in the first quarter of 2013.“Danica Pension still expects contributions in the Nordic business to develop positively in 2014,” the company said.Danica’s unit-link pension products made returns of 1.5% to 2.6% in the first quarter, while the traditional with-profits pension product returned 3%.Total assets rose to DKK333bn from DKK327bn.
Research project staff wrote in a paper presented to IASB members: “To consider a measurement model fundamentally, we may also consider issues relating to discount rates and attribution of benefits.”And speaking during the 22 September meeting, IASB member Stephen Cooper indicated his support for a comprehensive review of pensions accounting.“I think that’s the only way to go,” he said.The former sell-side analyst continued: “If you try and do contribution-based promises, as we’ve discovered in the past, it just becomes impossible, and you get these bright lines.“The only way to solve this is to look at the whole range of things.“We don’t need to understand all of the different plans out there.“We obviously have to have an understanding of plans in sufficient detail, but I wouldn’t say … go off and identify every single one of these things.”In their introduction to the board, staff noted that they “have not yet decided” whether they should publish a discussion paper.They do, however, plan to issue a research paper during 2015 to explore a “conceptually sound and robust measurement model” for pension plans, and the cost-benefit analysis of any such accounting model, given recent trends in plan design.Staff also explained that if the research paper identifies “enough evidences [sic] to consider a fundamental amendment to [IAS19], we may propose to publish a Discussion Paper.”In addition, the staff could identify issues that it would be appropriate to deal with through the post-implementation review of IAS19 that is slated to take place during 2016.The IASB – and also its interpretative body, the International Financial Reporting Standards Interpretations Committee (IFRS IC) – has a long history on the subject of pensions accounting.IAS19 currently addresses two types of retirement promise through its focus on DB and DC plans.In the case of the latter, it simply requires sponsors to expense plan contributions as they are incurred.With DB promises, however, it applies the so-called projected unit credit approach.This requires preparers to project forward using a scheme’s benefit assumptions to arrive at a projected liability, and then discount back using a AA corporate bond rate to reach a net present value.The IAS19 methodology has failed to address, however, the rise in so-called intermediate-risk plans or contribution-based promises.Such plans have proliferated in recent years with the move among employers to derisk their pensions exposure.The IASB attempted to tackle the issue with a discussion paper in 2008.This document was largely panned by commentators who argued that its proposals were difficult to apply and dragged too many plans into a new fair-value measurement approach.The decision to abandon the discussion paper proposals led the board to issue instead a series of targeted revisions to IAS19 in 2011.These amendments left unaddressed how entities ought to account for contribution-based promises.Since 2011, the IFRS IC has attempted to offer guidance to preparers by exploring a solution to the challenges presented by DB plans with a guaranteed minimum return.The committee was forced, however, to abandon its work.IFRS IC member Tony de Bell said: “To be honest, I’m not sure you can resolve it without addressing the broader aspects in [IAS]19.” The International Accounting Standards Board (IASB) could be about to embark on a radical shake-up of pensions accounting with wide-ranging implications for sponsors of both defined benefit (DB) and defined contribution (DC) retirement plans.One option mulled by the London-based standard setter during its 22 September meeting is to scrap International Accounting Standard 19, Employee Benefits (IAS19), and replace it with a single, principles-based accounting model for DB and DC plans.Any such move would open up a public debate about the correct basis for discounting pension promises.Board members signalled their strong support for the staff to continue with their research into the topic.
New Capital – John Leahy has been appointed as a UK equity fund manager for the active investment manager. Leahy joins from Hermes Investment Management where he ran a UK small company strategy. Leahy will be based in London and responsible for New Capital’s UK equities offering.ASR Real Estate Investment Management – Edwin van de Woestijne has been appointed as managing director of commercial real estate and manage the ASR Dutch prime retail fund. He will join the firm in October from Bouwfonds Investment Management, where he was head of asset management. Van de Woestijne will also join the management team at ASR.Cardano – Phil Redding has been appointed as UK head of business development for the Dutch investment advisory and fiduciary management firm. Redding was head of business development for EMEA at Aviva Investors and joins Cardano’s London office. Prior to Aviva Investors, Redding held pensions roles at Credit Suisse, Zurich, CIS and Scottish Mutual. LPFA, Columbia Threadneedle, New Capital, ASR, CardanoAP3 – Kerim Kaskal, CIO of the Swedish buffer fund, is to leave after two years in the role. Having worked at Nektar Asset Management and Brummer & Partners, he will leave AP3 at the end of October to set up his own fund management business. London Pension Fund Authority (LPFA) – Merrick Cockell has been appointed as interim chairman of the London local government pension fund after the resignation of Edi Truell. Cockell has been deputy chair since 2013 and on the board since 2010. Truell resigned to lead an advisory board for the LPFA’s collaboration with the Lancashire County Pension Fund. Cockell is also chairman of the UK’s Municipal Bonds Agency, set up to allow local councils to find a way to raise capital from private markets.Columbia Threadneedle Investments – Jeremy Smith has joined the asset manager as its head of UK equity research. Smith will join the firm in September and will lead the UK research term, including recently appointed analysts Phil Macartney and Sonal Sagar. Smith joins from Liberum Capital where he was in the equity sales team.
Winfried Bischoff, chairman of the FRC, said the code had helped raised the profile of stewardship since it was first launched in 2010, leading to improvements in the “quality and quantity” of engagement.“We wish to maintain momentum by ensuring that signing up to the Stewardship Code is a true marker of commitment,” he added.More than 80 asset owners are signatories to the Stewardship Code, a list of names largely comprising UK pension funds and charitable foundations, such as the Wellcome Trust but also including the Ontario Teachers’ Pension Plan and Sweden’s AP1.The code, which operates on a comply-or-explain basis, has been emulated in several other jurisdictions.The International Corporate Governance Network recently confirmed it was working on a global version. Pension funds and asset managers will soon be assessed and rated on their level of engagement with the UK’s Stewardship Code, in an effort by the regulator to boost commitment among signatories.The Financial Reporting Council (FRC) said it would divide signatories into two tiers – those meeting reporting expectations and those failing to do so.Under the plans for public tiering, which the FRC said would be in place from July 2016, asset managers will be asked to provide evidence on how they have complied with the code.“The FRC will look particularly at conflicts-of-interest disclosures, evidence of engagement and approach to resourcing and integration of stewardship,” the regulator said.
It is not for the Commission to set up a one-size-fits-all, he stated, as if apologetically. Then he referred to the Commission’s holdback on any rules to limit the wattage of the kettle, used to heat the water for the legendary cuppa. As the story of the ‘hot-button’ issue put out by the Brexit ‘Out’ movement goes, any limit on power and liberty will have to wait at least until after the UK chooses its fate, on 23 June. In other words, the Commission has put its foot on the brake-pedal, which would have prevented electric surges through under-sea cables from Continental Europe into the UK. This can be when the tea-drinkers dive to their kitchen kettles at, say, half-time during a TV broadcast of a football match.However good that story may be, the likely truth is that the Brussels’s environmental people had no firm plans but were only just thinking about some restraint on the kettle, some of which can be rated up to 2,900 watts. Nevertheless, the new Brussels ‘humble pie’ position certainly does ring true. One Commission source talks of better regulation principles, which “include not taking decisions at EU level that unnecessarily meddle in people’s daily lives”. The tone certainly colours official thinking on the Prospectus Regulation, published last 30 November (2015) and now passed on to the European Parliament and the Council of the EU “for discussion and adoption”. The Regulation is to replace the existing Prospectus Directive of 2003 (and with antecedents going back to 1980) to cover when securities are offered to the public or admitted to trading. Describing the proposed reform, the Commission describes it as the “gateway” for issuers to gain access to the European capital markets.Still, logically, it says the rules will provide investors across the European Union with “the same level of information on companies that want to raise capital. Aligning disclosure standards aims to make it easier to invest cross border”. The Commission goes on to report that the Regulation will enable SMEs “in particular” to find it easier to raise funding when issuing shares or debt. Perhaps the new deference to Mr Average Citizen contributed to opportunist protests aired at the conference. Speakers were upset at EU plans for a threshold limit for a prospectus for capital needs below €500,000 (up from €100,000). The Commission says this relief gives “breathing space” for SMEs.However, an unsatisfied Chris Muyldermans, of bank KBC group, pooh-poohed the threshold. This “should be debated”, she told the conference, organised by QED. She’d like the sum to rise significantly. Rather than relying on the prospectus, when investing, she simply wants to know from an SME prospect what they need the money for, and other basics.On the same track, Dierdre Somers of the Federation of European Securities Exchanges suggested an SME exemption for any sum less than 10-20% of its capital. And Michael Collins, deputy chief executive and public affairs director at InvestEurope, formerly the EVCA, warned that, “If we want unicorns – i.e. emerging companies with $1bn valuation – in Europe, then we have to be able to fund them, including via equity markets.” On the other hand, Arjun Singh-Muchelle of the Investment Association stated: “If you want to play with the big boys, you’d better behave like a big boy.” By this, he meant companies applying for large-scale funding should accept appropriate rules.Modern man may look back in bewilderment at the Roman Empire’s seeking guidance from chicken entrails prior to battling with the barbarians. He could also marvel at the world’s largest economy being distracted by the humdrum cuppa when striving to put its economy to rights. Jeremy Woolfe laments the EU economy’s being distracted by a humdrum cup of teaA cup of tea – the Englishman’s beloved ‘cuppa’. Nothing to do with the EU’s cross-border investment prospects? But it has – and quite a lot.In fact, the EU hierarchy has to take into account anything – anything – that might have the slightest effect on the forthcoming Brexit vote. Sounds daft? But “anything” includes even the drink that cheers but does not inebriate. Behind this, it is clear Brussels is running scared of the UK’s in/out referendum. Hence, even the serious matter of the new Prospectus Regulation, an important component in the EU’s Capital Market Union programme, has to be tailored with the Brexit risk in mind. At a presentation of the regulation, self-deprecation by the rule-maker clearly reflected the tone. The Commission has “learned its lesson” (about accusations of over-regulation), senior official Tilman Lueder said at a conference entitled ‘EU Prospectus Regulation: Striking a Balance’.
The role ESG factors play in investment decisions will also depend on the asset class, said aba.A recurring point in its submission was the implications for investment along ESG lines of the structure of workplace pensions in Germany.This is one where the IORPs (institutions for occupational retirement provision) “are always linked to a sponsoring employer and sometimes in addition to social partners of a special industry”.The aba said: “The sponsoring employer might already have an ESG strategy in place that will then have an impact on the investment strategy of the IORP.“In addition, the field in which the sponsoring undertaking operates will influence ESG decisions – for example, the IORP of a company running a nuclear plant will not put nuclear energy on a negative list.”According to the aba, the main reasons why institutional investors and asset managers take ESG factors into account in their investment decisions are risk management, alignment of investment policies with the beneficiaries’ long-term interests, pressure from the investors’ clients and reputation.The latter two could lead to greenwashing, said the association.The answers were chosen from a multiple-choice list, although ‘reputation’ was a free input from aba.Reliability, usefulness, availability and cost of information/data is an issue when it comes to ESG matters, according to the association.“Different actors analyse the issues and publish the information in different ways, making it difficult to compare,” said aba. “In addition, most research is equities focused.”The association also raised the risk of “greenwashing” by companies in this context, noting that it might occur “in areas where it is difficult to measure improvement”.ShareAction, a London-based responsible investment charity, yesterday published a survey indicating that lack of data was preventing institutional investors from incorporating the UN’s Sustainable Development Goals (SDGs) into their investment process.German investors were among the respondents.The UN-backed Principles on Responsible Investment (PRI) are “a good starting point” for many investors looking at long-term risk assessment, said aba.However, the most important directive for occupational pension funds, according to the association, is the IORP Directive, and it “should be kept in mind”.Fiduciaries ‘busy people’ A revised IORP Directive is in the process of being negotiated by the European Council, the EC and the European Parliament (EP), with the EP’s proposed version mandating the integration of ESG factors in fiduciary duty.The aba is against this and reiterated its position in this latest consultation response.“To avoid uncertainty for IORPs and sponsoring employers and to allow them to address the challenges they currently face,” it said, “the review of the IORP Directive should not lead to additional regulatory changes in this field.”In Germany, overall interest from beneficiaries in ESG matters “is perceived to be relatively low”, said aba.Still, external events such as the UN climate change conference in Paris and scandals, such as about investing in cluster bombs, can trigger individuals to contact their pension scheme, noted the association.Asked about barriers to more integration of medium to long-term risk indicators, including ESG matters, into investment decisions, aba identified five factors that affect investor behaviour in this area.These included “fear of a lower return, reduced investment universe, higher costs, the fact many ESG factors are not specific and a lack of human resources”.“In addition,” it says, “day-to-day investment decisions are often outsourced to external asset managers, with the investors not providing additional indicators relating to ESG factors.”Investment consultants, said aba, “almost never, unless it is already included in the concept”, consider an asset manager’s approach to ESG issues and active asset ownership when advising institutional investors about selection of managers.Elsewhere, it said “fiduciaries are busy people, and ESG is not a priority”, citing a 2006 and 2015 updated report from Freshfields on the matter.Sustainable and long-term economic growth is a pre-occupation for many European policymakers, who are trying to recruit the financial sector, in particular institutional investors, to play a greater role in unlocking the investment needed to achieve this aim.The EC’s consultation, for example, builds on the ‘Communication on Long-Term Financing of the European Economy’ and the Commisson’s Capital Markets Union action plan. In the UK, meanwhile, a fresh initiative came from the Investment Association, which yesterday launched an action plan aiming to solve the country’s “productivity puzzle” and fostering long-term investment thinking. Environmental, social and governance (ESG) factors have “taken a back seat” at German occupational pension funds amid the prevailing low-interest-rate environment, the country’s industry association has said.Responding to a European Commission consultation on long-term and sustainable investment, aba said “the security of the investment that achieves the necessary return is more important for investors than ESG factors” and that some investors did not therefore include ESG factors in their investment decisions.“Their primary responsibility of strategic investment decisions is to maximise the returns to fulfil the pension commitments for the members,” added the association, which represents German occupational pension funds.“Other priorities are a reasonable mix and diversifications of the assets, while maintaining an adequate level of liquidity. Investors often fear the higher costs of ESG research.”
Shane Feeney, managing director and head of direct private equity at CPPIB, said: “Hotelbeds is a unique opportunity to invest in the leading operator within the hotel accommodation distribution market, an industry that has strong long-term prospects that will support continued growth.”The bedbank business generates most of the Mallorca-based company’s profitability, with double-digit volume growth in both its hotel portfolio and room nights over the past five years.Jorge Quemada, partner at Cinven, said there were “considerable growth opportunities” in Asia, as well as through further investment in Hotelbeds’ IT systems.Quemada said the wholesale hotel accommodation market remained “highly fragmented”, with further market consolidation likely. The Canada Pension Plan Investment Board (CPPIB) and private equity firm Cinven are investing in a Spanish hotel bookings company for nearly €1.2bn.The joint venture is buying the Hotelbeds Group – a wholesale “bedbank” for the travel industry – from the Tui Group.The company, which employs 6,150 staff, offers hotel rooms to travel agents and tour operators from its inventory of 75,000 hotels.The companies said an expected increase in global hotel bookings and a continued shift from offline to online bookings were reasons behind the investment.