ERAFP’s Desfossés questions fossil fuel divestment lobby

first_img“You won’t reduce, on a global basis, the carbon intensity, if you are selling the stocks to someone else.”The chief executive said it was more important to wait for a time when a company was raising capital to bring about change.“At that moment, maybe you can exert some pressure,” he added.His comments come after collective action was taken by a number of charitable trusts and US endowments.To coincide with the recent UN Climate Change conference in New York, the coalition, led by the $860m (€680bn) Rockefeller Brothers Trust, said it would divest its fossil fuel holdings.Desfosses repeatedly said that while focusing on specific niches of an investment universe was viable for smaller entities, those with more than €10bn needed to examine the entire investment universe and seek to rectify any perceived flaws through its behaviour.ERAFP pursues a ‘best in class’ investment strategy, opting to focus on companies that perform well in select categories rather than actively divesting companies.Desfosses also criticised the laissez faire approach taken by the pension industry on matters of engagement.“The truth is, pension funds have been sleeping partners,” he said. “They did not engage, they did not vote sometimes – and this has to change.”He also echoed comments by Donald MacDonald, chairman of the Institutional Investors Group on Climate Change (IIGCC), by arguing in favour of institutional investment to better connect national power grids across Europe to minimise wastage.“We are focusing sometimes on very minor things,” he said. “That’s not to say wind farms are not important, but just an efficient grid in Europe could save a lot of energy and a lot of money.”Desfosses, also a board member at the IIGCC, said the group was arguing in favour of change, but that the European Commission had yet to implement the proper framework to attract investment, distracted by other matters. Activists lobbying US university endowments to divest from fossil fuel should reconsider their stance, as divestment does little to address a polluting company’s carbon output, the chief executive of French pension fund ERAFP has said.Philippe Desfossés, head of the €16bn supplementary scheme for civil servants in France, also criticised fellow pension investors for long being “sleeping partners” in failing to engage with firms, and echoed comments by a trustee of the UK’s BT Pension Scheme that pension funds could lower carbon emissions by financing a more inter-connected European power grid network.Speaking at a RobecoSAM conference near Zurich, Desfossés noted attempts by US student bodies to have their university endowment divest from fossil fuel companies and was critical.“If you want to lower the carbon intensity of your portfolio by selling your stocks, what does it mean for the guy who has to buy your stocks?” he asked.last_img read more

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Hermes secures Eurostar ownership for pension funds after UK sell-off

first_imgHermes Infrastructure has secured 10% of rail company Eurostar on behalf of several pension funds as the UK government sold off its stake in the company for £585.1m (€807m).The UK government owned 40% of Eurostar, as Hermes, the asset manager wholly owned by the BT Pension Scheme (BTPS), was joined by Canadian pension fund manager Caisse de dépôt et placement du Québec (CDPQ), which took on 30%.The pair created a shell company, Patina Rail, to secure the stake in the rail firm in a hotly contested deal that reportedly included other UK pension funds – the £41.6bn Universities Superannuation Scheme (USS) and the £5.5bn Lancashire County Pension Fund (LCPF).The £40.2bn BTPS seeded Hermes’s investment fund and took a stake alongside the £10bn Santander UK Group Pension Scheme and local government pension schemes (LGPS) for Dorset (£2.1bn), Cornwall (£1.4bn) and Barking and Dagenham (£654m). The remainder of Eurostar is owned by national rail agencies for France, Société Nationale des Chemins de Fer Français (SNCF) (55%) and Belgium, Société Nationale des Chemins de Fer Belges (SNCB) (5%).Both agencies have the option to block the purchase and acquire the UK government’s stake at a 15% premium.However, this is unlikely to occur, with SNCF and CDPQ already having an existing partnership in transport assets.Hermes said it expected the sale to be completed by the end of June.Hamish DeRun, a partner at Hermes Investment Management, said this was the fund’s first direct transportation asset, falling under its ‘value added’ strategy, giving investors exposure to GDP growth-linked assets.“Teaming up with CDPQ made sense because they bring a lot of experience in transportation assets and also in working with SNCF,” DeRun added.Antony Barker, director of pensions at Santander UK, said he was pleased with the investment in the Hermes fund, which came last year as Hermes announced commitments reaching more than £700m.He said the Santander pension fund supported the purchase through the fund and a segregated mandate with Hermes, leaving it with around 4% ownership.“It’s a good deal,” he said. “With a brand-new set of rolling stock about to be delivered and a franchise that extends through France and redevelopment of King’s Cross, we can only see demand increasing.”Hermes Infrastructure said it was approached by UBS, the investment bank brokering the sale on behalf of the government, regarding the sale.It then exclusively partnered with CDPQ after the Canadian investors approached the firm as a UK partner for the bid.“This demonstrates a lot of the characteristics of the infrastructure assets we are looking for,” DeRun said.He said Hermes expected to hold on to its stake for the long term, or at least for the life of the fund, an 18-year cycle.CNDQ has around CAD226bn (€161.5bn) in assets, with CAD10bn in infrastructure, and manages investment for 33 public, para-public and insurance companies in Quebec.It and SNCF have an existing relationship with a 30/70 split of transportation manager Keolis, a French firm operating globally.Macky Tall, senior vice-president for infrastructure at CDPQ, said: “Alongside leading industry players, we are becoming partners of a highly strategic asset that will generate stable and predictable returns. “This major investment is another opportunity for us to further build on our expertise in the transport sector.”The sale of Eurostar forms part of the UK government’s National Infrastructure Plan, involving more than £20bn of public assets by 2020.HM Treasury said the sale price was ahead of expectations and reflected the quality of the asset.last_img read more

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Master trusts must consider ESG impact of investments – NEST

first_imgThe National Employment Savings Trust (NEST), the UK auto-enrolment pensions provider, has said master trusts within the new, broader system of workplace pensions have a duty to take an active interest in where they invest and consider issues such as climate impact.Publishing its first responsible investment report, NEST said incorporating ESG factors into its investment process across all its retirement date funds and fund choices improved long-term returns and reduced investment risk for all its members.Mark Fawcett, NEST’s CIO, said: “Good-quality master trusts have a responsibility to take an active interest in where members’ money is invested and act on behalf of their members as owners of securities.“That means considering a broad range of investment risks and opportunities, including issues like the move to a low-carbon economy, the way corporations treat the planet and how companies conduct themselves.” The first report sets out how NEST engages directly with companies, regulators and industry bodies, and works with fund managers and other large institutional investors to increase effectiveness.It includes case studies showing how it aims to understand and act on a range of matters that have an impact on long-term returns, sustainable markets and good business practices.These include climate change and managing the transition to a low-carbon economy; banking culture and behaviour; the quality of company audits and the interaction between shareholders and auditors; and the role of pay in company performance.Fawcett said anyone who thought this type of consideration was not relevant to long-term wealth creation should consider the billions of pounds in fines and damages imposed on large sectors of the banking industry.“Companies that are well run, with engaged and active investors, are more likely to be successful in the long term,” he said.In the report, NEST said that, though most of its equity investments were now made via indexed funds, this did not mean it was “passive”.Unlike active managers, it said, it cannot sell its investments if a company is performing poorly, but it is able to be effective because it can “engage with a number of companies in a sector and feed back our findings industry-wide”.It said its aim was to raise standards across the whole industry.“From 2016,” it said, “where we don’t agree on issues we feel strongly about, NEST has the ability to override the voting intentions of our global equity manager.”last_img read more

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PBU investment chief exits as responsibilities shift

first_img“We have a strong but small five-person investment team, and we are going to add key staff here,” he added. The CIO of Danish labour market pension fund Pædagogernes Pension (PBU) is leaving after 14 years in the role, as the fund looks for a replacement who can take on a new, broader set of duties.Morten Schou resigned from his job as CIO, PBU (The Pension Fund for Early Childhood and Youth Educators) announced, but it added that he would continue working at the pension fund for a period as a consultant assisting in the transition.Sune Schackenfeldt, chief executive of the pension fund said: “In addition to sound and financially sustainable investment decisions, I have wanted to stress our need for strong leadership and management of processes, ESG  and investment risk.”These were requirements that today’s CIOs had to live up to, he said. PBU’s office in CopenhagenThe pension fund said Schou’s resignation was amicable and undramatic. For now, Schackenfeldt has taken on the role of acting CIO at PBU himself.PBU said an international executive search consultant had been hired to identify candidates for the position as CIO.PBU praised Schou’s work at the pension fund, and said he had built up a well-funded investment portfolio that had produced good returns for members. The fund had DKK69bn (€9.3bn) in assets at the end of June,The pension fund has adopted a particularly active stance to some ethical issues in recent years, notably introducing a code of behaviour for pension funds on tax ethics last June, and in November 2016 bringing in a “zero-tolerance” policy on its staff accepting gifts from banks or asset managers.last_img read more

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EFAMA adopts stewardship code to align with EU laws

first_imgThe European Fund and Asset Management Association (EFAMA) has integrated stewardship principles into a revised version of its Code of External Governance.EFAMA said it revisited the code, first published in 2011, to bring the language in line with the revised EU Shareholder Rights Directive (SRD) and current terminology.A new section was inserted to give more context about how asset managers should carry out their shareholder rights on behalf of their clients. It was also updated and amended to reflect the extended scope of engagement with investee companies, such as environmental and social concerns, compliance, culture and ethics, and performance and capital structure.EFAMA said the new code was designed to assist asset managers in adopting best practices in stewardship. “The EFAMA Stewardship Code highlights how, through stewardship, asset managers can encourage best business and management practices in companies on environmental, governance, human rights and social challenges,” the trade body said in a statement today.Stewardship covered the monitoring of, voting the shares of, and engagement with investee companies, EFAMA said. It was part of an asset manager’s fiduciary duty to protect and enhance clients’ assets, but also encouraged long-term value creation and long-term sustainability.The code is designed to be a guidance document, especially for asset managers seeking to comply with the revised SRD. This legislation came into effect in 2017 and EU member states have until June 2019 to implement it.It introduces an obligation for asset managers and asset owners to disclose a shareholder engagement policy and report on its implementation, or explain why they have not complied with these requirements.EFAMA’s new stewardship code can be found here.Germany ‘weakest for corporate board accountability’ Annual elections should be standard for company directors in Europe, according to State Street Global Advisors (SSGA).The asset manager carried out a study that found shorter director terms resulted in more accountable boards that were responsive to shareholder interests.The analysis was based on data from companies in 13 European countries. It found that the majority of them set legal limits on company board terms, but said these terms were often too long.Election cycles were more frequent in countries that introduced corporate governance codes imposing shorter term lengths, however, as these were adopted and adhered to by the majority of organisations, according to the asset manager.SSGA’s analysis found German corporates had the weakest board accountability, with directors standing for election only once every five years, in line with Germany’s statutory term limit. Germany was closely followed by France, Spain, the Netherlands and Belgium, where board terms are four years.The UK, Ireland, Switzerland and the Nordics were found to have the strongest board accountability, with one-year terms for directors.  Rob Walker, head of asset stewardship for the EMEA region at SSGA, said: “Without an annual director election process, shareholders are limited in their ability to hold directors accountable and improve board quality.“Furthermore, no matter how dissatisfied shareholders are, in some cases they have to wait several years to hold board members accountable. Changing these rules would provide an effective mechanism to fulfil our stewardship responsibilities and improve the quality of board oversight and company performance in the long term.”last_img read more

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South Yorkshire hires Schroders for £2.6bn equity protection mandate

first_imgEquity protection strategies are becoming increasingly common among funds within the Local Government Pension Scheme (LGPS) as volatility returns to the markets.In May this year, River & Mercantile Derivatives won a £1.2bn structured equity protection mandate from the £2.5bn Worcestershire County Council pension fund.Schroders has implemented what is known as a “put spread collar” approach, which combines equity investment with a mixture of puts and calls, thereby allowing the manager to gain upside exposure but dampen downside risk.“The rise in equity markets in recent years presents South Yorkshire, in common with many pension funds, with a new set of challenges to reduce the risk of negative market impacts while maintaining a focus on growth,” said George Graham, fund director of the £7.9bn SYPA. “This solution helps us achieve this in a cost-effective and transparent way.”The deal – thought to be one of the largest involving an LGPS fund – included setting up a bespoke pooled fund to help cut SYPA’s administrative and governance needs, Schroders said. A spokesperson for the investment manager said the company would seek to execute similar strategies for other LGPS funds.SYPA is a member of the 12-strong pool of pension funds that have formed the Border to Coast Pensions Partnership, itself one of eight pools established by members of the LGPS in England and Wales. The South Yorkshire Pensions Authority (SYPA) has implemented a £2.6bn (€3bn) equity risk management strategy with Schroders, designed to insulate the UK public sector fund against a potential equity market downturn.Schroders said the transaction aimed to both minimise overall costs and provide as “much upside potential as possible for SYPA”.The £450bn investment manager declined to comment on a more detailed breakdown of those costs.“The scope and complexity of this mandate emphasises the commitment of Schroders’ Portfolio Solutions team to work with clients to deliver bespoke strategies in order to meet their investment needs,” added Andrew Connell, head of the company’s portfolio solutions group.   last_img read more

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​Nordic quintet backs $1bn investment in US mid-market loans [updated]

first_imgAnders Stensbøl Christiansen, CIO at Velliv, told IPE: “We are investing in private market loans to these smaller US companies because they provide higher yields than broadly syndicated loans to larger companies, and because they typically carry lower default risk due to more conservative underwriting practices.”He said the partnership with Nuveen should deliver attractive risk-adjusted returns for its customers.“Private credit is an attractive alternative to the more liquid, traditional fixed income market for our portfolio,” he added.Per Frederiksen, head of Nuveen’s Nordics advisory business, said: “One thing we are focused on is that we don’t want to overburden Churchill – we want them to stay in the sweet spot they are in now.”Of the two unnamed Nordic institutions in the investor group, one is Danish and the other is a large Finnish pension insurer, he said. “TIAA knows what it means to be a long-term investor and has the same needs as these pension funds, including a balance sheet that is aligned with theirs,” Frederiksen said. “This opened a lot of doors – they need strong partners and not only do we have the management capabilities but we also provide our own capital.”The US middle market company sector was so large it equated to the third largest economy in the world when seen in isolation, according to Nuveen.Churchill Asset Management is a specialist middle-market US loans manager that was established in 2015.In December last year, PenSam struck a deal with TIAA and Nuveen to invest DKK1.2bn (€161m) in US private equity.This article was updated on 3 October to amend the fundraising target. It was amended again on 9 October to correct details about Churchill Asset Management. Five Nordic pensions institutions have allocated $550m (€475m) to a fund investing in senior secured loans to middle-market US companies.The providers include Denmark’s PFA Pension, PenSam and Velliv (formerly Nordea Liv & Pension Denmark), and the fund aims to raise $1bn in total.The fund has been created and is managed by Churchill Asset Management, a subsidiary of Nuveen, the asset management arm of US pension fund TIAA.The five pension funds acted as seed investors in the fund, which cannot be named due to US marketing restrictions. Nuveen said it was talking to other institutions about investing in the fund.last_img read more

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UK to replace audit regulator after damning review

first_imgThe FRC’s handling of the Carillion bankruptcy came under the spotlight last yearAccording to BEIS’s consultation, the new regulator is intended to:be a statutory body, giving it powers to make direct changes to accounts rather than apply to court to do so;conduct more “comprehensive, visible reviews for greater transparency”;have specific duties to “protect the interests of customers and the public by setting high standards of statutory audit, corporate reporting and corporate governance”;directly regulate the big audit firms; andbe led by a “diverse board and strong leadership” to help change the culture of the accounting sector and “rebuild [the] respect of those it regulates”.“This new body will build on our status as a great place to do business and will form an important part of strengthened public trust in businesses and the regulations that govern them,” Clark said. Investors victoriousInvestors have been lobbying for audit regulation reform for years, with the UK’s local authority pension funds among the most vocal.The Local Authority Pension Fund Forum, a lobby group representing 72 public sector schemes, first called for the FRC to be abolished in 2016 following a parliamentary consultation on corporate governance. The UK government is to abolish the country’s audit and accounting regulator, the Financial Reporting Council (FRC), after its governance and effectiveness was heavily criticised in a recent review.Business secretary Greg Clark yesterday announced that the FRC would replaced by a new body, the Audit, Reporting and Governance Authority, in line with recommendations made by Sir John Kingman, who led the review.The UK’s department for business, energy and industrial strategy (BEIS) published a consultation aimed at giving the new watchdog “a new mandate, new leadership and stronger statutory powers”, and said it “intends to move swiftly to implement these reforms and overhaul the sector”.In a statement yesterday, BEIS said: “In the interim period until the new regulator is in place, we will be working with the FRC taking forward 48 of the review’s recommendations to address the shortcomings identified in the review such as lack of transparency and to reinforce work to enhance enforcement activity.” Baroness Sharon Bowles has been a vocal critic of the FRCIt reiterated this call last year in its submission to the Kingman review’s call for evidence, citing as evidence hundred pages of documents released to IPE under the UK’s Freedom of Information Act.Baroness Sharon Bowles, a member of the UK parliament’s upper house and former chair of the European Parliament’s Economic Affairs Committee, has also criticised the FRC, claiming it was “fatally flawed in the way it was set up and has been operating”.New regulator ‘vital’Chris Cummings, chief executive of the Investment Association, said: “A high-quality audit is vital to ensure that investors have confidence in the information in a company’s annual report. The new regulator will be able to enforce greater sanctions on companies and management in cases of corporate failure, the BEIS statement said. The FRC came under fire last year in the wake of the collapse of Carillion, the dividend disclosures of which it had used as an example of best practice just 12 months before the firm went bankrupt. “A high-quality audit is vital to ensure that investors have confidence in the information in a company’s annual report”Chris Cummings, the Investment Association“The establishment of a new regulator that exists on a statutory footing will help drive standards in the UK audit market and cement the UK’s place as a global leader in corporate governance.“It is vital that the new regulator is established as soon as possible and reflects the views of investors, who are one of the key stakeholders in the audit process. We look forward to responding to the consultation and working with the government to ensure that the investor voice is properly represented within the new regulator.”Natasha Landell-Mills, head of stewardship at Sarasin and a member of the FRC’s recently appointed advisory committee, said: “We welcome the government’s announcement that it plans to press on with reconstituting the accounting and audit regulator.“It should go without saying the Financial Reporting Council is not the right body to lead its own reform during the period of transition and further consultation. The sooner the government refreshes its leadership the better.”The government said it would soon begin recruiting a chair and deputy chair for the Audit, Reporting and Governance Authority.Stephen Haddrill, the FRC’s chief executive, had already signalled his intention to step down in late 2019.last_img read more

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Bulimba waterfront home sells for $2.66m

first_imgThe home has high ceilings and is open plan.Ms Haddan said potential buyers were attracted to the fact the home had an entry-level price and was a waterfront property.“Having the boardwalk in front of the home makes it more affordable,” she said. The home at 41 Waterline Cres, Bulimba, sold for $2,660,000.A FAMILY has secured the keys to this Bulimba waterfront property.Place Bulimba sales agent Carla Haddan said the 41 Waterline Cres house sold for $2,660,000 within a fortnight of being on the market. One of the bedrooms at 41 Waterline Cres, Bulimba.About 30 groups inspected the property, with two written offers and one verbal offer received.More from newsCrowd expected as mega estate goes under the hammer7 Aug 2020Hard work, resourcefulness and $17k bring old Ipswich home back to life20 Apr 2020“It was bought by a family with a little child who had been looking in New Farm, Tennyson and Bulimba as they wanted a riverfront position,” Ms Haddan said.“They loved the Bulimba village feel, with the park and shops. It ticked all the boxes for the buyers, which resulted in a perfect storm for me.”center_img The kitchen at 41 Waterline Cres, Bulimba.The agent said there was not enough stock to keep up with demand, with agents often approaching owners of homes that aren’t yet on the market.“We work with our buyers to find something really for them and look at those properties that may not be on the market yet but may be ready soon,” Ms Haddan said.Video Player is loading.Play VideoPlayNext playlist itemMuteCurrent Time 0:00/Duration 2:28Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -2:28 Playback Rate1xChaptersChaptersDescriptionsdescriptions off, selectedCaptionscaptions settings, opens captions settings dialogcaptions off, selectedQuality Levels576p576p480p480p320p320p228p228pAutoA, selectedAudio Tracken (Main), selectedFullscreenThis is a modal window.Beginning of dialog window. Escape will cancel and close the window.TextColorWhiteBlackRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentBackgroundColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentTransparentWindowColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyTransparentSemi-TransparentOpaqueFont Size50%75%100%125%150%175%200%300%400%Text Edge StyleNoneRaisedDepressedUniformDropshadowFont FamilyProportional Sans-SerifMonospace Sans-SerifProportional SerifMonospace SerifCasualScriptSmall CapsReset restore all settings to the default valuesDoneClose Modal DialogEnd of dialog window.This is a modal window. This modal can be closed by pressing the Escape key or activating the close button.Close Modal DialogThis is a modal window. This modal can be closed by pressing the Escape key or activating the close button.PlayMuteCurrent Time 0:00/Duration 0:00Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -0:00 Playback Rate1xFullscreenBrisbane market wrap up02:28last_img read more

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Gold Coast property offers resort-style lifestyle

first_img40 Samuel Drive, Tallebudgera is for sale.IT’S described as the Gold Coast’s best acreage lifestyle and it’s not hard to see why.Welcome to 40 Samuel Drive, Tallebudgera — where you are surrounded by breathtaking scenery in the tightly held Kalimna Estate.Kay Blackburne bought the six-bedroom house in 2013, drawn to its outlook over Tallebudgera Valley and a seemingly endless list of luxury features. Back inside and the parent’s retreat, guest bedroom and media room are to one wing of the house.On the other wing is the formal dining room, cinema, kid’s retreat and three bedrooms.Other features include a study. Ms Blackburne said the house had lived up to her expectations.She said being from the country originally meant Tallebudgera was the perfect fit for her.“Living in this part of Tallebudgera allows me to experience the peace and tranquillity of country living, but I am still close to fantastic shops, great dining and of course, it is only minutes from the beach,” she said.“I am selling the home so that I can move closer to my family. It will be sad to sell this home as I have created so many beautiful family memories here.”The house is scheduled to go under the hammer later this month.Katrina Walsh of Harcourts Coastal is marketing the property. No expense has been spared in the design. From the front. A sight to behold.More from news02:37International architect Desmond Brooks selling luxury beach villa13 hours ago02:37Gold Coast property: Sovereign Islands mega mansion hits market with $16m price tag2 days ago Poolside entertaining. Fancy a hit of tennis?center_img “I wanted to have a large open plan entertainment area where I could watch my children and grandchildren play in the pool and on the tennis court from my kitchen,” the grandmother-of-six said.“I absolutely love playing tennis and so the tennis court is my favourite feature of the property. “The pool is fabulous for small children as it has a large lagoon area where small children can play safely.“As my grandchildren have grown older, the pool is huge and has plenty of space for them to swim.” The residence is nestled within the 4,604sq m block and faces northeast to maximise the sunlight and picturesque valley views.The kitchen separates the formal and casual living areas and overlooks the alfresco patio which provides plenty of space to fine, lounge, cook and entertain while taking in the pool and tropical gardens.“I love celebrating birthdays and Christmas in this home with plenty of space for everyone,” she said.“There is often a family game of cricket or table tennis played at my place. There is so much space on the property that there is plenty of scope to do a broad range of activities that suit all of the kids.” MORE NEWS: Mega mansion includes basketball court MORE NEWS: Enjoy a ‘Royale’ life on the beach Relax in the pool. Entertain inside or outside.last_img read more

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