Investor Profile
Texas Teachers revamps AA, adds leverage
The board of the $154 billion Teacher Retirement System of Texas has approved changes to its strategic asset allocation as a result of its latest five-year study, increasing its allocation to private markets, risk parity and introducing leverage.
Amanda WhiteAugust 22, 2019
Risk
Navigating two decades of funded status
The funded status of corporate DB pension plans has experienced unprecedented volatility in the 21st century. This article examines the sources of funded status volatility seen over the past two decades and discusses how plan sponsors of DB pension plans have adapted. It argues it is important to exercise care in the strategy that is chosen and in the timing of implementation.
Organisational Design
Diversity means embracing whole identity
Why even good inclusion and diversity policies will miss their mark unless corporates have a better understanding of their employees.
Investor Profile
South Carolina ramps up PE
The $31.3 billion South Carolina Retirement System Investment Commission has launched a co-investment private equity program in a bid to reduce risk and enhance returns. Partnering with Chicago-headquartered GCM Grosvenor, RSIC will tap Grosvenor’s own private equity deal flow, as well as introductions to the manager’s GP network.
Sustainability
Plastic pollution: A call to arms
Plastic production is projected to triple by 2050, yet only 14 per cent of plastic packaging is now collected for recycling. Consumers are beginning to reject the use of single use plastic and if this continues the financial impacts could be significant. So what is the role of asset owners in bringing this to light?
Real Estate
UTC and AEW build recipe for RE success
Industrial group UTC and global real estate manager AEW have structured a joint-venture investing in value-add real estate. In a relationship forged on trust and friendship, the allocation has grown to become the corporate pension fund’s best performing asset class.
Sarah RundellAugust 15, 2019
Private Equity
Is PE a superior form of ownership?
Almost exactly 30 years ago, a famous article by Michael Jensen in the Harvard Business Review predicted that private equity would “eclipse” the public corporation because it was a superior form of corporate ownership. Academics at Oxford's Said Business School examine whether this prediction has played out.
Peter Morris and Ludovic PhalippouAugust 13, 2019
Investor Profile
Danish fund cuts managers for better ESG
The €9.5 billion DanishPædagogernes Pension, PBU, is in the process of consolidating the number of managers in its listed equity portfolio. The decision at the fund - which has around 10 large, focused equity mandates - is linked to an ambition to reduce the number of companies in the portfolio in the belief that fewer companies in the 42 per cent actively-managed equity allocation allows greater ESG oversight.
Sarah RundellAugust 12, 2019
Investor Profile
The impact of technology on investments
Harshal Chaudhari recently sidestepped from his role as company-wide CIO at IBM, looking after $150 billion in pension assets, to a new role as the tech giant’s chief analytics officer. He spoke to Top1000Funds about the strategy he ran at the pension fund, his wider thoughts on the global economy and the impact of technology on the investment world.
Sarah RundellAugust 6, 2019
Sustainability
PRI announces awards shortlist
The PRI will announce the winners of its inaugural awards at the PRI in Person in Paris in September. The awards are one of two new initiatives aimed at showcasing leadership and increasing accountability as part of its Blueprint for responsible investment.
Amanda WhiteAugust 8, 2019
Sustainability
Investors’ role in sustainable food
Rising consumer awareness of health and environmental concerns has coincided with a boom in innovation and technology in the food sector. Investors have an important role to play in encouraging their investee companies to understand the scale of the shift and to adopt a strategy to leverage innovation and new technologies to drive long-term value creation.
Jo RavenAugust 6, 2019
Sustainability
A sustainability taxonomy for investors
The EU expert group for sustainable finance has published a taxonomy, or green encyclopedia, that gives guidance to investors looking to finance the transition to an economy in line with the Paris Climate Agreement. PGGM’s Brenda Kramer, who is a member of the EC’s sustainable finance technical expert group, explains how this could be a game changer in the long term.
Brenda KramerAugust 1, 2019
Sustainability
NY Common allocation review
The $210 billion New York State Common Retirement Fund is considering pushing its return target below 7 per cent as it embarks on a deep dive review of its asset allocation, a practice that comes around every five years.
Amanda WhiteJuly 18, 2019
Asset Classes
Are US co. profit margins sustainable?
US companies have some defensible profitability advantages but elevated margin levels may be poised for a reversal of fortune. The tide appears to be turning on some of the secular trends that have supported high US profit margins.
Celia DallasAugust 7, 2019
Asset Classes
Rediscovering FI at Nebraska
The $27 billion Nebraska Investment Council is conducting a deep dive into its fixed income portfolio, inviting up to 25 current and potential external managers to pitch their best ideas. The process begins by wiping any preconceived notions around the allocation’s role in the overall portfolio and justifying its place as if from scratch. It ends two years later with the issuing of mandates.
Sarah RundellJuly 19, 2019
Asset Classes
Size matters: diversity across factors
The size factor has recently come under attack from smart beta providers because its performance has lagged behind other factors. A common recommendation is to remove size from the factor menu, to give more weight to factors with better performance. But due to its low correlation with other factors, size offers substantial diversification benefits.
Asset Classes
SWFs get creative in infrastructure
SWFs are struggling to source deals in infrastructure as the demand is much stronger than the supply, so they are relying on new ways of investing in the asset class, mainly accelerating early-stage investments in renewable technologies, and with novel partnerships and co-investment structures.
Enrico Soddu and Victoria BarbaryJuly 11, 2019
FIS Cambridge '19
What can the past teach us?
Institutional investors' investment strategy should be serving the China middle class and the dislocation from within Asia, according to Stephen Kotkin,Professor of History and International Affairs at Princeton University speaking at the Fiduciary Investors Symposium at Cambridge University. He explored what the geopolitical conflicts of the past can teach us about the future. He looked at some of the key points in history, how China, the European Union and the US have survived, and what it means for the future.
Amanda WhiteMay 17, 2019
FIS Stanford
FIS Stanford Photo Gallery
View photos from the 2018 Fiduciary Investors Symposium, held at Stanford University, United States.
Amanda WhiteOctober 22, 2018
FIS Stanford
Rise of the unicorns: venture capital
The increase in privately held start-ups has piqued interest in venture-capital markets. The opportunities are there but investors must realise that technological innovation has changed the game.
Sarah RundellOctober 18, 2018
FIS Stanford
China’s enticing, challenging market
Inefficient markets and an explosion of technological innovation fuelled by Millennial consumers make China a tantalising prospect but accessing strong returns there isn’t as simple as it looks.
Sarah RundellOctober 12, 2018
FIS Stanford
Protecting human capital helps everyone
Investors have plenty to gain from helping to protect human rights in supply chains and managing the human costs during technological disruption and the transition to a low-carbon economy.
Sarah RundellOctober 12, 2018
Asset Allocation
Caisse Geneva’s approach to risk
The pension fund for the Swiss Canton of Geneva runs a fundamental investment strategy shaped around harvesting the premia. The fund's CIO, Gregoire Haenni, mindful of heightened risk in the equity allocation because of the late cycle.
Sarah RundellJuly 23, 2019
Asset Allocation
Evolving the City of Austin pension fund
Amanda White sat down for an hour-long fireside chat with David Veal, CIO of the $3 billion City of Austin Employees Retirement System. They discussed private equity, managing strategic relationships, internalisation and adopting Norwegian investment beliefs.
Amanda WhiteJuly 16, 2019
Asset Allocation
Winter is coming
Investors are preparing for the future and the inevitability that 'winter is coming' by reducing exposure to risky assets, the delegates at the RFK Human Rights Compass conference heard.
Amanda WhiteJune 26, 2019
Asset Allocation
CalPERS prepares for market dislocation
CalPERS' CIO Ben Meng is preparing for a market dislocation by ensuring the $354 billion pension fund has enough dry powder on hand to take advantage of a drawdown. A liquidity management action plan is a top priority for the fund.
Sarah RundellJune 24, 2019
Strategy
Risk aversion matters: life-cycle design
A key issue in life-cycle fund design is setting the right ‘glide path’ for switching from growth to defensive assets over time. As it turns out, risk aversion is far more important than pension fund balance. New research raises a note of caution over offering a single, one-size-fits-all life-cycle fund.
Geoff WarrenJuly 30, 2019
Strategy
Tough times greet new CalPERS CIO
Ben Meng isn’t easing into his role. The new CIO of CalPERS faces three new board members, a stressed private equity program and executive turnover, all under the pressure of a 70 per cent funded status and a maturing membership at the $340 billion fund.
Sarah RundellFebruary 26, 2019
Strategy
Value lies where precious data is stored
Organisations across the globe are collecting data, analysing and re-analysing it more and more every day. As this trend continues, data infrastructure – tangible or intangible – becomes increasingly attractive. Canada’s OPTrust cites this reality as the rationale behind the EdgeCore partnership. It thinks data is its own asset class.
James DavisFebruary 25, 2019
Strategy
Asset owners’ climate-change advice
A new guide, Climate Change for Asset Owners, provides case studies and other practical advice for how to get investor organisations focused on climate change, how to craft a related investment strategy and how to implement it. The publication includes content from 10 asset owners.
Amanda WhiteFebruary 6, 2019
