Investor Profile
UK’s BTPS forges independent identity
Since splitting from its former inhouse manager, Hermes, the £50 billion British Telecom Pension Scheme has set about redefining itself. With a self-reliance borne of technology, the fund has brought portfolios and functions inhouse and started a bigger push into mature infrastructure.
Risk
Top-heavy populations imperil pensions
In the near future, age demographics may very well reach a critical tipping point as dwindling numbers of Millennials and other younger generations become inadequate to support the large cohort of retiring Baby Boomers – and economic growth won’t fix the problem, a UK pension expert has said.
Sustainability
Fixed income, ESG start to bond
ESG integration in fixed income is finally starting to happen but the challenges it presents aren’t the same as in equities; for example, bondholder rights and shareholder rights aren’t the same. Have a look at what’s necessary to further blend ESG and fixed income.
Organisational Design
The world’s most influential capital
The 100 largest asset owners have a huge worldwide impact. As global markets evolve, they’ll need proactive leaders, the right technology and good public policy to help shape a better economy.
Governance
Asset Owner 100’s wealth of influence
The sheer weight of money behind the world’s largest 100 asset owners represents a huge opportunity to show leadership in the allocation of capital. A Willis Towers Watson report reveals the 100 largest and which ones are meeting the challenge.
Investor Profile
MP Pension’s full embrace of ESG
The $17.4 billion Danish fund for academics is emphasising all three letters in ESG. Its portfolio is shedding fossil fuels as it advocates for diversity and plots a new sustainable strategy.
Asset Allocation
IMCO plots private, inhouse future
The C$60 billion ($48 billion) Investment Management Corporation of Ontario, the latest kid on the block in Canada’s pension scene, is planning its asset allocation 2.0, which will involve more private and direct investments, more internalisation and lower costs. Amanda White spoke to chief executive Bert Clark and chief investment officer Jean Michel.
Infrastructure
Don’t let fear keep Africa off limits
Investment in African infrastructure has the potential to provide favourable returns, along with opportunities to make a big social impact. Study up and look past the headlines, Mercer writes.
Fees
PennPSERS reports carried interest
PennPSERS has announced it pays its private equity GPs about 20 per cent of investment profits. The reveal from the $56.7 billion public pension fund, which came after a laborious process involving 500 staff hours, expands on its commitment to transparency.
Investor Profile
Alaska keeps C-suite interviews public
The $64.9 billion Alaska Permanent Fund’s new CIO interviewed for the role while the public watched and listened. A history of transparency at APF defies sovereign funds’ reputation for secrecy.
Sustainability
Big data, ESG ratings help find alpha
Companies that deliver on sustainability are starting to trade at a premium and investors need to shop for value. New research, by George Serafeim, professor of business administration, Harvard Business School, shows big data and ESG ratings can combine to find alpha.
Sustainability
Cbus benchmarks managers on climate risk
The $32.5 billion Australian superannuation fund has set emissions targets for portfolios and incorporated TCFD disclosure rules as it makes climate risk management a factor in awarding mandates.
Sustainability
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.
Sustainability
Time for a carbon tax: George Shultz
Economics professor George Shultz told delegates a revenue-neutral carbon tax would have corporate support and would be effective, during a discussion of US and global climate policy.
Asset Classes
South Dakota takes risk to bottom rung
The $14.2 billion South Dakota retirement system is sitting on cash and T-bills to hedge against equity-type risk seeping into its portfolio. The fund remains opportunistic and won’t rule out fossil fuels.
Asset Classes
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.
Asset Classes
Going direct puts wind in PFA’s sails
The $77 billion Denmark pension fund PFA has turned to direct investment for its alternatives, taking stakes with varying levels of risk in areas such as telecommunications and wind farms.
Asset Classes
CalPERS shake-up may delay PE plans
The surprise ousting of CalPERS board president Priya Mathur heralds a leadership shake-up that could place final approval of an expanded private equity program on hold.
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.
FIS Stanford
How the active complements the passive
Investors discuss the various ways that two styles often presented as if they are enemies in fact work hand in hand across portfolios to produce returns.
FIS Stanford
Taiwan epicentre of geopolitical risk
The China-US trade war is the latest development in a tense relationship that threatens to bubble over into war over Taiwan, “incinerating” portfolios, Stephen Kotkin said.
FIS Stanford
Investors feel banks’ lending pinch
Post-GFC regulation has driven up the cost of bank funding. Professor Darrell Duffie explained the impact of the end of ‘sovereign uplift’ and offered ideas to create competition and lower costs.
FIS Stanford
Machine learning’s risk/reward challenge
The availability of big data and cheap computer power is making machine learning a profit driver for businesses. A panel of experts discussed related risk-management and governance issues.
Asset Allocation
How to follow megatrends to success
The big themes that will fuel growth in coming decades are interconnected and subject to change. An expert panel gave advice on riding societal change to outperformance.
Asset Allocation
Hostplus wins with illiquid assets
The $25 billion Australian retirement fund for hospitality workers is able to invest in illiquid assets such as infrastructure due to its young membership. The approach has led to top-ranked returns.
Asset Allocation
TRS fuels up for energy surge
The $155 billion Teacher Retirement System of Texas is restoring its target allocation to energy, as experts see favourable conditions due to higher US oil production and continued reliance on fossil fuels. This is at odds with other investors divesting from fossil fuels.
Asset Allocation
Adventist Health’s risk appetite grows
The $6 billion Adventist Health System is considering more risk as it grows and is seeking to gain from efficient processes. The goal remains maximum effectiveness in provision of healthcare.
Strategy
Pensions must brace for Brexit impact
The chances of Britain leaving the EU without a withdrawal deal seem greater than ever. Retirement systems need to prepare for changing valuations and disruptions to how they do business.
Strategy
Sometimes, you can trust a hunch
Whether you call it a ‘gut feeling’ or ‘expert intuition’, under the right circumstances and in the right investment environment, it can take you in the right direction.
Strategy
Private capital opportunities grow
It’s been said the “public market is quickly becoming a holding pen for massive sleepy corporations”. This has investors taking more late-stage stakes in private companies as perceived risks ebb.
Strategy
Australia’s pension funds cricitised
As the fifth round of Australia’s financial services royal commission came to a close, counsel assisting criticised many retirement savings funds for their retention strategies, conflicts of interest and other practices deemed not in members’ best interests.
