Sustainability
Behind BlackRock’s climate pledge
Last week BlackRock’s Larry Fink announced the company would put climate change centre-stage across its $7 trillion portfolio after what critics have called years of prevarication. Sarah Rundell looks behind what the statement could mean in practice.
Sarah RundellJanuary 22, 2020
Opinion
Opportunities in Chinese healthcare
Sam Radwan, an expert in China's healthcare sector, and co-founder of Enhance International a consultancy that advises Chinese insurers, discusses the driving forces behind the sector.
Investor Profile
External equity: A worry at Wellcome
The £26.8 billion Wellcome Trust continues to reduce its allocation to external equities managers as the investment committee focuses on currency exposures, ESG and hedge funds,the impact of low interest rates and the position of the credit cycle in 2020.
Sustainability
Australia’s climate emergency
In the midst of the worst bushfires in Australia's history, CEO of the PRI, Fiona Reynolds, an Australian living in London is calling on investors to play a leading role in encouraging governments to be ambitious in their climate policy.
Asset Allocation
Why benchmarks matter
The choice of benchmarks is one of the most fundamental decisions that investors make, but the time and respect it gets in the investment process is under-valued according to CIO of Verus Investments, Ian Toner, who explains why investors should care more about benchmark selection.
Fixed Income
APG China strategy: In-house with E Fund
APG's capacity to carry out its own research has meant it is ahead of the curve in allocation millions to its first local currency China fixed income strategy. APG is also setting itself up to be a catalyst for change and aims to set new standards on ESG in China.
Sarah RundellJanuary 15, 2020
Investor Profile
CalPERS board’s divestment dilemmas
The merits of tracking divested dollars, and the value of data illustrating what the pension fund has missed out on was the topic of much debate at the December CalPERS board meeting. In 2021 the fund will review six divestment programs across tobacco, firearms, coal, Iran, Sudan and emerging market equity principles.
Sarah RundellJanuary 14, 2020
Sustainability
Investors and climate in 2020
As global temperatures rise, so does investment risk. Investors cannot afford to ignore climate change in 2020, says CEO of CDP, Paul Simpson
Paul SimpsonJanuary 13, 2020
Investor Profile
Insurance giants push for more impact
The experience of the collaboration between six large US insurers to successfully invest in affordable multi-family rental housing is a lesson for any institutional investor looking to impact investing.
Sarah RundellJanuary 12, 2020
Manager Relationships
KLP shows the active side of passive
Norway’s fund for local government employees and healthcare workers, KLP, abides by strict internal ESG principles. Sarah Rundell looks at how this translates to investments in emerging markets, its view of indexes and a concentration of manager relationships.
Sarah RundellNovember 27, 2019
Manager Relationships
Washington State’s secret sauce
A big contributor to the long-term top decile performance of the Washington State Investment Board has been its high allocation to private markets. But it is not just the high allocation that sets the fund apart from its peers, it’s also the nature of the relationships with its GPs. Amanda White speaks to retiring CIO Gary Bruebaker about the fund's secret sauce.
Amanda WhiteNovember 6, 2019
Manager Relationships
Nest picks managers most able to adapt
More than 40 asset managers were shortlisted for a private credit mandate for the £8 billion UK DC plan, NEST. It chose three. Sarah Rundell looks at the process and structures, and what the fund looked for in a manager.
Sarah RundellOctober 31, 2019
Manager Relationships
Looking less at the scoreboard
Traditional performance monitoring reports do more harm than good, argues Phil Edwards, who suggests a more effective monitoring framework shifts the focus away from performance numbers and towards the fundamental characteristics of the stocks held in the portfolio, perhaps borrowing some elements from private markets.
Phil EdwardsOctober 30, 2019
Sustainability
WeLose: a failure of dual class shares
The failed IPO of WeWork is a good case study in the corporate governance flags that show up in the pursuit of a dual class share listing.
Eugene HsiaoJanuary 7, 2020
Sustainability
Long-term investors using short-term strategies
There is a contradiction in the way that many long-horizon asset owners behave. On one hand, they are increasingly concerned about the externalities imposed on wider society by the companies they own. But on the other, they tend to ignore the social costs imposed by the short-horizon strategies that they employ such as momentum and tracking error constraints. The transmission mechanism for this social cost is via asset mispricing, which leads to capital misallocation and incentives for CEOs to focus on short-term share price maximisation.
Phil EdwardsJanuary 7, 2020
Sustainability
New CFA chief outlines the year ahead
The new chief executive and president of the CFA Institute, Marg Franklin, completed her first 100 days in the job last week and already she’s made an impact. Amanda White spoke to her about the organisation’s influence in the decade ahead.
Amanda WhiteDecember 19, 2019
Sustainability
Call to trustees: Stand up to managers
The largest asset owners should care about the stewardship difficulties facing asset owners with less than £20 billion in assets.
Janice TurnerDecember 18, 2019
Equities
Active US large cap adds nothing
Active investing in US large caps has detracted value from US pension fund portfolios and exposures should be indexed, according to new research by CEM Benchmarking. This could result in huge cost savings and have implications for how pension funds spend their active budget.
Amanda WhiteNovember 29, 2019
Equities
Strategic factor investing
Institutional investors should consider factor investing as a strategic decision, according to a new paper from Dirk Broeders at Maastricht University and Kristy Jansen from Tilburg University.
Amanda WhiteOctober 4, 2019
Equities
Is factor investing still working?
A large number of long-only multi-factor strategies have performed disappointingly over the past three years. Some have called into question the usefulness of solutions based on factor diversification but recent research by EDHEC suggests this doesn’t hold up against an even remotely serious investigation.
Daniel Aguet, Noël Amenc and Felix GoltzSeptember 20, 2019
Equities
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
FIS Harvard 2019
Modern slavery needs investor action
Asset owners and managers can help solve modern slavery and invest to stem the suffering of the 40.3 million workers in the world trapped in some form of labour abuse.
Sarah RundellDecember 11, 2019
FIS Harvard 2019
Impact investment continues to evolve
Impact investment and its combination of financial returns and social or environmental purpose is beginning to move from fringe to the financial mainstream in part because the long-held concept that investment should only maximise shareholder value is beginning to fade.
Sarah RundellDecember 5, 2019
FIS Harvard 2019
SDG 16: How to invest in peace
Investment in the 17 SDGs is growing, but SDG 16, and its call to promote peaceful and inclusive societies for sustainable development, gets the least investor attention. Yet the idea that investors can mobilise their capital to nurture peace is wholly possible.
Sarah RundellNovember 27, 2019
FIS Harvard 2019
Biomedicine’s long and risky road
Startlingly few institutional investors have allocations to life sciences. An informal poll of 85 asset owners from 20 countries responsible for a combined $9 trillion assets under management gathered at the Fiduciary Investors’ Symposium at Harvard University, found only a tiny handful active in the sector. Yet allocating to biotech makes an important contribution to society - investing in the sector can help change lives.
Sarah RundellNovember 20, 2019
FIS Harvard 2019
CalPERS hunts for third pillar PE teams
CalPERS is conducting searches for outside partners to run its new Pillar III private equity program focused on venture capital investment in life sciences, technology and healthcare.
Sarah RundellNovember 19, 2019
Asset Allocation
Hawaii expands CRO strategy
The new CIO at the Hawaii state pension fund is looking for additional sources of uncorrelated return, including hedge funds, and will look to add new managers to the lineup. Sarah Rundell talks to Elizabeth Burton.
Sarah RundellDecember 10, 2019
Asset Allocation
Ignore diversification: BCI’s Dunatov
Stefan Dunatov, head of investment strategy and risk at Canada’s $170 billion British Columbia Investment Management, says long term investors should forget about diversification at the strategic level and instead focus on buying growth beta assets.
Sarah JonesDecember 5, 2019
Asset Allocation
Prince says diversify east and west
Bob Prince, co-chief investment officer of Bridgewater, says that institutional investors should consider diversification in the context of different economic exposures which could manifest in splitting portfolio allocations to the east and west. He advocates looking at diversification through the lens of macroeconomic conditions and cashflows related to the differences in economic regimes around the world.
Amanda WhiteDecember 3, 2019
Asset Allocation
Future Fund adds risk and liquidity
The Future Fund is adding risk to its portfolio, and focusing on liquidity, as part of a part of an ongoing strategy to free up more capital in the portfolio in the event of a drawdown. It is in the midst of selling off a “large slice” of private equity assets on the secondary market and has bought listed equities in emerging markets in the past year.
Amanda WhiteNovember 22, 2019
