Singapore’s two largest asset owners, GIC and Temasek, see attractive opportunities in climate adaptation solutions – a relatively underfunded area compared to decarbonisation. The former has already made selective adaptation investments and said the opportunity set across public and private debt and equity could increase to $9 trillion by 2050.
This World Bank policy research paper examines the herding behaviour of pension funds, concluding that funds herd more in assets for which they have less market information and when risk increases. Moreover, herding is more prevalent across funds that narrowly compete with each other.
Assuming future state contributions fund the full present value of new benefits, many US state systems will run out of money in 10-20 years. This paper argues the expected shortfalls raise the possibility that the federal government will be faced with a decision whether to bail out states driven to insolvency by their pension programs.
Despite much work on hedging in incomplete markets, the literature still lacks tractable dynamic hedges in plausible environments, in this article, Professor Suleyman Basak and Dr Georgy Chabakauri provide a simple solution to this problem.
This paper investigates the underlying sources for the biases of optimised portfolios, and identifies special portfolios, termed eigenfactors, that exhibit large systematic biases in the risk forecasts. It shows that the covariance matrix can be adjusted to remove these biases, and that removing eigenfactor biases essentially removes the optimised portfolio biases as well.
This collaborative research looks at the constraints preventing institutional investors from taking their theoretical place of prominence in the market for private infrastructure. It offers insight into how institutional investors can establish internal programs, and details about the challenges of direct investment programs. But, it also concludes that funds managers will still have a crucial
This Netspar research by Hoevenaars, Molenaar, Schotman and Steenkamp studies the effect of parameter uncertainty on the long-run risk of three alternative asset classes: equity, nominal bonds and short-term T-bills.
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