[vc_empty_space height=”10px”]
How are investors tackling the issues of de-globalisation and the impact on their portfolios?[vc_quotes layout=”accordion” quotes=”%5B%7B%22name%22%3A%22Kate%20Barker%22%2C%22job_role%22%3A%22Chair%2C%20British%20Coal%20Staff%20Superannuation%20Scheme%20(United%20Kingdom)%22%2C%22content%22%3A%22Kate%20Barker%20is%20chair%20of%20trustees%20for%20the%20British%20Coal%20Staff%20Superannuation%20Scheme%2C%20and%20chair%20elect%20of%20the%20Universities%20Superannuation%20Scheme.%20She%20is%20also%20a%20non-executive%20director%20at%20Taylor%20Wimpey%20and%20Man%20Group.%20Previously%2C%20she%20was%20a%20member%20of%20the%20monetary%20policy%20committee%20at%20the%20Bank%20of%20England%20and%20she%20has%20also%20carried%20out%20much%20public%20policy%20work.%20Barker%20was%20an%20external%20member%20of%20the%20Bank%20of%20England%E2%80%99s%20monetary%20policy%20committee%20for%20three%20terms%20between%202001-2010.%20During%20that%20time%2C%20she%20was%20commissioned%20by%20the%20government%20to%20conduct%20a%20major%20independent%20policy%20review%20of%20UK%20housing%20supply%2C%20and%20subsequently%20a%20review%20of%20land%20use%20planning.%5CnBarker%20was%20chief%20economic%20adviser%20at%20the%20CBI%20between%201994-2001.%20From%202010%20to%202017%20she%20was%20an%20non-executive%20director%20of%20the%20Yorkshire%20Building%20Society%2C%20and%20she%20was%20also%20a%20commissioner%20of%20the%20National%20Infrastructure%20Commission%20between%202017-2020.%5CnIn%202014%20she%20was%20made%20a%20Dame%20for%20services%20to%20the%20economy.%5Cn%22%2C%22image%22%3A%2231915%22%2C%22linkedin%22%3A%22%22%7D%2C%7B%22name%22%3A%22James%20Davis%22%2C%22job_role%22%3A%22Chief%20investment%20officer%2C%20OPTrust%20(Canada)%22%2C%22content%22%3A%22James%20Davis%20is%20chief%20investment%20officer%20of%20OPTrust%2C%20one%20of%20Canada%E2%80%99s%20largest%20pension%20funds%20with%20net%20assets%20at%20almost%20%2420%20billion%20and%20investment%20professionals%20in%20Toronto%2C%20London%20and%20Sydney.%20He%20joined%20OPTrust%20in%202015%20and%20leads%20the%20organisation%E2%80%99s%20investment%20strategy%20and%20oversees%20its%20diversified%20portfolio%20spanning%20the%20globe%20with%20public%20market%2C%20private%20market%2C%20infrastructure%2C%20and%20real%20estate%20assets%20in%20North%20America%2C%20Europe%2C%20developed%20Asia%20and%20emerging%20markets.%20Davis%20has%20over%2025%20years%20of%20strategic%20investment%20planning%20and%20leadership%20experience%2C%20including%20proven%20results%20in%20liability%20driven%20investing%20and%20portfolio%20design.%20Most%20recently%2C%20he%20held%20the%20role%20of%20vice%20president%2C%20strategy%20and%20asset%20mix%20and%20chief%20economist%20at%20Ontario%20Teachers%E2%80%99%20Pension%20Plan%20(Teachers%E2%80%99).%20Before%20joining%20Teachers%E2%80%99%2C%20he%20was%20president%20of%20FuturesTrend%20Capital%20Corporation%20in%20Prince%20Edward%20Island%20and%20vice%20president%20and%20head%2C%20global%20fixed%20income%20and%20currencies%20at%20RBC%20Global%20Investment%20Management%20in%20Toronto.%20He%20is%20widely%20recognised%20as%20an%20engaging%20speaker%20in%20a%20broad%20range%20of%20forums%20within%20the%20pension%20industry%2C%20and%20is%20known%20for%20his%20insights%20on%20global%20economics%2C%20portfolio%20construction%20and%20investment%20strategy.%20In%20addition%20to%20degrees%20in%20mathematics%20and%20meteorology%2C%20James%20holds%20an%20MBA%20in%20Finance%20from%20Dalhousie%20University%20and%20is%20a%20CFA%20charterholder.%22%2C%22image%22%3A%2231916%22%2C%22linkedin%22%3A%22https%3A%2F%2Fwww.linkedin.com%2Fin%2Fjames-davis-0bab4610%2F%3ForiginalSubdomain%3Dca%22%7D%2C%7B%22name%22%3A%22Olivier%20Rousseau%22%2C%22job_role%22%3A%22Executive%20director%2C%20Fonds%20de%20Reserve%20pour%20les%20Retraites%20(France)%22%2C%22content%22%3A%22Olivier%20Rousseau%20was%20appointed%20to%20his%20current%20role%20in%20November%202011.%20He%20also%20chairs%20the%20asset%20manager%20selection%20committee.%20In%201986%2C%20he%20joined%20the%20French%20Treasury%20in%20Paris%2C%20where%20he%20held%20various%20positions%2C%20including%20deputy%20head%20of%20division%20and%20head%20of%20division.%20He%20worked%2011%20years%20for%20BNP%20Paribas%20in%20international%20banking%20and%20finance%20in%20Paris%2C%20Tokyo%2C%20London%2C%20Singapore%2C%20Hong%20Kong%20and%20Sydney.%20He%20also%20served%20on%20the%20resident%20board%20of%20directors%20of%20the%20European%20Bank%20for%20Reconstruction%20and%20Development%20in%20London%20and%20as%20regional%20economic%20counsellor%20at%20the%20French%20embassy%20in%20Stockholm.%20Rousseau%20graduated%20from%20the%20French%20National%20School%20of%20Administration%20in%201986.%20He%20has%20earned%20master’s%20degrees%20in%20law%20and%20economics%2C%20and%20a%20bachelor’s%20degree%20in%20political%20sciences%2C%20from%20the%20University%20of%20Aix-en-Provence.%22%2C%22image%22%3A%2231917%22%2C%22linkedin%22%3A%22https%3A%2F%2Fwww.linkedin.com%2Fin%2Folivier-rousseau-52aa1918%2F%22%7D%5D” title=”Speakers” el_class=””][vc_quotes layout=”accordion” quotes=”%5B%7B%22name%22%3A%22Amanda%20White%22%2C%22job_role%22%3A%22Director%20of%20institutional%20content%2C%20Conexus%20Financial%20(Australia)%22%2C%22content%22%3A%22Amanda%20White%20is%20responsible%20for%20the%20content%20across%20all%20Conexus%20Financial%E2%80%99s%20institutional%20media%20and%20events.%20In%20addition%20to%20being%20the%20editor%20of%20Top1000funds.com%2C%20she%20is%20responsible%20for%20directing%20the%20global%20bi-annual%20Fiduciary%20Investors%20Symposium%20which%20challenges%20global%20investors%20on%20investment%20best%20practice%20and%20aims%20to%20place%20the%20responsibilities%20of%20investors%20in%20wider%20societal%2C%20and%20political%20contexts.%20She%20holds%20a%20Bachelor%20of%20Economics%20and%20a%20Masters%20of%20Art%20in%20Journalism%20and%20has%20been%20an%20investment%20journalist%20for%20more%20than%2025%20years.%20She%20is%20currently%20a%20fellow%20in%20the%20Finance%20Leaders%20Fellowship%20at%20the%20Aspen%20Institute.%20The%20two-year%20program%20seeks%20to%20develop%20the%20next%20generation%20of%20responsible%2C%20community-spirited%20leaders%20in%20the%20global%20finance%20industry.%22%2C%22image%22%3A%2231872%22%2C%22linkedin%22%3A%22https%3A%2F%2Fwww.linkedin.com%2Fin%2Famanda-white-101a7515%2F%22%7D%5D” title=”Moderator” el_class=””][vc_empty_space height=”10px”]
Key takeaways
Kate
One of the mistakes we made at the Bank of England was that we thought the GFC would be over more quickly and we thought we could fix it on our own.
The GFC wasn’t really a global crisis. This time the crisis truly is global, and it’s more important that we get it right.
Central banks are less relevant in the pandemic because this is not a banking crisis. Thus far, policy response has broadly been viewed in a favourable light. Going forward policy may be less popular which will provide a significant challenge. Central banks will be concerned about the potential for stagflation
Do we really need the government to play a bigger role? The private sector has been remarkable throughout the crisis and they should not be taxed out of existence or prosperity to pay for the stimulus measures.
James
This is the most difficult investing period of my 30-year career because there is so much uncertainty. Monetary policy is a blunt instrument and has probably reached its peak effectiveness. This contributes to significant policy risk.
We shouldn’t be debating MMT, we should be debating the governance around it.
It is easy to talk about building a portfolio that is resilient enough to withstand any environment but this is getting harder and harder.
Given that many defensive assets don’t earn a sufficient return, balancing portfolio resilience and return can be problematic.
Olivier
There is much cause for pessimism:
Asset classes are exhausted and expensive in part because our frame of thinking is outdated.
Trust between nations is one of the most problematic issues.
We have realised that we have been short-changed by China.
We will have to choose between the US (who are letting us down) and China (who will not be a better master than the US).
Civil unrest continues and populism remains to be about me, me and I.
The EU suffered through the GFC (even though it started in the US) and also through COVID-19 (even though it started in Asia).
The Florida State Board of Administration has made some strategic moves to take advantage of opportunities in the dislocation, including in private equity, distressed debt and active listed equities.. But CIO, Ash Williams, is concerned about the underlying real economy.
This research studies the interaction between economic decisions and epidemics. The model implies that people’s decision to cut back on consumption and work reduces the severity of the epidemic, as measured by total deaths. These decisions exacerbate the size of the recession caused by the epidemic.
The global economic shutdown triggered by COVID-19 has put the North American private debt industry to its first major test. What lessons can be learned from the global financial crisis that are relevant today? What lessons are emerging as a result of COVID-19? And how might the industry evolve?
The global economy is projected to contract sharply by –3 per cent in 2020, much worse than during the 2008–09 financial crisis. In a baseline scenario--which assumes that the pandemic fades in the second half of 2020 and containment efforts can be gradually unwound—the global economy is projected to grow by 5.8 percent in 2021 as economic activity normalises, helped by policy support. The risks for even more severe outcomes, however, are substantial.
The PRI is working with signatories to further develop thinking on what the COVID-19 crisis means for investors. It is establishing two signatory participation groups to coordinate and develop investor responses, focusing on short term responses, and a future economic recovery phase.
This OECD note provides illustrative estimates of the initial direct impact of shutdowns, based on an analysis of sectoral output and consumption patterns across countries and an assumption of common effects within each sector and spending category in all countries.
Leave a Comment
You must be logged in to post a comment.
Login