The interruptions to work and the revolution of technological tools in 2020 have changed the way investors assess products, fund managers and stocks. What technological tools are investors using in a remote environment including more innovative ways to do due diligence? What behaviours and processes have changed because of COVID and lockdown?[vc_quotes layout=”accordion” quotes=”%5B%7B%22name%22%3A%22Rick%20di%20Mascio%20%22%2C%22job_role%22%3A%22Chief%20executive%2C%20Inalytics%20(United%20Kingdom)%22%2C%22content%22%3A%22Rick%20Di%20Mascio%20joined%20the%20British%20Coal%20Pension%20Fund%20in%201979%20and%20eventually%20held%20the%20joint%20roles%20of%20CIO%20and%20CEO.%20At%20that%20time%20the%20fund%20was%20one%20of%20the%20earliest%20adopters%20of%20a%20strategy%20that%20later%20became%20known%20as%20LDI.%20His%20career%20included%20spells%20at%20Goldman%20Sachs%20Asset%20Management%2C%20and%20an%20early%20European%20long%20%2F%20short%20hedge%20fund%2C%20Olympus%20Capital.%5CnIn%201998%2C%20di%20Mascio%20launched%20Inalytics%20to%20provide%20objective%20empirical%20measures%20of%20how%20fund%20managers%20generate%20alpha.%20Inalytics%E2%80%99%20clients%20include%20some%20of%20the%20world%E2%80%99s%20largest%20and%20smallest%20fund%20managers%2C%20sovereign%20wealth%20funds%2C%20and%20pension%20funds.%20Di%20Mascio%20has%20co-authored%20a%20number%20of%20academic%20papers%2C%20including%3A%20%E2%80%98Selling%20Fast%20and%20Buying%20Slow%3A%20Heuristics%20and%20Trading%20Performance%20of%20Institutional%20Investors%E2%80%99%20and%20%E2%80%98Alpha%20Decay%E2%80%99.%22%2C%22image%22%3A%2244370%22%2C%22linkedin%22%3A%22https%3A%2F%2Fwww.linkedin.com%2Fin%2Frick-di-mascio-47a4198%2F%3ForiginalSubdomain%3Duk%22%7D%2C%7B%22name%22%3A%22Dev%20Jadeja%22%2C%22job_role%22%3A%22Head%20of%20investment%20due%20diligence%2C%20Local%20Pensions%20Partnership%20Investments%20Limited%20(United%20Kingdom)%22%2C%22content%22%3A%22Dev%20Jadeja%20leads%20LPP%20Investments%E2%80%99%20selection%20and%20monitoring%20of%20external%20fund%20managers%2C%20working%20closely%20with%20the%20broader%20investment%20team%20and%20reporting%20to%20chief%20investment%20officer%2C%20Richard%20J%20Tomlinson.%5CnJadeja%20works%20across%20all%20the%20asset%20classes%20in%20conjunction%20with%20LPPI%E2%80%99s%20specialist%20portfolio%20management%20teams%20and%20is%20the%20functional%20lead%20for%20all%20external%20manager%20investment%20due%20diligence.%5CnJadeja%20joined%20LPP%20Investments%20from%20Cardano%20Risk%20Management%2C%20where%20he%20was%20deputy%20lead%20for%20the%20manager%20research%20team.%20Prior%20to%20that%2C%20he%20held%20senior%20research%20and%20portfolio%20management%20roles%20at%20International%20Asset%20Management%2C%20Key%20Asset%20Management%20and%20Old%20Mutual%20Asset%20Managers.%22%2C%22image%22%3A%2244371%22%2C%22linkedin%22%3A%22https%3A%2F%2Fwww.linkedin.com%2Fin%2Fdev-jadeja-6790411b%2F%3ForiginalSubdomain%3Duk%22%7D%2C%7B%22name%22%3A%22Luba%20Nikulina%22%2C%22job_role%22%3A%22Global%20head%20of%20research%2C%20Willis%20Towers%20Watson%20(United%20Kingdom)%22%2C%22content%22%3A%22Luba%20Nikulina%20is%20global%20head%20of%20research%20at%20Willis%20Towers%20Watson%E2%80%99s%20investment%20business%20providing%20investment%20advisory%20and%20fiduciary%20management%20services%20to%20institutional%20investors%20around%20the%20world.%5CnHer%20primary%20responsibilities%20are%3A%20pure%20investment%20(ensuring%20the%20quality%20of%20research%20and%20investment%20decisions%20as%20well%20as%20responsibility%20for%20the%20ultimate%20performance%20of%20client%20portfolios)%2C%20business%20management%20(new%20products%20and%20services%2C%20team%20management%2C%20efficiency%2C%20resourcing)%20and%20working%20with%20some%20of%20the%20largest%20asset%20owners%20globally%20advising%20them%20on%20their%20governance%20structures%2C%20strategy%2C%20portfolio%20construction%20and%20investment%20selection.%5CnShe%20started%20her%20career%20in%201996%20in%20Russia%20and%20joined%20WTW%20in%202005%20working%20both%20in%20the%20New%20York%20and%20London%20offices.%20Nikulina%20attended%20the%20Advanced%20Management%20Program%20at%20Harvard%20Business%20School%20and%20holds%20an%20MBA%20degree%20from%20London%20Business%20School%2C%20a%20MS%20in%20Finance%20from%20the%20Finance%20Academy%20in%20Russia%20and%20a%20BA%20in%20Linguistics%20from%20the%20Linguistic%20University%20in%20Belarus.%20She%20has%20also%20completed%20the%20Financial%20Times%20non-executive%20director%20program%20in%20the%20UK.%22%2C%22image%22%3A%2244372%22%2C%22linkedin%22%3A%22https%3A%2F%2Fwww.linkedin.com%2Fin%2Fluba-nikulina%2F%3ForiginalSubdomain%3Duk%22%7D%5D” title=”Speakers” el_class=””][vc_quotes layout=”accordion” quotes=”%5B%7B%22name%22%3A%22Colin%20Tate%22%2C%22job_role%22%3A%22Chief%20executive%2C%20Conexus%20Financial%20(Australia)%22%2C%22content%22%3A%22Tate%20has%20been%20an%20investment%20industry%20media%20publisher%20and%20conference%20producer%20since%201996.%20In%20his%20media%20career%2C%20Tate%20has%20launched%20and%20overseen%20dozens%20of%20print%20and%20electronic%20publications.%20He%20is%20the%20chief%20executive%20and%20major%20shareholder%20of%20Conexus%20Financial%2C%20which%20was%20formed%20in%202005%2C%20and%20is%20headquartered%20in%20Sydney%2C%20Australia.%20The%20company%20stages%20more%20than%2020%20conferences%20and%20events%20each%20year%20%E2%80%93%20in%20London%2C%20New%20York%2C%20San%20Francisco%2C%20Los%20Angeles%2C%20Amsterdam%2C%20Beijing%2C%20Sydney%20and%20Melbourne%20%E2%80%93%20and%20publishes%20five%20media%20brands%2C%20including%20the%20global%20website%20and%20strategy%20newsletter%20for%20global%20institutional%20investors%20conexust1f.flywheelstaging.com.%20One%20of%20the%20company%E2%80%99s%20signature%20events%20is%20the%20bi-annual%20Fiduciary%20Investors%20Symposium.%20Conexus%20Financial%E2%80%99s%20events%20aim%20to%20place%20the%20responsibilities%20of%20investors%20in%20wider%20societal%2C%20and%20political%20contexts%2C%20as%20well%20as%20promote%20the%20long-term%20stability%20of%20markets%20and%20sustainable%20retirement%20incomes.%20Tate%20served%20for%20seven%20years%20on%20the%20board%20of%20Australia%E2%80%99s%20most%20high%20profile%20homeless%20charity%2C%20The%20Wayside%20Chapel%3B%20and%20he%20has%20underwritten%20the%20welfare%20of%2060%2C000%20people%20in%2028%20villages%20throughout%20Uganda%20via%20The%20Hunger%20Project.%22%2C%22image%22%3A%2244341%22%2C%22linkedin%22%3A%22https%3A%2F%2Fwww.linkedin.com%2Fin%2Fcolin-tate-839a5a181%2F%22%7D%5D” title=”Moderator” el_class=””][vc_empty_space height=”10px”]
Key takeaways
A discussion on manager relationships via zoom finds positives and negatives in the new trend.
All panellists agree that allocators have tended to stick with existing relationships through the pandemic making it difficult for managers approaching investors for the first time to form relationships and win mandates.
Technology will play an increasingly important role in manager due diligence. Lockdown has made building manager relationships and trust more challenging.
Pension funds struggling to carry out due diligence on managers without the ability to “look them in the eye” can use technology to provide a valuable new lens.
Data plays a role by allowing investors to see from an evidence base where a mangers key strengths and weaknesses are.
Human judgement calls have an equal weight in the investment process. A qualitative overlay is important, and most data is available in public markets making the use of quant analysis in private markets trickier.
Asset managers availability has increased through the pandemic because travel has ended, increasing productivity. It is easier to set up meetings but remote meeting make it difficult to assess culture and other soft factors that shape investment decisions.
Due diligence on hard assets like infrastructure or real estate has been much more challenging over the last year.
• Data creates the environment to ask the right questions. For example, the insight it provides on emerging market managers’ performance ensures investors start with a strong cohort from which to base their selections, speeding up the process and avoiding any “hoodwinking” on track records.
• Small, start-up managers have struggled to get over the line during the pandemic. Many investors have stuck with existing managers because it has been more difficult to get comfortable with new teams.
Do you use technology and quantitative tools to assist with manager due diligence?[vc_line_chart x_values=”” values=”%5B%7B%22title%22%3A%22No%22%2C%22y_values%22%3A%2225%22%2C%22color%22%3A%22blue%22%7D%2C%7B%22title%22%3A%22No%20but%20think%20it%20would%20be%20additive%20to%20the%20process%22%2C%22y_values%22%3A%2215%22%2C%22color%22%3A%22pink%22%7D%2C%7B%22title%22%3A%22Yes%22%2C%22y_values%22%3A%2260%22%2C%22color%22%3A%22orange%22%2C%22custom_color%22%3A%22%2300c1cf%22%7D%5D”]
The big difference between the vaccine rollouts and the scale of the stimulus measures across the world could result in a K-shaped global economic recovery, with much of the developed world booming but poorer countries continuing to struggle. However the
Two forces will drive a strong rebound in the global economy over the next three years: widespread vaccine roll-out allowing a progressive easing of lock-downs, and additional large scale US fiscal stimulus.
Institutional allocations to emerging markets (EM) equities have increased steadily since the 1980s1, as the asset class has evolved from frontier investment to growth mainstay.
Three themes driving infrastructure are setting up a potentially strong vintage year, coinciding with stimulus programs focusing attention on the asset class.
In this exclusive interview for Truthout, one of the world’s leading progressive economists, Robert Pollin, explains what Biden’s economic plan means for the majority of American people and how it will help create a somewhat fairer tax system.
Are market experts prone to heuristics, and if so, do they transfer across closely related domains—buying and selling? We investigate this question using a unique dataset of institutional investors with portfolios averaging $573 million.
Leave a Comment
You must be logged in to post a comment.
Login