Returns from one allocation have outshone all others at the $230 billion Teacher Retirement System of Texas over the last year. TRS’s tiny $403 million allocation to gold sits in a commodities sleeve which posted a one-year return of 59.8 per cent, trouncing the Goldman Sachs Commodities benchmark which returned 10.1 per cent.

“One word there: gold,” said Jase Auby, at TRS for 16 years and chief investment officer since 2019, speaking during the pension fund’s December investment committee meeting that celebrated stellar one-year returns across the board with 10 of TRS’s 14 asset categories returning above 10 per cent.

The gold allocation – which was doubled this year – comprises a special gold fund launched back in 2009 to provide a strategy independent of commodities. The fund is invested in gold and silver (via ETFs) and precious metals equities where TRS owns core large cap quality stocks like Agnico Eagle Gold and Wheaton Precious Metals, but also promising exploration and early development stocks.

This year other investors have also tapped into the benefits of an asset that sees its value rise in a world worried by inflation, geopolitical instability and government debt levels, as well as de-dollarisation.

For example, Australia’s A$223 billion ($143.2 billion) Future Fund added exposure to gold. European pension funds, particularly Swiss institutional investors, are long-time gold investors like Migros-Pensionskasse (MPK) the CHF29.4 billion ($31 billion) pension fund for Switzerland’s largest retailer, Migros.

Strong returns across the board

TRS posted a one-year return of 10.7 per cent which equates to a 150 basis point excess return above the benchmark. The fund’s three-year return came in at 11.5 per cent with 190 basis points of excess return. The best three-year return in TRS’  history, it resulted in an additional $66 billion coming into the trust, $55 billion from the market and $11 billion from alpha.

TRS’s highest one-year performers included non-US developed market equities (22.3 per cent) which outperformed US equities for the first time since the GFC. Absolute return also did well, returning 18.2 per cent. Real estate and government bonds were poor performers, and US treasuries have not only dragged on the portfolio but also increased risk because they haven’t provided the diversification they were meant to.

Borrowing from the future

The majority of the outperformance came from security selection: although asset allocation is the primary driver of returns, security selection adds additional value. Still, strong returns in recent years indicate lower returns in the future, and trustees were reminded that the returns should be viewed through a rear-view mirror.

“Sometimes it feels like we are borrowing from the future,” said Mika Malone, managing principal and Meketa Investment Group, presenting to TRS with managing principal Colin Bebee.

Moreover, even though TRS’s one-year returns from private equity still hit double figures (10 per cent) the portfolio’s underperformance relative to public equity will prompt analysis going forward. TRS has a 12 per cent long-term target to private equity that is currently overweight at around 15 per cent.

Risk Parity in action

The board also had an update on the $11.3 billion allocation to risk parity, recently pared back to 5 per cent from 8 per cent of the portfolio. Two-thirds of the diversified, liquid portfolio designed to function well in any market environment due to the balance between different asset classes is managed internally.

Although long-term returns have been up and down, recently it has done well with a positive one-year (10 per cent) and three-year (13 per cent) return.

Auby explained that the allocation is particularly useful in times of need. For example, the TRS team leaned into the allocation for liquidity during the pandemic. It is also the biggest holder of commodities in the trust.

“Risk parity is an alternative way to allocate assets,” he said, explaining that most pension funds allocate in a traditional way without leverage, in equity-heavy strategies that are “tried and true.” But by allocating a small amount to risk parity TRS is able to keep the door open to the strategy, and track its performance against the rest of the portfolio.

In contrast some pension funds like Denmark’s ATP use a risk parity strategy across their entire portfolio.

This is the third part in a series of six columns from WTW’s Thinking Ahead Institute exploring a new risk management framework for investment professionals, or what it calls ‘risk 2.0’. See other parts of the series here. 

In this piece we explore the spectrum of “world views” that could be embedded in an investor’s risk mindset and the associated risk practice that would be consistent with each of them, with the aim of identifying where the “jump” from risk 1.0 to risk 2.0 occurs.

Asset returns are random (risk 1.0)

The simplest worldview that is of some practical use would be that the returns on all asset classes are a random walk (ie independent through time) and drawn from normal or lognormal distributions that are correlated with each other in a given time period.

This formulation is aligned with the mindset of Markowitz (1952) from which risk practices including mean-variance optimisation and Capital Asset Pricing Model emerged.

Asset returns are negatively skewed and “fat-tailed” (risk 1.1)

Most undergraduate finance courses teach that asset returns are typically negatively skewed and “fat-tailed”. This means:

  • adverse outcomes are more extreme than positive outcomes; and
  • extreme market movements are more likely than is predicted by a normal distribution.

[click to enlarge]
There are a number of potential explanations for this outcome including:

  • negative skew is a natural feature of certain asset classes (eg corporate bonds, insurance-linked securities) and trading strategies (eg carry strategies, short volatility)
  • market responses to bad news (fear) tend to be more significant than to positive news, ie “the market goes up by the escalator but down by the elevator shaft”.

The corresponding risk practice could include:

  • adopting non-normal (but still smooth/continuous) distributions to represent asset return outcomes to better reflect likely downside risk outcomes (eg CVaR)
  • greater focus on risks that actually matter (ie mission impairment) and less focus on short-term volatility
  • incorporating higher moments into optimisation processes, eg defining a utility function that factors skew and kurtosis into portfolio evaluation.

Economies and markets exhibit different regimes (risk 1.x?)

A further evolution of the risk mindset would be to recognise that economies and asset markets move through regimes which have materially different risk and return implications. This could, for example, be expressed via a “good” environment (high return, low volatility, diversification works) and a “bad” environment (negative return, high volatility, diversification fails).

Additional enhancements to risk practice that would be consistent with this include:

  • allowing for characteristics of asset returns to be time-varying rather than stationary
  • allowing for economies and markets to “switch” between two or more regimes with pre-determined probabilities
  • creating dependencies between asset classes that reflect real-world economic relationships in these regimes (eg property returns should reflect changes in bond yields as the latter are an input to valuation processes)
  • assuming asset returns are autocorrelated/mean reverting (vs assuming independence through time).

Beyond modelling aspects, other areas of risk practice that have evolved over time include:

  • development of forward-looking scenarios to define regimes and stress test portfolios
  • use of risk factors or return drivers to understand portfolio diversity and likely robustness to different economic regimes
  • use of multiple lenses/dashboards and qualitative considerations to inform investment decisions with less reliance on quantitative optimisation.

Regime changes triggered by the financial system (risk 1.9x/risk 2.0?)

What has been described up to this point represents best-in-class current risk practice which embeds an important underlying assumption – that “shocks” to economies and markets are exogenous (externally driven). However, as was observed in the Global Financial Crisis, shocks causing system-wide effects can originate from within the financial system (ie shocks can be endogenous as well as exogenous).

A first important step towards a risk 2.0 mindset is therefore to recognise that regime changes can be triggered by the financial system itself due to the behaviour of agents within the system. In addition, these regime changes are usually “accumulating in the background”. This adds a belief that economies and markets are complex adaptive systems, which should lead to more significant changes in risk practice than described previously. In particular:

  • switching probabilities are partially uncertain at the outset and respond to the prevailing regime
  • more sophisticated representations of interconnectedness within the financial system than correlation matrices
  • incorporation of path dependency – if regime changes are accumulating in the background this means that Markovian models that only “look at” the current state of the system are insufficient
  • widening the distribution of 10/20 year outcomes beyond conventional models that assume risk on an annualised basis reduces with the square root of time.

The financial system is part of a broader System (risk 2.0)

An important limitation of the risk mindset described above is the focus on the financial system in isolation. In reality, the financial system is a part of the broader (capital-S) System which has “nested” boundaries around society, the human environment and then the planet itself. Importantly, actions of agents in the financial system can impact the broader System (eg climate change, inequality) which in turn can have impacts on the financial system (this is commonly referred to as “double materiality”).

A second related evolution is incorporating “tipping points” which once crossed are very difficult, or impossible, to reverse, ie these can result in permanent transitions of economies, society and environment. Crossing tipping points can trigger systemic risks which result in permanent impairment or stranding of certain sectors of the economy. This is very different to a large fall in markets due to (for example) an economic shock, as these losses are permanent and not subsequently made up.

This suggests that further significant shifts in risk practice are required including:

  • greater use of qualitative risk measures as there is a natural limit to the usefulness of quantitative models in the measurement and management of systemic risks which are highly non-linear and largely irreducible.
  • the use of multi-modal or discontinuous distributions, as the outputs from different systemic risk scenarios are likely to be very differentiated in terms of economic, social and environmental (and therefore financial asset return) outcomes.
  • incorporation of “one way” transitions and absorbing states into risk models to represent tipping points can cause mission impairment – this increases the importance of thinking about risk in time series rather than cross-section due to the “irreversibility of time”.
  • shifting focus from portfolio-level risk management to system-level risk mitigation, as it is highly unlikely that:
    • the impact of systemic risk on portfolios can be reduced through asset allocation as systemic risks are pervasive; and/or
    • that a portfolio can be constructed that is robust to a range of systemic risk scenarios as systemic risks are generally highly non-linear
  • development of dashboards to monitor the accumulation of systemic risks to allow strategic adaptation of the portfolio as the probability of different scenarios and crossing of tipping points changes over time.

The table below summarises the journey from risk 1.0 to risk 2.0 in terms of changes in world view and the resulting investment toolkit. We conclude that the shift from risk 1.0 (or risk 1.x) to risk 2.0 is both transformational (rather than incremental) and can only be partially achieved by the use of quantitative models.

Jeff Chee is global head of portfolio strategy at WTW.

This article was published in partnership with Blue Owl Capital.

This article was published in partnership with Blue Owl Capital.

Asset owners are crying out for bespoke solutions to address their unique and evolving needs, yet many private market managers continue to squeeze them into generic closed-ended funds. Such structures are outdated and face extinction, according to James Clarke, global head of institutional capital at Blue Owl Capital.

When it comes to raising money, private market managers have had it relatively easy.

The culmination of multiple factors, including heightened economic and geopolitical uncertainty, rising inflation, shrinking public market opportunities, innovation in technology, and an under-allocation to private assets, have resulted in a fantastic decade for private market managers.

The global private market investment sector has surged to over US$24.4 trillion from around US$9.7 trillion in assets under management in 2012, according to EY Global, as asset owners have bolstered their allocations to private equity, private credit, and infrastructure in an effort to generate alpha and build more diversified, resilient portfolios.

And there’s more investment to come.

A recent survey of leading global limited partners (LPs) conducted by consultant McKinsey found that investors plan to allocate more capital to private markets in the near term.

However, the dynamics are changing, and managers need to wake up to the bespoke needs of their clients.

Fundraising across all private asset classes has become more challenging, with investors demanding greater value, flexibility and stronger alignment of interests.

At the same time, private market managers are grappling with fresh headwinds including competitive pressures, narrowing exit options, and heightened regulatory scrutiny.

McKinsey’s 2025 Global Private Markets Report described dealmaking conditions in more recent times as “tepid” and “likely to remain uneven”, as managers adapt to an industry in “transition.”

“Fundraisers are looking beyond closed-ended channels to raise capital in new vehicles, such as evergreen funds,” the report stated, adding that investors are moving away from passive allocations and seeking to invest directly or co-invest in assets alongside GPs, and actively engage companies.

This transition was inevitable.

Traditional closed-ended structures, which pool and lock money up for a fund’s lifecycle, are not optimal for many institutional investors, particularly large allocators.

Illiquidity aside, there’s little-to-no ability for investors to influence underlying investment and management decisions.

Additionally, there are question marks over whether client service is meeting the mark. And the level of service in general needs to improve, in my opinion.

Take it or leave it

Closed-ended funds are still the dominant vehicle for accessing private markets, but their generic, one-size-fits-all nature is hardly befitting of some of the world’s largest asset allocators.

Globally, institutional investors, including pension funds, sovereign wealth funds and endowments, manage an estimated US$58.5 trillion, according to the Thinking Ahead Institute’s Global Pension Assets Study. They are all different and unique, reflecting their membership, and they deserve to be treated that way.

Conversations with a Californian defined benefit fund will differ wildly to a UK defined contribution fund, highlighting the irrelevance of a single, one-dimensional solution for both.

Customisation should be table stakes, as it is with most other goods and services, from cars to legal advice and I would argue, institutional public market investments.

Private market managers have historically been largely immune. Ironically, it is their success and the growth of private market assets over the past decade that is driving change and progress.

Active listening and active management

Private market managers need to actively listen and respond to client demands for bespoke solutions that meet their specific circumstances, requirements and objectives.

They need to lift service standards significantly and innovate to reflect the fees that they earn, and the trusted, respected relationship that asset owners expect from their service providers.

If they don’t act swiftly, the trend suggests that more institutional investors will bring private assets inhouse.

Asset owners themselves are growing and maturing. They are reshaping their teams, expanding their investment capabilities, and expecting more from their partners.

Private market managers also need to evolve to better serve and cater to the needs of their clients. They can’t rely on traditional fund structures, given their limitations, or a drop in and out service mentality. Instead, they should build bespoke solutions that offer more control, flexibility, and optionality – approaching every client engagement as a true partnership.

The Principles for Responsible Investment (PRI) will reduce signatories’ responsibilities in their annual mandatory reporting, as the UN-backed body looks to stay relevant amid a surge of new responsible investment codes and standards.

The reporting framework will be slashed to consist of just 40 questions, down from the current 240 and will come into force next year. 

Outgoing PRI chief executive David Atkin says the change recognises that investors bear too much administrative burden around ESG disclosures but promises that the simplified assessment will be just as rigorous. 

“The overhead [in our reporting] was disproportionate to the value of the effort,” he tells Top1000funds.com in an interview before he officially stepped down on December 1. Atkin will remain at the PRI as an advisor until April 2026. 

“The reporting system has been very important, and it’s been such a critical element of the growth of responsible investment around the world, but at a time when there are now so many other mandatory requirements and voluntary codes, our signatories were drowning under the amount of work they had to do.” 

Atkin said the new assessment will remove more “granular” questions such as those on the asset class and strategy levels, and will instead focus on organisational level commitments such as how ESG is incorporated into governance and investment analysis.  

A new concept that was introduced into the new reporting framework is the so-called three-pronged “PRI pathways”, which essentially allow signatories to choose an ESG approach to align with. They can choose to incorporate ESG factors in their investment approach, address sustainability-related financial risks, or pursue positive impacts. 

Atkin does not see this approach as putting the reporting system at risk of being gamed. Instead, it could offer better insights for asset owners who may want to see if a manager has an aligned responsible investment approach.  

“I think that’s much more useful information than trying to get all of that through the [old] assessment, which is one size fits all and just frustrates everybody,” he says.  

There have been some volatile sentiments around responsible investments, particularly in the US due to the Trump administration’s hostile stance against ESG principles.  

This September, the US Employee Benefits Security Administration, which oversees $14 trillion of the nation’s private retirement assets, labelled the OECD’s responsible investment principles for pension funds “nothing but a Marxist march through corporate culture” and said it will no longer support such policies. [See US Department of Labor slams OECD on ‘Marxist’ ESG policies]. 

Asset managers which were public supporters of responsible investment also had to work hard to win back or retain mandates from US public funds, such as the $11.5 trillion BlackRock which was removed from Texas politicians’ blacklist only after it dropped out of Climate Action 100+ and the Net Zero Asset Managers alliances. [See Texas politicians reinstate BlackRock as manager’s ties to the state grow]. 

The role of asset owners 

Atkin says asset owners can play a bigger role in stabilising the discussion around responsible investments.  

“If asset owners are consistent in signalling to the marketplace that responsible investment remains relevant and that they will reward those managers who are aligned with mandates and incentivised around working on those [responsible investment] areas, the political stuff will just take care of itself,” he says.  

Atkin has seen discussions around ESG flip during his time at the PRI. When he joined PRI in 2021, investors were living through peak “ESG”. Stronger recognition around climate change and social unity, alongside a positive geopolitical environment, contributed to the tailwinds around responsible investment post-COVID.  

But soon after, the Russian invasion of Ukraine and the inflation-fuelled cost of living crisis have given a voice to populist politicians, which included climate denialists.  

Despite the pushbacks, Atkin says the green energy transition will not change direction as its logics are rooted in economics, not politics. 

“It is unstoppable,” he says. “In a world where we now need to create more energy capacity to deal with AI and data centres… when you look at the comparison between the cost of building renewables compared to fossil fuels, it’s very clear that renewables are the more economical solution. That’s got nothing to do with politics.” 

“If you believe the science, and you are suddenly stopping work [on responsible investment] because the politics have got difficult for you, then you are not performing your fiduciary responsibility. 

“In fact, I think you’re exposing yourself to litigation risk.” 

In December, Atkin returned to his home country of Australia and will support interim chief executive Cambria Allen Ratzlaff in an advisory capacity until April 2026. PRI lifted the number of signatories from 3,000 to more than 5,000 during his time as the chief executive.

Before that, Atkin spent 15 years on PRI’s board between 2009 and 2015, which is why he anticipates ongoing contributions from Asia Pacific to the organisation even though he has left the executive post.  

“As an industry, if you’d said five years ago that we would have more than 50 per cent of the world GDP covered by sustainability standards, I would have said you were dreaming,” he says. 

“But that’s where we are right now, 60 per cent of the world are in the process of adopting ISSB standards.” 

Most importantly, emerging markets are upping their game in creating sustainable investment opportunities with “pragmatic” policymaking and “institution-oriented” governments, which is crucial as they account for a significant portion of the global population.  

“You could say one sign of success is that we’re not needed. But I think there’s going to be an ongoing need for an organisation like the PRI because you’ve got people continuing to go on their learning,” Atkin says.  

“I’m really proud of the fact that we’ve been able to navigate this complex environment, introduce new and better value to our signatories, and reinvigorate our relationship with our asset owner community. 

“There has been a lot of time invested, but I’m really excited about the future.” 

In a rare interview, Jayne Atkinson, chief investment officer of the £100 billion ($132 billion) UK pool LGPS Central, reveals the plan to scale up its offering after almost doubling its assets under management, including expanding alternatives to new allocations in hedge funds, diversified growth funds and insurance-linked securities.

With the sweep of a pen, LGPS Central, one of the United Kingdom’s Local Government Pension Scheme pools, has become a £100 billion ($132 billion) asset manager.

Following the government’s pursuit of economies of scale in public sector pensions, it axed two pools, ACCESS and Brunel Pension Partnership, and forced their underlying pensions funds to choose other pools.

LGPS Central has proved a popular choice, attracting six new client funds to bring its number of partner funds to 14 and nearly double its assets under management.

It requires “thinking and acting like a £100 billion asset manager” with more service offerings and a boosted exposure to asset classes and expertise CIO Jayne Atkinson, who joined LGPS Central six months ago, tells Top100funds.com.

“I wanted to join an LGPS pool that’s on the way up,” she says.

Under pressure to pool

Government policy has also put a renewed emphasis on pooling whereby partner funds transfer assets to LGPS Central. Policy makers want all LGPS assets to be pooled by March 2026, although that mandate does allow “limited flexibility” for pension funds moving to new pools.

LGPS Central’s pooled assets have grown from £19 billion in 2022 to around £50 billion today, but around £18 billion remains managed by partner funds through their existing arrangements. These include both active and passive strategies with external managers, across public and private markets.

“We have already started the transfer of these legacy assets. We are also in advanced discussions with new partner funds to understand their current asset strategies and work has started to formulate plans to transfer these assets across too,” says Atkinson.

As the pace quickens, she says her key focus is on developing stakeholder relationships, meeting new partner funds and attending the different pension committee meetings that range in size and sophistication with different needs and levels of diversification. Positively, she’s encouraged by the sense of collaboration between the funds, and how existing partner funds got behind LGPS Central’s bid to inherit new ones.

“We have been touched by how existing partner funds worked with us to inherit new ones in a truly collaborative exercise.”

In recent months she has made internal decision-making processes more efficient, including streamlining the manager line up in the pooled fund offerings. She is also building up the internal investment team to accommodate new partner funds, focused on recruiting mainstream asset managers from the external market place.

“We’ve already attracted some great hires,” she says. “It’s wonderful to see experienced household names come through the door.”

willingly taking compulsory advice

Policy makers have also ruled that  local authority pension funds take investment strategy advice from their respective investment pools. LGPS Central already provides investment advice to some of the partner funds, but in line with government policy has boosted its advisory offering in time to provide comprehensive investment strategy across all nine asset buckets, and asset liability modelling, from next spring.

“From next April, it will be compulsory for partner funds to use our advisory offering, but we want them to willingly come to us for advice and so we are working together with them on what that offering could like in the future,” she says, explaining that the individual administrative authorities will continue to decide each fund’s overall asset allocation, the major driver of overall returns.

Private markets push

LGPS Central’s existing  private markets offering is spread across OECD countries with around a quarter weighted to UK assets. Allocations span private equity, private credit, infrastructure and property, and each bucket has several closed and open-ended funds with different risk-return profiles and strategies.

This will expand to new allocations to hedge funds, diversified growth funds and insurance linked securities as well as hedging assets by April next year.

“Alternatives are one of the government’s nine asset class buckets, and we want to make sure we are ready to accommodate that next year,” she says, adding that these allocations won’t necessarily be run in-house. “We expect to in-house more investments where it is deemed cost effective, but we may also outsource if it’s not cost effective to keep the allocation in house. It’s a two-way street.”

LGPS Central is also building a new, three-person internal investment team focused on local investment in a strategy that aligns with government policy to invest more at home. Atkinson says she doesn’t want it labelled impact investment.

“The reason is, we are conscious of our members underlying need for a financial return and we are very keen to supply that financial return. These are not charitable investments, and we expect a risk adjusted return going forward.”

Norway’s massive sovereign investor, Norges Bank Investment Management, has surpassed Japan’s pension whale Government Pension Investment Fund to become the world’s largest asset owner for the first time, according to a new report by the Thinking Ahead Institute.  

NBIM, which was established to manage revenue generated from Norway’s oil reserve in 1998, has assets of KR20,440 billion ($2 trillion). At the time of the report, which measures assets at the end of 2024, it reported assets of $1.7 trillion, leapfrogging GPIF with $1.6 trillion. 

Chinese sovereign wealth funds took out third and fourth place, with SAFE Investment Company and China Investment Corporation, respectively holding assets of $1.4 trillion and $1.3 trillion according to the report. 

The fifth and final fund with assets above the trillion-dollar mark is the United Arab Emirates’ sovereign investor, Abu Dhabi Investment Authority ($1.1 trillion), according to the Thinking Ahead Institute. The report extracts AUM information and estimates from annual reports, regulators, third-party consultants and direct communications with organisations.  

A unique attribute for a fund the size of Norges Bank is that it has also been named the world’s most transparent fund by the Global Pension Transparency Benchmark, marking a rare combination of size and openness. 

On a country level, the US remains the biggest institutional market with 28 per cent of the assets from the top 100 asset owners, followed by China with an 11 per cent share and the United Arab Emirates with 7 per cent.  

Director at the Thinking Ahead Institute, Jessica Gao, noted that there are five wealth “clusters” forming in the US, Canada, Europe, the Middle East and Australia.  

“These pools of asset owners… collectively manage around $13 trillion and are shaping the direction of institutional investing, setting global investment trends, governance practices, and sustainability standards,” Gao said in a media statement.  

A well-known group among them is Canada’s Maple 8, which have been trailblazers in the internalisation of investment management and allocation to private markets, enabled by their rigorous fund governance.  

But the biggest cluster identified by the report is the ‘Euro 9’, which consists of NBIM, the Netherlands’ APG, PGGM, and MN Services N.V., France’s CDC, Sweden’s AP7, Germany’s Bayerische Versorgungskammer, Denmark’s ATP and the UK’s Universities Superannuation Scheme.  

In a further extension of the acronym, the US boasts what the Thinking Ahead Institute is calling the ‘Public 7’, which is made up of seven state and federal-level pension funds, including the $954 billion Federal Retirement Thrift.  

But the ‘Gulf 5’ in the Middle East and the ‘Super 6’ in Australia were deemed “less mature” clusters, even though the former collectively manages close to $3.9 trillion in assets. The Australian pension is a relatively young system – only 33 years old – but has huge growth potential because it is a compulsory system. 

The report determined these clusters by exercising an AUM limit and while these funds operate in their own regional context, the report identified commonalities, including a total portfolio thinking, a focus on resilience and a willingness for investor partnerships. 

As these funds grow, they need to address talent, culture, governance, and leadership as separate factors but also issues at the intersection of them: joined-upness in teams, work flexibility and networks, for example, the report said.  

“The funds have expressed concern that often events progress faster than their organisations can react. They are aware that kneejerk responses that are not fully-formed will not advance their cause,” the report said.  

“The funds’ CEOs and CIOs are impressive in their inner-outer thinking here – cultivating infacing-savviness – such as authenticity, self-awareness, critical thinking, visionary insight, and emotional intelligence. And outfacing agility – acting as ambassadors, authoritative voices, collaborators, diplomats, and experts.” 

Another trend the report identified among asset owners is the increasingly sophisticated use of technologies such as artificial intelligence, but highlighted that most allocators’ use-cases orient towards oversight, decision-support, and governance.  

It says this is a reflection of smaller internal teams in asset owner organisations and their reliance on asset managers in day-to-day investment implementation. 

“AI has a particularly attractive use case for asset owners in integrating data by blending existing knowledge and beliefs with various fresh data sources and context to reach new levels of decision-useful intelligence,” the report said. 

“[But] given the reliance asset owners place on asset managers for technology and data infrastructure, it is increasingly important that the asset managers stay ahead of the curve in adopting these tools.”