Handy Sandy:
analysing the hurricane

When Hurricane Sandy descended on the east coast of the United States and headed inland, it forced the closure of all the nation’s financial markets. Christopher Finger and Oleg Ruben at MSCI thought this was important because, although there are plenty of precedents for natural disasters in terms of economic impact, the storm was singular in forcing the closure of equity markets on Wall Street.

Well and good, but unexpected events such as market closures require some degree of assumption about risk modeling. The authors were driven by the need to find out whether those assumptions lived up to the potential of the havoc Sandy wreaked.

Read the report to make up your own mind.

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GIC, Temasek eye trillions of growth in climate adaptation market

GIC, Temasek eye trillions of growth in climate adaptation market

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.

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Managing Japan’s public pension reserve

Japan’s Government Pension Investment Fund (GPIF) has $1.4 trillion in assets and is the world’s largest pension fund. The institutional structure and the investment style of GPIF differ from those of other public pension reserve funds. This article describes how GPIF is structured and how it works,then compares it with Canadian and American public pension

Public pension governance and asset allocation

This paper from Matt Dobra and Bruce Lubich, of the Methodist University in North Carolina and the University of Maryland University College, respectively, analyses the relationship between governance, asset allocation, and risk among state and local government-operated pension systems in the United States of America. It is argued that governance influences investment decisions and risk profiles of public

A Framework for Examining Asset Allocation Alpha

Recognising that different asset allocation portfolios are suitable for investors with different needs, Jason Hsu and Omid Shakernia think it is probably too ambitious to establish a unifying structure for determining benchmark asset allocation portfolios. Instead, they propose a framework for thinking about asset allocation alpha, assuming that investors have suitably determined their asset allocation policy portfolio. And the framework is:

A healthier way to de-risk

Defined-benefit funds all over the world are focused on de-risking but the amount of innovation and players to meet this demand is wanting. Until now. A new report by the Pensions Institute at the Cass Business School examines the emergence of medically enhanced, underwritten or enhanced, bulk buy-ins, in which trustees buy a bulk annuity

Raising ESG ratings with improved returns

While environmental, social and governance factors may be all the rage in investment strategies, the right tools to measure results of their implementation would make tangible what skeptics might think are the emperor’s new clothes. Cue researchers Zoltán Nagy, Doug Cogan and Dan Sinnreich from MSCI with their December 2012 paper, Optimizing ESG Risk Factors

GTAA and institutional investment management

The $70 billion AIMCo uses global tactical asset allocation to help add return in excess of passive portfolios. This research piece details how it has used GTAA over the past few years, advising other funds that executing a successful GTAA requires developing world-class talent, systems, process and governance.   To access the paper click below

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