dakota’s Post

Canadian public pension fund Alberta Investment Management Corporation (AIMCo) has joined peers in offloading chunky private equity portfolios as markets pick up, taking advantage of a revival of interest in private equity and rebalancing its portfolio. Global SWF givers an overview of the sell-off of secondaries by APG, CalPERS, CPP Investments | Investissements RPC, Caisse de dépôt et placement du Québec (CDPQ), and BCI. Despite the sales, Global SWF data indicates that in H1 2024 appetite for private equity funds has grown. The capital is heading instead towards more sophisticated products aligned with megatrends such as demographic change, AI and sustainability. https://lnkd.in/eiJN_E_x

Many unit trust investors and retirement savers are invested in multi-asset funds that spread investment risk across shares, bonds, listed property and cash. Recently, the decisions managers of these funds can take have increased – they can take 45% of the fund offshore, put 45% in infrastructure and 15% in private equity. You should be aware that a wider range of decisions will result in a broader range of returns from funds. Our latest article explains why.  https://lnkd.in/dfGhK_hB #InvestmentForum2024 #SmartAboutMoney #financialeducation #investment #investmentrisk #unittrust #retirementplanning Victoria Reuvers (Sheppard), PSG Asset Management, Coronation Fund Managers, M&G Investments Southern Africa, Morningstar, The Collaborative Exchange, Prescient

Did you know? In 2015, the government announced a plan for all 89 LGPS Funds to pool their investments, aiming to reduce investment management costs. As a response, the Brunel Pension Partnership Limited was formed in 2017, to explore pooling investment assets across ten Funds, including: Cornwall Pension Fund Environment Agency Pension Fund Avon Pension Fund Buckinghamshire Pension Fund Devon Pension Fund Dorset Pension Fund Gloucestershire Pension Fund Oxfordshire Pension Fund Somerset Pension Fund Wiltshire Pension Fund Together, these funds manage approximately £35bn in assets. The goal? Achieve long-term savings by: Lowering investment management costs Enhancing the effectiveness of asset management Pooling leverages collective buying power to realise these savings. Importantly, local accountability remains intact, with each fund maintaining control over strategic decisions, including asset allocation. The ten Funds and the operator, Brunel Ltd, have a mutual commitment to building a financial system which is fit for a low carbon future, and feel this commitment is pivotal to driving change together. 

CalPERS has prioritized the overhaul of its private equity program over the past year. Yet its new CIO comes from New Zealand's sovereign wealth fund, which has a PE portfolio roughly the same size as the Ohio Police fund. #PE #privateequity #VC #venturecapital #CalPERS #allocation #institutionalinvestors #allocators #privatedebt #pensions #pensionfunds https://lnkd.in/ezTXzg6Z

The nation’s second-largest super fund, Australian Retirement Trust, is well-known for bucking the trend of internalisation, keeping the bulk of its assets with specialist external managers. But the fund’s senior PM, Peter Barany, says chasing past performance can result in a “merry-go-round" of disappointing mandate decisions. #managerselection #financialadvisers #financialadvice https://lnkd.in/gDqdtfx9

Why has "an existential crisis gripped" UK fund management? asks Ben Wright in his latest column. In brief, Ben explores several reasons over the last 30 years, and where next? “The original sin in this country was that we messed up our pensions reform,” I argued to him “We moved from defined benefit to defined contribution but without creating a system like Australia with far larger, professionally run pots of money to invest across all asset classes.”  Pension fund assets in Australia are up 632% in the last decade vs 129% in the UK. Second, how different firms capitalised - or were pincered - by the rise of passive and alternatives: "Some of this was both predictable and predicted. Almost exactly 20 years ago, Huw van Steenis, then head of the global financial research team at Morgan Stanley came up with his “barbell” theory to explain how things would likely shake out. He forecast that most money would gravitate to either cheap, index-tracking funds or high-return specialist managers, making life hard for traditional active asset managers in the middle." There are still quite a few fund managers in what you might call the ‘mushy middle’,” said Toby Nangle. “The question now is whether these firms will die or be taken out.” "Nevertheless, there are plenty of unlisted fund managers – including Marshall Wace, Chris Hohn’s TCI, CVC Capital Partners, John Armitage’s Egerton Capital and Stephen Butt’s Silchester International Investors – that have been highly entrepreneurial and extremely successful. "    Well worth the long read: https://lnkd.in/ekXWbMCS Views? #investing #economy #investmentmanagement The Telegraph

The Canadian pension model is under threat today. When you see trillions of dollars in assets, when you see a government that is running deficits, when you see economic malaise—and we’ve seen this in other jurisdictions—this is the time when pension assets get raided. And I’ll use that term, because that is the risk that I think the Canadian model faces today.

Our pension funds, stewards of public capital, have been woefully absent from any conversation around impact investing or investing in ways that will create enduring social and environmental benefits for their plan holders outside of ensuring a sustainable fund that can achieve its payouts. With the exception of CDPQ and Fondaction, pension fund executives boast that they have no “home bias”. And then we complain about a lack of investment in Canada, stagnation, infrastructure gaps, a housing shortage, lack of risk capital for entrepreneurs, etc. ”Today the CPP Fund sits on $200 billion of excess investment returns. If the projections pan out, that number grows to $375 billion by 2031, a massive financial reserve that is superfluous to funding the CPP to the 2090s according to the most recent three reports of the chief actuary. In short, the federal government is running a hedge fund that’s sitting on hundreds of billions more than it expected.” Funnelling just the excess funds into investments that can create demonstrable social and environmental good for Canadians using a preservation of capital approach rather than an aggressive growth target would catalyze small business creation and expansion, build housing at a scale we’ve never seen before, transform our energy grids, and so much more.  CPP operates the way they do with limited if any involvement in impact investing because we’ve given them a social license to do so. But let’s not forget who’s money it is. https://lnkd.in/gyeutxV8

We have spent significant time with $800 billion+ #korean public pension fund manager KOREA NATIONAL PENSION SERVICE and they are no doubt one of the more sophisticated #institutionalinvestors across the globe, with offices in #seoul, #singapore, #newyorkcity and access to the best fund managers and investors. Increasing their activities in #secondaries continuation funds and #gpstakes could be another avenue in diversifying and enhancing their returns profile. While still quite nascent, the #asiapacific market for GP-led secondaries, LP secondaries, and GP stakes continues to make progress and with LP desire/need for liquidity and portfolio rebalancing and optimization, the topic is almost daily in conversation. I am also seeing more GP stakes managers in Asia not only for fundraising, but also discussing investment with managers across asset classes in Asia Pacific, and several sovereign/national pension funds increasing their activities in this theme here in Asia. #alternativeassets #privateequity #privatemarkets #korea #capitalmarkets #sovereignwealthfunds #pensionfunds https://lnkd.in/gmnXTh6F

A thought provoking article from my friend and colleague Henry Tapper I’m a great advocate for the LGPS: free from the screaming insanity of corporate DB accounting (surely one of the greatest acts of needless, irreparable, fiscal and social self-harm of the modern age) and malign regulatory influences on investment strategy (see the FT graphic herein), and having ditched the grossly inequitable final salary model for career average, the LGPS has demonstrated itself to be a financially sustainable bulwark, providing certain retirement income to its members. Moreover, it has done so on very slender means, in large part due to the dedication of its (often modestly remunerated) officer corps, reflecting their immersion (as council officers) in an interdisciplinary milieu of public service with a deep connection to their locality. Nevertheless, I’m also an advocate of consolidation in most things connected to asset and liability management - there are huge and obvious economic and risk wins on both sides of the balance sheet, however all of us in the industry need to think through the consequences of the boldest moves, and think how to preserve the best parts of the current system; including the public service culture of the LGPS buy side and the diversity of thinking, choice and innovation provided by a thriving asset management industry. More to say on this at the Local Government Chronicle panel in Birmingham next month on Friday 13th.