Browsing: Institutional Asset Management

Pension, Endowment, Foundation, Family Office, Sovereign Wealth
Governance issues

Institutional Asset Management

State Street Forecasts on Smart Beta

Dec 12th, 2017 | Filed under: Allocating to A.I., Alpha & Beta, Finance & Economics, Institutional Asset Management, Institutional Investing, Liquid Alternative Investiments, Newly Added, Other Topics in A.I., Smart Beta

State Street Global Advisors has a new paper out that seeks to help State Street clients “refine their own strategic asset allocation” especially insofar as their portfolios include smart beta investments, by explaining how State Street forecasts returns, and where the forecasts as to some of the factor returns standRead More


University endowments in the crosshairs

Dec 11th, 2017 | Filed under: Endowments & Foundations, Institutional Asset Management, Institutional Investing, Newly Added

By Charles Skorina The U.S. has the greatest university system in the world.  But it’s expensive.  And congress is about to make matters worse by taxing the endowment earnings of “large” private college and university endowments. The latest congressional proposal aims to slap a 1.4 percent excise tax on theRead More


A look at the European pension industry

Nov 28th, 2017 | Filed under: Allocating to A.I., Alpha & Beta, Institutional Asset Management, Institutional Investing, Newly Added

Three years ago, Amin Rajan, the CEO of CREATE-Research, prepared a study of the way that pension plans had reacted to the global financial crisis and to the subsequent financial conditions.  His study continues to be worthy of attention in 2017. The study included a survey of 190 pension plansRead More


Exley on Cashflow-Driven Investment

Nov 26th, 2017 | Filed under: Asset allocation, Asset Allocation Models, Institutional Asset Management, Liability Driven Investing, Newly Added

A new paper by Jon Exley, solutions manager of Schroders, discusses cashflow-driven investment (CDI) as a system of portfolio management that accepts and builds upon liability-driven investment (LDI). The idea in both cases is to match all future projected liability payments as they fall due, which is definitionally the imperativeRead More


Advice to Hedge Fund Managers on Attracting, Retaining Investors

Nov 19th, 2017 | Filed under: Fees, Hedge Fund Industry Trends, Hedge Funds, Institutional Asset Management, Institutional Investing, Newly Added, Structure of the Hedge Funds Industry

Ernst & Young has released a new survey on how hedge fund managers may “embrace innovation to illuminate competitive advantages,” that is, to attract and retain investors and their assets. Manager may need such advice, because the investors surveyed said they are more likely to decrease allocations to hedge fundsRead More


Endowment costs: The secret history

Nov 6th, 2017 | Filed under: Endowments & Foundations, Institutional Asset Management, Institutional Investing, Newly Added

By Charles Skorina In early 2016 certain Congressional committees sent letters to 65 major private universities asking for information about their endowments.  They supposedly had an urgent need for this data and gave the schools just 30 days to respond. It was worded as a polite request, but it cameRead More


EIU on Institutions and Time Horizons

Oct 19th, 2017 | Filed under: Allocating to A.I., Institutional Asset Management, Institutional Investing, Newly Added, Risk management, Risk Management Strategies & Processes

With the  sponsorship of Franklin Templeton, The Economist Intelligence Unit (EIU)  has surveyed  143 investing institutions in North America (part of the global sample of 571) in order to study recent shifts in their portfolio allocation, especially with an eye to the risks that concern them and the length ofRead More


Outsourced assets under management up 18% year-over-year

Oct 18th, 2017 | Filed under: Consultants, Endowments & Foundations, Institutional Asset Management, Institutional Investing, Newly Added

By Charles Skorina With 76 firms heard from, we’re now reporting $1.62 trillion in full-discretion assets under management by outsourced chief investment officer firms. That’s a year-over-year jump of $292 billion – or 18 percent – since September, 2016. The number of reported RFPs is also rising as institutions seek better returnsRead More


The State of Alternative Investments in Australia and New Zealand 

Oct 8th, 2017 | Filed under: Institutional Asset Management, Institutional Investing, Newly Added, The A.I. Industry

A new Preqin paper presents the state of the alternatives investment industry in Australia and New Zealand. Mark O’Hare, the CEO of Preqin, says in a Foreword that Preqin’s databases track 481 fund managers active in one or the other of those two countries, and 443 “significant institutional investors” TheRead More


AIMA and SGPS on Managed Futures and CTAs

Sep 28th, 2017 | Filed under: Algorithmic and high-frequency trading, Allocating to A.I., Business News, Commodities, CTA, Institutional Asset Management, Investing in Commodities, Macro and Managed Futures Funds, Newly Added, The A.I. Industry

The Alternative Investment Management Association and Societe Generale Prime Services have together put out a white paper about managed futures funds and the commodity trading advisers who manage them. A key themes of the paper is that managed futures strategies aren’t as risky as are typical investments in equity markets.Read More


Paying the Top Guns of Institutional Investing

Sep 11th, 2017 | Filed under: Endowments & Foundations, Institutional Asset Management, Institutional Investing, Newly Added, Personalities in AI

By Charles Skorina Last month in Part One of this report we focused on relative performance.  We ranked 107 CIOs by trailing 5-year returns. Now, we focus on how much institutions pay these excellent people. The bare comp numbers lead us to the tricky and perennial question of whether their payRead More


Wide Range of Investors Has Wide Range of Opinions on their Managers

Sep 10th, 2017 | Filed under: Allocating to A.I., Institutional Asset Management, Institutional Investing, Newly Added, The A.I. Industry

Intralinks, in partnership with Global Fund Media, has surveyed the opinions of limited partners: they’ve been asking LPs what they think about their GPs/managers in the alternative investment context. The bottom line of the survey is that LPs are looking in the near future to increase their allocations in alternatives.Read More


Sovereign Wealth Funds: Partners and Capability

Sep 7th, 2017 | Filed under: Allocating to A.I., Alpha & Beta, Institutional Asset Management, Institutional Investing, Newly Added

Sometimes it pays to read footnotes and end matter, because that turns out to be where the story is. Bocconi University’s Sovereign Investment Lab has published its latest annual report on sovereign wealth funds, and this gives us a case in point. The report says that 2016 was far fromRead More


NEPC Surveys E&F Managers About Alternative Investments

Aug 27th, 2017 | Filed under: Allocating to A.I., Endowments & Foundations, Institutional Asset Management, Institutional Investing, Newly Added, The A.I. Industry

NEPC, the investment consulting group that caters especially to endowments and foundations, has posted a survey about what such institutions think of marketable alternatives. This broad category “marketable alternatives” includes direct hedge funds, funds of hedge funds, liquid alternatives, and global asset allocation. Eighty-seven percent of the E&F respondents inRead More


Build Value: Don’t Just Meet Quarterly Targets!

Aug 15th, 2017 | Filed under: Allocating to A.I., Alternative Investments in Context, Institutional Asset Management, Newly Added, The A.I. Industry

FCLT Global, a new not-for-profit organization that seeks to promote long-term thinking in business and finance, has issued a manifesto, “Rising to the Challenge of Short-Termism.” The paper was written by Dominic Barton, Jonathan Bailer, and Joshua Zoffer. Each is affiliated with McKinsey & Company, which is one of theRead More


Boston College’s CRR on Alternatives in Pension Portfolios

Aug 13th, 2017 | Filed under: Asset Allocation Models, Institutional Asset Management, Newly Added, The A.I. Industry

The Center for Retirement Research at Boston College has put out a white paper about public pensions and alternative investments.  It asks two questions: which plans have made the largest shift into alternatives? And, how has that shift mattered to their returns and risk? The report begins with the observationRead More


A Simple Approach to the Management of Endowments

Aug 7th, 2017 | Filed under: Allocating to A.I., Asset allocation, Asset Allocation Models, Endowments & Foundations, Institutional Asset Management, Newly Added

By Hossein Kazemi & Kathryn Wilkens, CAIA Endowments and foundations are tax exempt and charitable organizations that rely on permanent pools of capital to fund their activities. These pools of capital are owned by institutions such as colleges, universities, hospitals, museums, scientific organizations, charitable entities, and religious institutions. When well-fundedRead More


Lessons from University Endowments

Jul 23rd, 2017 | Filed under: Allocating to A.I., Asset allocation, Asset Allocation Models, Endowments & Foundations, Institutional Asset Management, Institutional Investing, Newly Added

In a recent article for The Journal of Investment Consulting, John Mulvey and Margaret Holen look at the practice of asset allocation among large U.S. university endowments. They focus on asset category definitions in the hope of throwing some light on “the movement to define asset categories with reference toRead More


Preqin and NXT Capital on the Filling of a Post-GFC Vacuum

Jul 20th, 2017 | Filed under: Allocating to A.I., Institutional Asset Management, Newly Added

Preqin, in collaboration with NXT Capital, has surveyed institutional investors about the U.S. lower middle-market direct lending space, and has issued a report on their attitudes. The gist of the report is that investor appetite for the lower middle market “has steadily gained momentum in the past decade and …Read More


The 100+ Top Guns of Institutional Investing

Jul 12th, 2017 | Filed under: Endowments & Foundations, Institutional Asset Management, Institutional Investing, Newly Added, Personalities in AI, Who's Who

By Charles Skorina This letter looks at the most recent five-year performance of over one hundred of the world’s best institutional investors. Endowment chief investment officers have an infinite investment horizon, a global playing field, and can invest in anything anywhere – within the broad policy limits set by theirRead More


Sovereign Funds: Illiquidity and Transparency

Jun 22nd, 2017 | Filed under: Allocating to A.I., Institutional Asset Management, Newly Added, Real Assets

News reports in the waning days of the second quarter of 2017 indicate that sovereign wealth funds, especially those of the Middle East, have turned in a big way toward real estate. Invesco says that the region’s SWFs allocated 11% of their portfolios to international real property in 2016. RealRead More


Do Teachers Pensions Need Trumpian Negotiators?

Jun 20th, 2017 | Filed under: Allocating to A.I., Hedge Funds, Institutional Asset Management, Institutional Investing, Newly Added

The American Federation of Teachers (AFT) has issued a lengthy rebuke to and critique of the fee structure of the alternatives investment industry; in a position paper it calls The Big Squeeze. Should the title be considered obscure, the subtitle is clearer about the paper’s thesis, “How Money Managers’ FeesRead More


Pension Funds’ Portfolio Decisions: The Dutch Data

Jun 11th, 2017 | Filed under: Allocating to A.I., Institutional Asset Management, Institutional Investing, Newly Added

DeNederlandscheBank (DNB) issued a working paper this spring about the impact of liquidity and capital constraints on defined benefit pension plans. The paper has three authors, Dirk Broeders, Kristy Jansen, and Bas Werker. The first named author, Broeders, is the only one formally affiliated with DNB. The others are affiliatedRead More


Leading the charge into OCIO battlespace: 2 Harvardians invent an industry

Jun 7th, 2017 | Filed under: Endowments & Foundations, Institutional Asset Management, Institutional Investing, Newly Added

By Charles Skorina In 1973, two former Harvard roommates and budding entrepreneurs – Jim Bailey and Hunter Lewis – took on an assignment to review the investments held in their school’s endowment. Things were very different back then.  A treasurer of the Harvard Corporation with the wonderfully Bostonian name ofRead More


State Pensions and Complex Investments

May 14th, 2017 | Filed under: Allocating to A.I., Alpha & Beta, Institutional Asset Management, Institutional Investing, Newly Added

A recent report from the PEW charitable trusts discusses the degree to which the pension funds of the states of the United States are increasing their use of “complex investments.” It also speaks to the consequences of this move. The term “complex investments” is used here to describe any departureRead More


SWFs: Growth Slows but Continues

May 4th, 2017 | Filed under: Allocating to A.I., Institutional Asset Management, Institutional Investing, Newly Added

Preqin’s new Sovereign Wealth Fund Review makes the point that total assets under the management of SWFs continue to grow, but the rate of growth is notably slowing. This graph, measuring in US$ trillions, illustrates the growth trend since the financial crisis. Although the space grew by $.76 trillion betweenRead More


What makes a great Chief Investment Officer?

May 1st, 2017 | Filed under: Endowments & Foundations, Family Offices, Institutional Asset Management, Institutional Investing, Newly Added

By Charles Skorina All professional investors want to make money.  The question is, how and for whom? In the for-profit world of Wall Street asset managers and retail mutual funds, the differences among managers reflect investor appetites, time horizons and risk tolerances.  They must all serve their customers, or theRead More


Longevity Risk Transfer Markets: Limits to Growth

Apr 30th, 2017 | Filed under: Allocating to A.I., Finance & Economics, Financial Economics Theory, Institutional Asset Management, Institutional Investing, Newly Added

It was a fairly routine item about an accomplished executive changing jobs in the asset management industry, but it caught my eye. A March 2017 news item said that Andrew Reid, until recently the head of corporate pension origination at Deutsche Bank, had left that post to work with InsightRead More


Some Granularity on the Mexican Pension Industry

Apr 4th, 2017 | Filed under: Allocating to A.I., Institutional Asset Management, Newly Added, Operationally Intensive Real Assets, Real Assets

BlackRock has published a research report about pension funds in Mexico, a report produced as part of its broader research project looking into the state of the pension fund industry around the globe.  It shows that the cause of alternatrive investments as a group is the cause of diversification forRead More


Sovereign Wealth Funds: Just Like You and Me?

Apr 2nd, 2017 | Filed under: Allocating to A.I., Institutional Asset Management, Institutional Investing, Newly Added

Sovereign wealth funds, however invulnerable and leviathan-like they may seem to outsiders, have the same concerns as other institutions in the current environment. On the one hand, bond yields remain at historic lows, with $13 trillion of fixed-income securities now commanding negative interest rates. On the other hand, the globalRead More


Survey Respondents: Market Volatility is the Gravest Threat Just Now

Mar 26th, 2017 | Filed under: Allocating to A.I., Alpha & Beta, Institutional Asset Management, Institutional Investing, Newly Added

Natixis Global Asset Management is out with its annual survey of institutional investors and their views about alternative investors. The survey included institutions around the world and of many distinct classes: corporate and public pension funds, insurance funds, sovereign wealth funds, endowments/foundations, managing amongst them $15.5 trillion. The break-down ofRead More


Foundation CIOs and the American Dream: A Conversation With Carnegie’s Kim Lew

Mar 22nd, 2017 | Filed under: Endowments & Foundations, Institutional Asset Management, Institutional Investing, Newly Added

By Charles Skorina This month we focus on the venerable foundations of New York City and one of their most accomplished investment pros: Kim Y. Lew, chief investment officer of the Carnegie Corporation. We have an in-depth conversation with Ms. Lew on her career in foundation investing and the future of womenRead More


The Principal-Agent Problem and Smart Beta

Mar 2nd, 2017 | Filed under: Allocating to A.I., Alpha & Beta, Institutional Asset Management, Newly Added

Economists  devote a good deal of attention to what they call the “principal-agent problem,” defined to include the whole nest of conflicts of interest and moral hazards that arise when one party agrees to work for and make decisions on behalf of another, especially when the goal is to  optimizeRead More


A conversation with UTIMCO’s Bruce Zimmerman

Feb 13th, 2017 | Filed under: Endowments & Foundations, Institutional Asset Management, Institutional Investing, Newly Added

By Charles Skorina Bruce Zimmerman joined UTIMCO as Chief Executive Officer and chief investment officer in June of 2007, six months before the official start of the “great recession” in December 2007 (US National Bureau of Economic Research).But despite a 13% drop in the endowment in UTIMCO’s 2009 fiscal yearRead More


DC Sponsors and PE General Partners: A Good Marriage?

Feb 7th, 2017 | Filed under: Allocating to A.I., Institutional Asset Management, Institutional Investing, Newly Added, Other Issues in Private Investments, Private Investments

The British Private Equity & Venture Capital Association, in a new paper, contends that private equity has a valuable part to play in the portfolios of defined contribution schemes, for the simple reason that the PE world offers high returns in an era of low interest rates. To make thatRead More


Texas Turmoil: UTIMCO picks a new path through a political minefield

Jan 30th, 2017 | Filed under: Allocating to A.I., Asset allocation, Asset Allocation Models, Endowments & Foundations, Institutional Asset Management, Institutional Investing, Newly Added

By Charles Skorina Endowment returns took a beating last year and the turnover in chief investment officers tells the tale. Among the big names to make an exit in 2016 was Bruce Zimmerman, longtime CEO of The University of Texas Investment Management Company (UTIMCO). We wrote about endowment turnover in ourRead More


Pension Institute on the Herding Tendency of Pensions as Investors

Jan 29th, 2017 | Filed under: Allocating to A.I., Asset allocation, Asset Allocation Models, Institutional Asset Management, Institutional Investing, Newly Added

A new paper by the Pension Institute looks at the investing behavior of UK defined-benefit plans over the past 25 years, and finds a degree of correlation that should be worrisome to plan sponsors. The sponsors might want to design an improved incentive structure “that can better motivate pension fundsRead More


OECD Report on Insurer Portfolio Investment Strategies

Jan 8th, 2017 | Filed under: Allocating to A.I., Asset allocation, Asset Allocation Models, Institutional Asset Management, Newly Added

A paper by Helmut Gründl and two associates, discussed at the June 2016 meeting of the Organization for Economic Cooperation and Development, and published “on the responsibility of the Secretary-General” thereof, proposes that the regulators of insurers active in the various member countries should see their role not as theRead More


PGIM:  Not All Alternatives Are Alike

Jan 2nd, 2017 | Filed under: Allocating to A.I., Alpha & Beta, Asset Allocation Models, Institutional Asset Management, Institutional Investing, Newly Added

A new report from PGIM Institutional Advisory looks at an old question: what role should alternative investments play within the portfolio allocation decisions of institutions? The question is especially pressing at the beginning of 2017 because US broad equity indexes have done quite well for years, ever since the marketsRead More


Natixis asks 500 institutional investors to look into the future

Dec 20th, 2016 | Filed under: Allocating to A.I., Emerging markets, Finance & Economics, High-net-worth investors, Institutional Asset Management, Newly Added, The Global Economy & Currencies

Natixis Global Asset Management has released the results of a survey of 500 institutional investors, asking them their views on prospects for 2017. The surveyed institutions expect that political and economic developments could cause an increase in volatility in the year to come, and active managers have to reset theirRead More


AIMA and KPMG on Managed Accounts

Dec 15th, 2016 | Filed under: Allocating to A.I., Institutional Asset Management, Newly Added

AIMA’s new managed accounts guide tells us that an investment manager considering the use of managed accounts should consider certain disadvantages that come with this product, and may want to negotiate around these difficulties with investors. For smaller investment managers in particular, the increased regulatory and operational requirements can beRead More


Amy Falls: Meeting Harvard’s plan B

Dec 5th, 2016 | Filed under: Endowments & Foundations, Institutional Asset Management, Institutional Investing, Newly Added

In late July, Stephen Blyth stepped down as head of Harvard Management Company; then things happened fast. By mid-September, a hire seemed imminent and HMC was said to have winnowed the field down to just two: Narv Narvekar of Columbia and Amy C. Falls of Rockefeller University. Mr. Narvekar, whoRead More


Energy Infrastructure: The Midstream Sector

Nov 10th, 2016 | Filed under: Allocating to A.I., Endowments & Foundations, Institutional Asset Management, Newly Added, Regulatory Environment, The A.I. Industry

Is it a stream or is it a sea? They seem to have gotten their hydrological imagery mixed up. But no, the “sea” in question is a literal sea, though the “stream” in question is a mere bit of imagery, so clichéd as such that no one sees it asRead More


Pension Funds, Hedge Funds, and Allocations

Nov 8th, 2016 | Filed under: Allocating to A.I., Alpha & Beta, Institutional Asset Management, Institutional Investing, Newly Added

A new scholarly paper addresses the puzzle: which institutional investors are best informed? Zhe Chen, of the University of New South Wales, David Forsberg, Macquarie Graduate School of Management, and David R. Gallagher, UNSW Australia Business School,  compare hedge funds, mutual funds, pension funds, and private banking firms to determineRead More


Outsourced CIO assets grow to $1.3 Trillion

Nov 7th, 2016 | Filed under: Consultants, Institutional Asset Management, Newly Added, The A.I. Industry

By Charles Skorina With 74 firms reporting in, total outsourced CIO assets (managed with full discretion) have grown by $240 billion to $1.367 trillion since we published our last list in 2014.  That’s an increase of over 19 percent in two years, implying an annual growth rate of about 9Read More


Judge Rose: Libya’s SWF Heads Knew What They Were Doing

Nov 1st, 2016 | Filed under: Allocating to A.I., Institutional Asset Management, Institutional Investing, Legislation/Court rulings, Newly Added, Regulatory Environment, The A.I. Industry

The economic historians of posterity have their work cut out for them here. There are doctoral dissertations in the works already, no doubt. And in time several scholarly careers will hang on this.   Those scholars will have to make sense of the political developments in late-Qaddafi Libya, of the roleRead More


BLEAK HOUSE–OR THE OUTLOOK ON HEDGE FUNDS NOW

Oct 19th, 2016 | Filed under: Allocating to A.I., Endowments & Foundations, Family Offices, Hedge Fund Industry Trends, Hedge Funds, High-net-worth investors, Institutional Asset Management, Institutional Investing, Investor Relations, Newly Added, Sales & Marketing in the AI Industry

By Diane Harrison Charles Dickens’ Bleak House spins a tale of mystery, intrigue, family dynamics, and irony in the Victorian age that had readers gripped by its indictment of the English court system. While the novel is packed with intricate plot twists and turns, the main story line centers onRead More


Islam, Western Pensions, and Real Assets

Oct 18th, 2016 | Filed under: Allocating to A.I., Institutional Asset Management, Institutional Investing, Intellectual Property, Natural Resources and Land, Newly Added, Operationally Intensive Real Assets, Real Assets

A recent academic discussion of the much-vexed question of Islamic finance (including the always at least implicit query, how does it fit into the broader usually non-Islamic global picture?) focuses on the role in Islam of real assets, understood as tangible objects such as land, buildings, machinery, and commodities. TheRead More


Harvard gives Narv the nod

Oct 17th, 2016 | Filed under: Academic Foundations, Endowments & Foundations, Institutional Asset Management, Institutional Investing, Newly Added, Personalities in AI, Who's Who

By Charles Skorina As all the world now knows, Harvard has selected Columbia’s Nirmal P. “Narv” Narvekar as the new head of Harvard Management Company. His name had been bandied about as a prime candidate for weeks.  We discussed it ourselves in our Aug. 29 newsletter. Reportedly, a few big-endowment CIOsRead More


From UMIFA to UPMIFA: Taking Stock 10 Years Later

Sep 29th, 2016 | Filed under: Endowments & Foundations, Institutional Asset Management, Newly Added

Ten years ago, thus before the global financial crisis, the Uniform Law Commission promulgated the Uniform Prudent Management of Institutional Funds Act (UPMIFA), a successor to an earlier uniform act, the UMIFA. One of the big changes from UMIFA to UPMIFA was the elimination of the concept of “historic dollarRead More