Alternative & Innovative Investment Strategies for Pension Funds
September 12, 2019
London – Le Meridien Piccadilly, London
This conference seeks to help pension funds to review the place of alternative and innovative investment strategies in their portfolios. We will look at a range of different strategies seeking to assess their impact on diversifying risks, improving returns and/or funding levels and on meeting specific income requirements. We will also aim to include consideration of practical issues such as liquidity, fees, transparency and implementation.
Alternative & Innovative Investment Strategies for Pension Funds
Registration and coffee
Welcome and opening remarks
Diversification - Portfolio Construction & Opportunities
Chief Investment Officer
QMA Wadhwani, A PGIM Business
None of us knows with certainty what the markets will bring in the next few years. However, we can recognise that the years prior to 2018 have been exceptionally benign. This has meant that diversification - constructing more robust total portfolios - has been both unrecognised and unrewarded. If we are entering a period of more volatile markets, which the first half of 2019 has hinted at, the rules of the game are already changing and diversification is coming back into fashion. Now is the time for clients to look at the robustness of their portfolio construction through fresh eyes, focusing on the underlying exposures that will drive the outcome.
CFA, Product Specialist
Credit Suisse Asset Management
Supply Chain Finance Capabilities
As businesses expand and face an ever-changing global environment, they are looking for the most efficient ways for balance sheet optimizations. In the light of higher cost of capital driven by regulatory changes imposed on banks, conventional methods of obtaining working capital like direct lending are becoming a less attractive solution. By using advanced financial technology, supply chain finance offers a set of solutions that enable companies to optimize working capital and enhance their liquidity positions by unleashing billions of dollars trapped in their supply chains each year. Being short-term in nature, supply chain finance offer investors an opportunity to invest on a short-term basis while earning attractive returns. More-over trade receivables’ low correlation to traditional fixed income investments enables investors to diversify the return profile of their portfolios. Nonetheless, the market potential for supply chain finance remains so far largely untapped.
Vice President of Liability-Driven Strategies
PGIM Fixed Income
A New Approach to Traditional Cashflow Matching
Cashflow driven investing (CDI) is a relatively nascent concept in the UK. However, U.S. pension plans, due to their focus on the accounting valuation of the pension liability, have been implementing cashflow driven credit portfolio construction for 30 years. During this period, the approaches have advanced past precise cashflow matching to acknowledge: 1) the inherent uncertainty in liability cashflows; 2) the crowded trades created by liability driven investors; 3) the devastating effects of credit migration on bond total returns; and 4) the huge dispersion in risk-adjusted reward across the fixed income markets. This presentation will challenge some of the traditional cashflow matching approaches and outline an alternative that focuses on maintaining and improving funded ratio outcomes by maximizing the efficiency of the funded ratio risks taken.
Secured Income and a View on Crowding
Head of Markets and Quantitative Research
Macquarie Fixed Income
Secured Finance: An Alternative Income Solution
Focusing on income and capital preservation, secured finance strategies can form part of a pension fund’s defensive allocation or cashflow-driven investment approach. Allocating across a range of debt securities featuring collateral backing or secure cashflows, these strategies can also deliver enhanced risk-adjusted returns via access to illiquidity, complexity and scarcity premia, traditionally challenging to harness from other asset classes. In this presentation we’ll explain how a multi-asset approach to secured finance may effectively support a pension fund’s long-term investment objectives.
Director, Alternative Assets
Allianz Global Investors
Co-ownership in UK housing: challenges of being a first mover
Real Assets continue to provide pensions schemes attractive returns and cashflows. However, today’s challenge is extending the comfort-zone to new innovations such as residential property. The UK residential market has previously been hard to access for UK institutional investors, with a lack of scaleable solutions from a fragmented market. We will explore an innovative solution that allow investors the chance to access this asset class via a co-ownership model. Institutional investors can have the possibility to achieve valuable inflation linked cash flows and the societal benefit of helping buyers get onto the property ladder.
Head of the Asset Solutions Team
Wells Fargo Asset Management
Nobody Goes There Anymore. It's Too Crowded!
Crowding reflects a collective belief in a risk premiums existence, yet its garnered a bad reputation in the financial media. We've all heard the warning bell: as more portfolio owners chase the benefits of a particular investment strategy, the subsequent surge in flows will lead to negative outcomes. Without crowding, risks are only idiosyncratic and not systematic. Therefore, we embrace crowding, this presentation explains why.
Drinks and lunch
Practical Session & Case Studies
Dynamics of Innovation and Risk
Innovation is usually viewed by economists and policymakers as a productivity-enhancing force, powering economic growth in modern capitalist societies. Innovation is no less sought after in the investment industry, where new products are assumed to help investors meet their differing objectives. However, this optimistic view ignores the damage that can be done by innovations in the financial sector, where agency issues and complexity create the potential for negligence and rent extraction. This session will explore the merits of a more cautious and questioning approach to innovations in investment strategy as a corrective to the generally rosy view presented across the industry.
Practicalities of applying ESG and Responsible Investment criteria to Alternative & Innovative Investment Strategies
A brief introduction to the importance of applying ESG and RI criteria to alternative & innovative investment strategies; a suggested framework approach and the current landscape and possible opportunity.
Pension Fund Case Study:
Drinks reception and close of conference
The conference is by invitation only for pension funds and other institutional investors. If you are not already receiving an invitation please contact us. A limited number of Complimentary invitations are usually available to genuine pension fund representatives (executives and trustees) and other approved institutional investors. However, to ensure we have room for as many funds as possible, we have to limit free places to 2 attendees per approved organisation thereafter a reduced rate fee is payable per delegate. Furthermore, SPS always reserves the right of admission (free or paid) and our decision is final.
Le Meridien Piccadilly Hotel, London
London W1 0BH
Hotel Tel: 08700 400 8400
Hotel Fax: 020 7437 3574
The hotel is located on the north side of Piccadilly, close to Piccadilly Circus, only two minutes walk from Piccadilly Circus underground station.