Roger Gray has become the first new chief investment officer of the £27 billion Universities Superannuation Scheme (USS) in 17 years, and will reconsider the fund’s use of regional equity mandates. In the British pension environment, USS is in a privileged position as one of the few defined benefit schemes that is still open, contributions positive and relatively immature. From an investment point of view, and for the fund’s new CIO, Roger Gray, this allows its investment allocations to be more aggressive relative to its more liability-driven peers, and the opportunity for more exciting investments to be explored, including alternatives. The fund has a broad strategy to move to 20 per cent alternatives, and Gray started the job in September with plans to work “with USS’ investment team and with the trustees to generate the required long-term returns from a broad and judicious mix of asset classes and strategies”.
Hermes taking over the world, one boutique at a time
Hermes Fund Managers, the investment management arm of the BT Pension Scheme (BTPS) in the UK, is following the lead of OMERS in Canada and QIC in Australia by branching beyond the province of its principal client with the aim of being a funds manager for pension funds globally. Hermes’ head of investment, Saker Nusseibeh, said the group’s newly created boutique-of-boutiques structure was “so clearly the future…it’s the crossover we’ve been waiting for.” Nusseibeh said he was excited about the fee flexibility and alpha sources that could be achieved by a funds manager which is owned by an institutional investor.
Hermes taking over the world, one boutique at a time
Hermes Fund Managers, the investment management arm of the BT Pension Scheme (BTPS) in the UK, is following the lead of OMERS in Canada and QIC in Australia by branching beyond the province of its principal client with the aim of being a funds manager for pension funds globally. Hermes’ head of investment, Saker Nusseibeh, said the group’s newly created boutique-of-boutiques structure was “so clearly the future…it’s the crossover we’ve been waiting for.” Nusseibeh said he was excited about the fee flexibility and alpha sources that could be achieved by a funds manager which is owned by an institutional investor.
Greencape soft-closes fund…halfway to capacity
Challenger-backed Australian equity boutique, Greencape Capital, has soft-closed its Broadcap Fund to ensure its funds under management do not exceed $1 billion, even though there is only $550 million in the strategy at present. The Melbourne-based boutique, majority-owned by its four staff (of whom three worked together at Merrill Lynch Investment Managers) will take top-ups from existing institutional investors in the Broadcap Fund, and it remains open for relatively lucrative retail flows. But it will turn away prospective wholesale investors because the firm was “serious” about keeping FUM under $1 billion, according to Greencape co-founder and portfolio manager Matthew Ryland.
Greencape soft-closes fund…halfway to capacity
Challenger-backed Australian equity boutique, Greencape Capital, has soft-closed its Broadcap Fund to ensure its funds under management do not exceed $1 billion, even though there is only $550 million in the strategy at present. The Melbourne-based boutique, majority-owned by its four staff (of whom three worked together at Merrill Lynch Investment Managers) will take top-ups from existing institutional investors in the Broadcap Fund, and it remains open for relatively lucrative retail flows. But it will turn away prospective wholesale investors because the firm was “serious” about keeping FUM under $1 billion, according to Greencape co-founder and portfolio manager Matthew Ryland.
Kill complexity, just follow the money: Schroders
The head of Australian equities at Schroders Investment Management, Martin Conlon, has argued that good investment analysis looks first at the ungeared cashflows of companies. The industry’s favoured valuation yardstick, the price/ earnings ratio, was unreliable because it introduced leveraged profits into the process. The importance of finding the true source of cashflows was demonstrated during the Telstra floats, in which investors – Conlon included – bought the cashflows generated by a 90-year-old copper network, which turned out to be near the end of its useful life.
Kill complexity, just follow the money: Schroders
The head of Australian equities at Schroders Investment Management, Martin Conlon, has argued that good investment analysis looks first at the ungeared cashflows of companies. The industry’s favoured valuation yardstick, the price/ earnings ratio, was unreliable because it introduced leveraged profits into the process. The importance of finding the true source of cashflows was demonstrated during the Telstra floats, in which investors – Conlon included – bought the cashflows generated by a 90-year-old copper network, which turned out to be near the end of its useful life.
Hedge FoFs talk up process, not manager access, in post-crisis regime
Following the Madoff scandal and liquidity pressures of 2008, hedge fundof- fund (HFoF) managers say their game has changed from one of ensuring ‘access’ to rare and skilled managers to ‘process’, in which research and due diligence on underlying managers should deliver sound strategic advice and identify poor funds. The theme of access to rare hedge fund talent drove many HFoF sales pitches in the years preceding the financial crisis, but diminished in importance after Madoff and a period of widespread losses and liquidity pressures. Institutional investors are now putting more emphasis on the due diligence that HFoFs perform on managers, and want more insight into their investment processes.
Hedge FoFs talk up process, not manager access, in post-crisis regime
Following the Madoff scandal and liquidity pressures of 2008, hedge fundof- fund (HFoF) managers say their game has changed from one of ensuring ‘access’ to rare and skilled managers to ‘process’, in which research and due diligence on underlying managers should deliver sound strategic advice and identify poor funds. The theme of access to rare hedge fund talent drove many HFoF sales pitches in the years preceding the financial crisis, but diminished in importance after Madoff and a period of widespread losses and liquidity pressures. Institutional investors are now putting more emphasis on the due diligence that HFoFs perform on managers, and want more insight into their investment processes.
No more free kicks: Frontier’s vision for funds manager fees
The percentage-based MER should become a thing of the past, and performance fees should combine with a flat-dollar cost-recovery base fee if funds managers are to be motivated in a more sustainable way, writes Frontier Investment Consulting’s managing director, Fiona Trafford-Walker .
No more free kicks: Frontier’s vision for funds manager fees
The percentage-based MER should become a thing of the past, and performance fees should combine with a flat-dollar cost-recovery base fee if funds managers are to be motivated in a more sustainable way, writes Frontier Investment Consulting’s managing director, Fiona Trafford-Walker . Target-date funds are dangerously misused: survey
New research from the US shows that a high proportion of both pension fund sponsors and individual investors are misusing target-date funds, which is likely to lead to suboptimal investment outcomes. The research, by global manager Janus Capital in association with a magazine company and a research group, shows that investor education is particularly inadequate for these types of funds, where 20 per cent of those who had target-date funds thought the products came with a capital guarantee. More than two-thirds believed they needed to be blended with other funds, even though the whole point is that the vehicles are balanced but with asset allocations which change with time , thus designed to be used as default options.
