Welcome to the weekend, everybody. It’s pouring rain here in California, which is . . . awesome. We need it. With that in mind, here’s some reading material for that comfy chair:
- The Deranged Ramblings of a Crazy Man: I finished a new paper. I’ve been noodling on this one for over a year, as it offers a novel critique of the finance industry based on parallels I see with the food industry. It’s called “Organic Finance: The Ingredients and Incentives in Our Investment Products”. At minimum, it will help you understand why I’ve been so militant about fees and costs over the past few years. Your constructive feedback is always appreciated.
- Sharks with Frickin’ Laser Beams: Norway’s sovereign fund is apparently quite worried about . . . wait for it . . . killer robots. Who isn’t afraid of a killer robot?
- A Very Cool Research Insight: Asset managers who grow up in poor families deliver higher returns than people who grow up in rich families. Scrappy!
- What Oil Rich Countries Do When Oil Is Cheap: The Kuwait National Fund for SME Development is doing what its name says - funding Kuwaiti entrepreneurs. The objective is to diversify the nation away from hydro-carbon industries and create new jobs.
- A New Script For Endowment Managers: In response to the question, “What do you most care about in your investing?,” most endowment managers will say, “We care about returns.” I don’t think that’s a sufficient answer, which is why I find this endowment manager’s response so refreshing: “We care about returns. We care about risk. We care about cost and we care about transparency.” In my view, that’s the right answer.
- Brain Damages: It boggles the mind how much damage the rating agencies created when they gave AAA ratings to garbage assets. They nearly cratered the entire financial system! Well, now they’re starting to have to pay the piper: Moody’s is paying CalPERS $130 million for their negligent AAA ratings of sub-prime assets.
- The Professionals: Sydney-based First State Super, with about $40 billion in AUM, has implemented a series of initiatives to in-source a greater share of its assets. This fund must be getting some great advice from some super smart and well-meaning people.
- Power Struggle: A UK judge says it’s premature to decide who’s in charge of Libya’s sovereign fund, which means the $70 billion L.I.A. remains ungoverned. If this wasn’t already a complete disaster I’d say this ongoing lack of governance was a recipe for one. Alas, this is just more of the same. Sad.
- Collaboration I: The CIO of Japan’s Giant GPIF “gets” why collaboration with peers is required. Here are some more details for nerds.
- Collaboration II: So the Pensions Infrastructure Platform in the UK is really in the business of seeding new infrastructure managers? Am I right about that? Either way, it’s nice to see progress being made. Kudos.
Have a great weekend, everybody!
