It’s a long weekend down on the Avenue of Giants. Be back on Tuesday. In the meantime, here’s some news and research for your reading enjoyment:
First, today’s news:
- Agree to Agree: What can communists and conservatives both agree on? In Cyprus at least, they agree on the need for setting up a SWF .
- Bad Idea Jeans I: “Many institutional investors are going into alternative assets in ways we have never seen before.” (“Let’s make it 200!”).
- Bad Idea Jeans II: The Kazakh National Investment Corporation is very keen on hiring some hedge fund of funds (...apparently the fund likes to pay 3-and-30 for a discount to public market returns).
- Risk On: “All strategies are running leverage above their average two-year levels except for multi-strategy and high-grade fixed income.” Here. We. Go.
- Guns: New York’s Teachers Pension will divest from all of its publicly traded gun-makers.
- Street Smarts: Welcome to the Avenue of Giants; get a daily dose in your inbox
- Engagement: Kudos to CalSTRS for trying to add value to a portfolio company. I have to ask: When did this become the exception to the rule? It seems completely normal to me for an investor to take an interest in a portfolio company... but some still view this behavior as “activist investing” in a negative sense. (Truth is, I know the answer to this: It goes back to this paper in 1993, which pointed out that pension funds are prone to politicized investments... but that’s based on ineffective governance within these pensions, which we all agree need to be fixed. So let’s move on.)
- Long and Short: The New Zealand Superannuation Fund sold ~7 percent of the Auckland International Airport (retaining 2%).
Second, here’s some interesting research and articles for your long weekend:
- Richard Eccleston has a new paper entitled, “Australia’s Future Fund: A Future Beyond the GFC.” Here’s a blurb: “Australia’s Future Fund (FF) was created in 2006 as a long-term savings fund designed to meet the Australian Government’s future public service pension liabilities. With the onset of the financial crisis, few commentators thought the Australian Government would have the capacity or interest to continue investing in the FF. However, in the context of Australia’s rapid, commodity-driven recovery from the crisis there is a growing case that the FF should play a central role in a new fiscal policy framework designed to manage the risks associated with the current resources boom. The paper explores these arguments and the politics associated with implementing such a framework and in so doing highlights the political constraints associated with implementing SWFs in advanced democracies.”
- Louise Bowman has a new long-form article over on Euromoney entitled, “Institutional buyers jostle for position in new infrastructure debt market.“ Here’s a blurb: “The much-vaunted institutionalization of the project finance debt market is now under way as asset managers, pension funds and insurance companies pile into infrastructure lending. However, the risks and rewards they find there might take some getting used to.”
I hope you enjoy. Have a great weekend!
