The Institutional Investor Global Sovereign Funds Roundtable in London is now over, and it was great. The topics ranged from the implementation challenges associated with innovative investment strategies to building a 21st century data infrastructure for institutional investors. Stephen Glover and the II team did a remarkable job. They’ve got it down to a science at this point. And with over 90 sovereign funds and central banks in the room – which is a lot – there were some solid coffee-break discussions.
Anyway, in keeping with the anonymous and off-the-record format, the below insights reflect a smattering of my personal take-aways and views coming out of the meeting:
Data: Institutional investors have to start thinking hard about their internal data architecture. This is an expensive and taxing endeavor, but it’s absolutely needed.
Organizations: SWFs are shifting to more active, more private, more direct, and more alpha driven investment strategies. However, they are going into these new strategies with old management systems and organizations. They are, in effect, taking knives to a gunfight. These funds thus need as much organizational change as they do changes to their investment strategies.
Long-Term: If you’re really interested in understanding how to extend the time horizon of your investments, you should start by understanding the principles of ‘ESG investing’. There are some remarkably useful tools here that seek to price long-term risks into what would otherwise be a short-term institution.
Innovation: Developing innovative strategies within a sovereign fund demands patience, good teams, local expertise, implementation and, of course, governance.
Quotes: These two quotes don’t really mean all that much, but I wrote them down because I thought they were awesome:
“There are decades when nothing happens. And there are weeks when decades happen.”
“US Treasuries are a return free risk asset.”
Anyway, thanks again to the II team. Great event!
