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36 minutes | 2 days ago
57: HESTA's Daniela Jaramillo – Energy Transition, Social Stranded Assets and Systemic Risk
In this podcast, we speak with Daniela Jaramillo, Senior Responsible Investment Adviser with pension fund HESTA about the risk of the transition to renewable energy and a low carbon economy, whether to divest or to continue engagement and socially stranded assets. This podcast is brought to you in partnership with Trillium Asset Management. Please enjoy the show. Overview of Podcast with Daniela Jaramillo: 1:00 Founding a non-profit and moving to London 4:35 What practical steps are you taking to reduce carbon emissions? 5:00 We don’t want to just do carbon accounting. We want to make a real difference in the real world 8:30 Most Australian businesses have the ability to transition (to a low carbon economy), but they need the will and sometimes encouragement of public policy 9:30 Thermal coal divestments and stranded assets 11:40 Do ESG policies introduce unintended skews? Value companies are more asset heavy than growth stocks. 12:30 It is possible to have value in portfolios without deviating too much from benchmarks. 14:00 We are interested in reducing emissions in the real world, not just in our portfolio. So if we simply divested, then that risk is still out there. 17:30 The use of shareholder resolutions is changing in Australia and they are sometimes seen as a way of formally communicating a view to a company. 20:00 Social issues have become real risks for boards. They really need to be ahead of the next movement. Do I have a social stranded asset risk within my organisation? 22:50 Juukan Gorge and financial risk 26:20 Lack of standardisation in ESG ratings 29:00 Big data and ESG research 30:00 SDGs as a framework for solving big problems. 33:00 SDGs from an investment perspective. 34:00 Looking ahead: HEMA, climate transition plan and measurements 36:00 The pandemic and systemic risk
42 minutes | a month ago
56: Cbus' Nicole Bradford - Net zero 2050, SDGs and Greenwashing
Nicole Bradford is Global Head of Responsible Investment for superannuation fund Cbus. In this podcast, we speak about Cbus' commitment to achieve net zero carbon by 2050, the UN-backed sustainable development goals and green washing. This podcast is brought to you in partnership with Trillium Asset Management. Overview of Podcast with Nicole Bradford, Global Head of Responsible Investment, Cbus 3:00 Working for CSIRO in satellite imaging and remote sensing 5:00 General Electric 7:20 ESG then and now 8:30 Corporate scandals 10:00 Are members a driving force behind ESG? 12:00 CBus members are very aware of the issues in workers’ safety 13:00 Achieving net-zero emissions by 2050, what can you do in the portfolio? 16:00 Challenge in reducing carbon emissions in government bonds. 18:00 Data challenges 19:00 Should we start tackling climate change in real assets? 24:00 How do you decide which ESG organisations are worth your time? 26:40 Shareholder resolutions are just one tool in the toolbox and their usage differs per region 31:00 SDGs are absolutely important to investors 32:00 We need to start thinking about the impact of our investments on the world around us 33:00 Cbus has identified seven SDGs that are relevant to our portfolio 35:00 On SDGs and rainbow washing 37:00 Are we adding value to the SDGs? 38:00 If you could solve one ESG issue, what would it be? 40:20 Stranded asset framework, using forward-looking metrics. END
44 minutes | 2 months ago
55: Trillium's Matt Patsky – Trump, Facebook and Fiction in Media
Matt Patsky is Chief Executive Officer and Portfolio Manager at sustainable investment firm Trillium, which was recently acquired by Perpetual. In this interview, we talk about the power of Facebook, truth and fiction in media, excessive remuneration and rainbow washing. We also discuss the impact the Trump presidency has had on the ESG industry. “A shift has occurred [in attitudes towards sustainable investing] that has been fairly dramatic ... and in some strange way that was partially because of Trump. He was anti everything and suddenly people are waking up an saying: ‘What? No, that doesn’t make sense,” Patsky says. Overview of Matt Patsky Podcast: 2:45 I remember thinking: ‘Why aren’t more people going after this information?’ 4:20 Nobody wanted to meet the Head of HR, but we did 6:30 Is sustainable investing about alpha or risk management? 7:15 I realised I found a method to assess what a good management team is 9:30 Should you talk to company management? 10:00 Why are shareholder resolutions important? “For us, the objective is to generate positive societal and environmental change.” 11:15 Bank of America engagement on arctic drilling 12:30 Is achieving a target the only real measure of success? 16:00 Facebook and shareholder resolutions 16:30 “63% of the non-Mark Zuckerberg shares voted in favour of the separation of chair and CEO. That said it all. But that board decided they didn’t care.” 18:10 “Using the stick of a shareholder resolution is not taken lightly and ... we are making sure that it is increasing awareness.” 20:30 Regulatory differences between traditional and internet media. 21:30 “I’m amazed that you can call yourself ‘news’, [but] that there is no rule that says you actually have to present some news”. 25:30 Fox News, voting machines and engagement in the absence of a regulator. 27:00 Pay inequality. We need the EEO-1 data, but it is not released by companies. It is material information and it should be disclosed 30:30 How have sustainability issues changed since you started? 32:00 “A shift has occurred [in attitudes towards sustainable investing] that has been fairly dramatic, particularly in the last couple of years, and in some strange way that was partially because of Trump. He was anti everything and suddenly people are waking up an saying: ‘What? No, that doesn’t make sense.’” 34:00 “Given that ESG has investing has demonstrated to reduce risk and increase alpha, you are violating your fiduciary duty if you are not incorporating [it].” 36:00 Sustainable Development Goals; are they helpful? 37:30 Rainbow washing. Do you see a lot of it? We have seen greenwashing and it has been bad. 41:00 “If your objective is to truly have a positive impact on the world, you are not going to accomplish that by simply investing in a portfolio of better companies, because you are buying in secondary markets, you are not really influencing capital flows. If you are really, truly trying to have a positive impact in the world, then you are going to be an active owner. You have to act like you care about what the companies are doing” 42:00 Compensation problems of C-suite in the US. 43:30 That is the problem: you can’t find a director who is going to tell you that their CEO is not in the top quartile.
42 minutes | 3 months ago
Interview with Professor Deep Kapur of Monash Centre of Financial Studies
Professor Deep Kapur is Director at the Monash Centre for Financial Studies in Melbourne, Australia. He is also a member of the investment committee of pension fund REST. Professor Kapur has had a varied career, spanning asset consulting, investment banking and academia. In this podcast, we speak about the lessons learned from the various crises since the 1980s, his experience running a machine learning-based FX strategy in the 90s and the current application of these techniques in pension funds. He also explains why Lehman Brother should never have been allowed to fail. Please enjoy the show! Overview of Podcast with Deep Kapur: 01:00 Starting out as a finance journalist in Bombay 04:00 Interviewing Ratan Tata. 05:30 Working across the Bombay Stock Exchange 07:30 Moving to Salomon Brothers 09:30 Every response to a [new] crisis is different 10:30 “When a systemically important bank goes down, then capitalism can’t function” 12:00 Letting Lehman Brothers fail was a complete mistake 14:00 In academia, the pendulum has swung too far away from the real world 15:00 Impact of pandemic on the university 17:42 Impact of the pandemic on markets 20:00 Last year has brought to the fore that risk management can not be a second class citizen. 20:30 You have been involved in machine learning for a long time. What is different today compared to when you started out in this field? 23:00 If machine learning deals with a lot of short term data, does a long term investor have any business applying these techniques? 25:00 “You might not want to run machine learning strategies, but you could use it as a research assistant”. 27:00 How to build safeguards around systems that recognise patterns that humans can’t see. 30:30 “You can’t back test the future” (good for preview) 30:50 “The use of AI to assist decision making will explode, [but] machine learning where the computer makes the decisions and implements everything… I don’t think it will take over the world.” 32:00 What areas does the Monash Centre for Financial Studies focus on? 33:30 Blockchain and its applications. 36:00 Why would an institution be interested in a crypto? You would have to buy the story. 37:40 I think [Bitcoin] is a good hedge against the risk of paper money debasement. 39:45 I’m overseeing the launch of a venture capital accelerator and our faculty and students would be available to provide assistance to these early stage companies.
35 minutes | 6 months ago
53: Sunsuper's Andrew Fisher – Asset Allocation, Pandemic and Retirement Products
Andrew Fisher is Head of Asset Allocation at Australian pension fund Sunsuper. We discussed the impact of how the markets have changed since the 2008 financial crisis on asset allocation and whether these changes are structural or part of a very long cycle. We also discuss the fund's partnership program, whether value is truly a risk premium and retirement products. Enjoy! Overview of podcast with Andrew Fisher 1:00 On ultra marathon running 2:00 Getting started in investing 4:50 Everybody is good at the pure maths side of things, where people differ is how they apply that knowledge 6:00 Markets are more driven by emotion today 7:30 Changing how we think about foreign currency 9:15 Talking distressed opportunities 10:00 NZ Super’s strategic tilting program 12:00 I’m not convinced that strategic asset allocation has stopped working 13:00 As the markets were falling, we definitely increased equity allocations 14:30 You shouldn’t base your defensive assets on the most recent crisis 18:00 Value versus growth: structural or cyclical 18:45 I have a healthy scepticism about whether there is a risk premium in Value 19:40 There is definitely a cyclical dislocation in certain sectors of the market 20:30 Technology is overvalued against almost every other sector. 24:00 On machine learning 25:30 Partnership program and strategic review 28:20 We are going to wait and see; we don’t really want to sell anything, but we also don’t really want to buy anything 30:30 Retirement, I’m not sure that anyone has been able to deliver anything better than the allocated pension
37 minutes | 6 months ago
52: Northern Trust AM's Michael Hunstad – Unintended Equity Risks
Michael Hunstad is Head of Quantitative Research for Northern Trust Asset Management. Michael and his team have produced a report which analyses risk in more than 200 portfolios and over a 1,000 equity strategies over a period of four years. They found that there are six drivers of unintended outcomes in portfolios, including uncompensated risk and unintended style biases. We speak with Michael about the report, how to avoid these traps and how the pandemic would affect the results. Enjoy! Overview of podcast with Michael Hunstad: 1:30 Starting out in investing 2:30 Changes in the hedge fund industry 4:00 Unrewarded risks in institutional portfolios are as high as 50pc of the portfolio 6:30 Unrewarded doesn’t mean unknown. To what degree do investors know about these risks? 8:20 Is it possible to get rid of unrewarded risk? 11:00 The Cancellation Effect, capacity and diversification. 13:00 Active share cancellation 16:30 It is not about how concentrated or diffuse a manager is, but what remains after the portfolio is put together 17:30 Unintended style biases. 18:30 We still have a high conviction in the value factor. We feel we are in a cycle and it is always darkest before dawn 20:45 I get concerned when I see the multiple dislocations that we see today 22:30 Chasing returns and manager selection 24:30 On return cycles of manager outperformance 27:00 Is manager blending an underestimated art? 28:45 Does this mean we should all just go passive and factors? 30:00 How would the pandemic affect the findings of the report? 30:40 When a risk is not properly priced, it is usually uncompensated 32:00 Pandemic and structural changes for the investment climate 33:00 We can see an increase in volatility spikes and it is accelerating 35:00 As a former algorithmic trader, I’m also concerned about the amount of algorithmic trading that is occurring at the moment 36:00 The future of equities is very much about how you manage these tail risk events.
37 minutes | 7 months ago
51: MMT's Bill Mitchell - Unemployment, Surpluses and Investments
Professor Bill Mitchell is one of the key figures behind the Modern Monetary Theory, a term he coined himself. We talk to Professor about the impact of the pandemic on economies, what can be done about the sky-high unemployment rates and why ultimately unemployment is a political choice. Overview of Podcast with Bill Mitchell, University of Newcastle 1:00 You coined the term ‘Modern Monetary Theory’? 3:00 Starting tto blog: http://bilbo.economicoutlook.net/blog/ 5:00 More interest from the investment industry 6:00 The Australian economy has collapsed 7:00 Most of the collapse could have been prevented 9:00 We are about $100 bn short of government spending 10:00 Not against the lockdowns 12:00 Much attention goes to MMT’s comments on deficits, but what it says about budget surpluses is much more interesting: it detracts from economic activity. 15:00 What is the role of fiscal policy? It is to ensure that spending in the economy is sufficient to maintain production at levels which will provide jobs for everybody. 16:30 To run a deficit is to undermine economic activity. That is okay in the case of Norway (where the economy runs hot). 17:00 A surplus not only undermines economic activity but it also destroys private sector wealth 22:30 Can we solve unemployment? A very pertinent problem at the moment. 23:30 Mass unemployment like we have today is a political choice 27:00 The Green New Deal or Green Transition. 28:00 If I was the government I would be embarking on large scale investments in renewables, transition technologies, in speeding up the process of carbon elimination. 28:30 Why not use the Hunter Valley culture of high productivity manufacturing to build a renewable energy hub for Australia and create jobs in manufacturing, R&D, et centera. 31:00 What do you want people to take away from MMT? 34:00 Does working from home distort the measuring of worked hours? 35:30 There is a massive distortion in economic data. This is not to blame the statistic agencies, but it is just very hard to measure right now.
31 minutes | 8 months ago
50: PRI's Nathan Fabian - Climate Risk Pricing
Nathan Fabian is Chief Responsible Investment Officer with the Principles for Responsible Investment (PRI). The PRI believes that financial markets today have not adequately priced-in the likely near-term policy response to climate change. In this podcast, we talk about the release of the Inevitable Policy Response, a project that aims to prepare investors for the associated portfolio risks. Overview of Nathan Fabian, PRI, podcast: 1:30 You were an advisor to Senator Penny Wong. What was that about? 2:00 What does a Chief Responsible Investment Officer do? 4:30 The PRI recently launched its Inevitable Policy Response. What is inevitable about it? 6:00 It can be hard, sitting in Australia, to see how political neutral climate is as an issue in most countries in the world. 9:00 Coal: “Institutional Investors broadly have already made a judgement on coal.” 11:00 Coal: “We are really just exiting a legacy industry at this point.” 13:00 Stranded assets: “A fire sale of assets is not going to be in the interest of institutional investors.” 14:30 How do you translate the uncertainties of climate risk into a valuation model? Is it possible? 16:00 Give your best estimate and adjust your valuation along the way. You can’t just ignore it. 17:00 We did some asset level modeling to get estimates. 18:45 Australia is still considered in the policy paper as a country that will phase out coal in an early stage. Why? 20:00 Is there a danger that the message will get lost in the turmoil of the pandemic? 20:30 “Will the support packages under the pandemic prolong the life of companies that were already struggling? That certainly is a risk” 22:30 “Are we accelerating the energy transition, or are we propping up companies that we are going to have to unwind anyway in the future? We are at important crossroads.” 24:30 “There is this myth around the green transition that you have to come up with unproven technologies that are going to radically transition our economies. But most of the opportunities are there and they exist in all sectors of the economy.” 26:00 “We think land use has been overlooked. But we expect a lot of change in this sector.” 27:30 So what are the next steps with the policy paper?
33 minutes | 9 months ago
49: Blackrock's Stephen Laipply – Fixed Income ETFs
In Episode 49 of the [i3] Podcast, we speak with Stephen Laipply, US Head of iShares Fixed Income ETFs for BlackRock. We discuss how fixed income exchange traded funds (ETFs) fared during March and April of this year, when many bond markets froze due the global pandemic. We talk about price discovery in listed and OTC markets and the question whether we will ever see an institutional grade portfolio comprising solely ETFs. 1:00 My father bought me my first stock when I was a child and it happened to be Apple, but... 3:00 First encounter with ETFs 5:30 The changing use of ETFs by institutional investors. 6:30 ETFs in Tactical Asset Allocation 8:00 Have fixed income ETFs remained liquid when credit markets froze? 8:44 We saw half of last year’s volume trade in a single quarter 9:30 How accurate do fixed income ETFs reflect the prices in the OTC market? 10:30 March 12 was one of the most challenging days in the risk off market. 11:00 If you compare 90,000 trades to a dozen of trades, then we have more confidence in the price discovery of those 90,000 13:00 You wrote a paper on fixed income ETFs as leading indicators? 15:00 Can you develop strategies based on the slight lag in information? 18:30 Sometime regulations can be a benefit to the sector. After the GFC, tighter regulations increased the demand for fixed income ETFs. 21:00 What type of institutional investors use these ETFs? 23:30 Relative trades with ETFs 26:00 Do fixed income ETFs trade like equities in the short term? 27:00 Just become an asset trades on an exchange, that doesn’t change the character of the asset class 29:00 What type of innovation do you expect to see in ETFs in the coming years? 31:00 Will we ever see an institutional-grade portfolio build completely out of ETFs?
26 minutes | 10 months ago
48: Research Affiliates' Rob Arnott - The Value Factor
Rob Arnott is the founder and Chairman of Research Affiliates. In January, he published a paper that looked into the question of why the value premium hasn't worked for the last decade, called 'Reports of Value's Death May Be Greatly Exaggerated'. In this interview, we talk about the paper, how the current downturn due to the coronavirus might impact factors and why Arnott would never take Research Affiliates public. Overview of Rob Arnott Podcast: 1:00 Is this time different? 2:00 Will things be different three years from now? 4:35 The idea that tech stocks won’t be hit is naive. 7:30 The narratives for why value fails, don’t work, with one exception 7:50 Book/value is a terrible measure of value 8:50 By capitalising intangible assets, you boost the value of companies and some might not look like growth companies anymore. 9:00 By taking into account intangible assets, value works better 10:00 Even Benjamin Graham, in 1937, wrote about the mediocrity of book-to-price 10:30 Today, over half of the assets of a typical business are intangibles that don’t show up in the book value 11:30 Are private equity investors arbitraging the value factor away? 12:00 I cannot imagine Research Affiliates going public. I would instantly resign! 15:30 You will never hear a momentum manager tell you the simple fact that momentum hasn’t worked since 1999 17:20 We wrote a paper for a journal on machine learning in which we went through a laundry list of things that could go wrong 18:00 What would you do in the current environment? 18:30 You want to buy at peak fear. 19:25 Value stocks as a segment will come back; they are trading at the cheapest level since the tech bubble 21:00 In Emerging markets you have a crisis every two years, so this is just another, nasty crisis. 22:30 Will the new announced fiscal stimulus and QE distort factors?
44 minutes | a year ago
47: PineBridge's Michael Kelly - Where to go active and where passive
Multi-manager firm Pinebridge Investments is a partner of Australian pension fund SunSuper and was given the task to write a research paper on how it decided to go active or passive in a particular market. Michael Kelly is Global Head of Multi-Asset at Pinebridge and takes us through the research paper. He also talks about his entry into the investment industry, including playing softball with Alan Greenspan. * Please note that this podcast was recorded before the coronavirus became a pandemic. Overview of Michael Kelly podcast 1:30 Alan Greenspan’s firm 3:25 Greenspan in his early days and his love for baseball 7:00 DAA or market timing? A medium term play. 8:00 We look at markets as if they are individual securities 9:00 Can you name some investments that worked out well and some that didn’t? 12:00 You asked me very politely to share some of my bloopers 14:00 Isn’t interesting that in 2020 we still have crisis orientated monetary policy 16:00 Sunsuper’s research task into when to you passive and active 18:00 When to go active and when passive 28:00 Don’t fund managers claim they can outperform all of the time? 29:00 You can look forward and see which markets become less efficient 31:00 Increased regulations have made it too expensive for small companies to list 32:00 Do portfolios need to include a bit of private assets to compensate for companies not listing as early? 34:00 Do ESG policies make passive less passive? 36:00 Is divestment really going to change practices at the majority of companies? 38:00 How do you engage with companies? 39:00 When passive investing is no longer a passive experience. 42:00 We are in a ‘Hotel California’ type of glut: you can check in, but never leave.
27 minutes | a year ago
46: TCorp's Stewart Brentnall - TCorp, partnerships and the Canadian Model
Stewart Brentnall is the Chief Investment Officer of Tcorp, the asset management arm of state of NSW. In this interview we discuss the fund's move towards a total portfolio approach, how TCorp views partnerships with fund managers and his thoughts on the Canadian Model. Overview of podcast with Stewart Brentnall: 2:00 Getting started in investing. 2:40 My first boss, while I was on secondment to Clayton Utz, was Julie Bishop 5:30 Building a multi-manager platform at ANZ 6:00 TCorp mergers 6:45 Internalisation of asset management functions 7:30 Moving towards a total portfolio approach 8:30 Asset classes don’t describe very well how much risk they bring to a portfolio 11:00 Streamlining the portfolio and reducing the number of managers in it 12:00 Equities are at the centre of the investment process and every other asset is measured against the risk/return profile of equities 13:00 How were the changes received by the existing staff? Did you get any pushback? 15:00 Addressing agency risk 15:30 How do you look at strategic partnerships? 17:30 Thoughts on passive versus active as TCorp continues to grow. 19:00 Teaming up with Canadian pension funds 20:00 What are your thoughts on the Canadian Model? Will it still be successful in an environment where returns are lower and so cost will need to be managed more? 22:00 The governance around internalising is tricky 23:00 How is TCorp positioned in this crisis environment? 27:00 Role of technology
39 minutes | a year ago
45: JP Morgan's Bob Michele - Yield inversion, Gold and Cryptocurrencies
Bob Michele is Chief Investment Officer and Head of the Global Fixed Income, Currency & Commodities Group at JP Morgan. At the end of every year, Bob writes a tongue-in-cheek blog post, handing out awards to various fixed income asset classes and events. We discuss yield inversion, gold, cryptocurrencies, MMT and more. * Please note that this recording was made before the coronavirus became a pandemic. Overview of Bob Michele Podcast: 1:30 How did you get into fixed income investing? 2:30 Annual bond awards blog post; heroes and villains 3:30 Last year’s yield curve inversion; what does it mean? 6:00 Should we tier the official deposit rate to combat inversion? 8:30 How creative do you want your central banker to be? 10:00 Inflation, disinflation, how concerned should we be? 13:30 Emerging market bonds, China bonds and fixed income indices 16:30 Will China bonds remain niche in the foreseeable future? 22:30 Covenant light bonds; are lending standards dropping? 27:30 You named gold the currency of the year. Isn’t gold just speculation? 30:00 “No yield is a pick up from negative yields” 32:30 Talking cryptocurrencies 35:00 View on MMT
50 minutes | a year ago
44: Intech's Adrian Banner - The Stochastic Portfolio Theory and Klezmer music
Adrian Banner is Chief Executive Officer and Chief Investment Officer at Intech Investment Management, a Janus Henderson business. Adrian is also a former maths lecturer at Princeton University, author of the book “The Calculus Lifesaver and last but not least a recorded musician, playing piano. In this podcast, we talk about the importance of rebalancing, which might explain a large part of the size premium, and look at volatility – two topics that lie at the heart of the Stochastic Portfolio Theory. We also find out what Klezmer music is. Enjoy! Overview of Adrian Banner podcast: 3:00 Studying Klezmer Music 5:00 Why both CEO and CIO? 7:00 Stochastic Portfolio Theory and Robert Fernholz 9:48 Does is solve all the problems of Modern Portfolio Theory? 12:42 The Curse of Compounding 14:30 Rebalancing and the size premium. 17:30 Small caps don’t outperform large caps. It is the rebalancing to maintain a small cap portfolio that makes sense. 20:00 High or low volatility? 22:30 How will factor strategies hold up when we move away from an environment dominated by quantitative easing? 27:00 The reason why some research finds that randomly chosen portfolios do better than the market index is because they have more small caps in them. But do they have better Sharpe ratios? 29:00 Should we time factors? 31:30 Picking the top and bottoms of markets is very hard to do, but risk timing is probably more achievable 34:00 Bridging the gap between academia and practitioners. Any views as a former lecturer? 35:00 We have every month graduates in mathematical finance from Princeton come to our office, but not so many economics or business school participants 36:00 I reject all models that say: ‘The market is wrong and the model is right’. The market is always right. 37:30 Why is it that the top 5 per cent of the S&P 500 represents about 50 per cent of capital. It has pretty stable over multiple decades…, and it is things like this that drive the size premia. 40:30 Machine learning is a nice research tool, but not as useful as part of an investment process. 44:00 Machine learning and fiduciary duty, do they mix? 47:30 As a scientist, I find it hard to say: ‘This is behavioural’. What does that really mean?
49 minutes | a year ago
43: IEEFA's Tim Buckley - Climate Risk, Stranded Assets and the Energy Transition
Note: This podcast was recorded before Blackrock announced to divest from thermal coal in its active strategies. Climate change has been a divisive issue in the investment world, as many investors struggle to articulate the impact of this development on their portfolios. But Tim Buckley brings clarity to this discussion with a sharp analytical framework of how climate change and the ongoing transition to a low carbon economy will impact corporations and, ultimately, institutional investors. After all, you don't want to be left holding the 'canals of the 21st century' in your portfolio. Tim is a Director of Energy Finance Studies, Australasia at IEEFA, the Institute for Energy Economics and Financial Analysis. He spent most of his career in the asset management industry, including 16 years at Citigroup, where he was Head of Equity Research. Overview of Tim Buckley podcast: 1:00 You were involved in equity research. How did you get into the climate change sector? 1:35 Chinese companies were involved in clean technologies that we were conceiving off in the West 4:30 Focusing on the energy sector 7:00 What was an example of an interesting Chinese energy technology disruptor when you were investing? 9:00 Next Era Energy CEO predicts renewable deflation of 50 per cent in the next 5 - 10 years 9:30 Clean energy in Japan after Fukushima 13:00 Nuclear energy is low emission, but is it really sustainable? 14:30 What are the major risk from climate change for investors? Let’s take a look at what Mark Carney, Bank of England, estimates. 16:00 The train wreck is coming, but the sooner the better because financial markets will adapt 17:00 Do you look at climate change risks as unaccounted-for costs? 19:00 Stranded assets and why they matter. 21:00 Coal will have a market share of zero per cent by 2030 23:00 Are funds already holding stranded assets? Oh yes! 25:00 Let’s just put a price on carbon and let investors make an informed decision. 26:00 Infrastructure investors will be a core part of the solution 28:00 Talking about divestments: how far can you go before running into fiduciary issues? 30:00 You have a fiduciary duty to factor in a known risk. 36:00 Some of the developing economies are further ahead on transitioning to low carbon than the developed world. 39:00 The disruptive technologies are truly disruptive; it is not just positive. It will destroy more shareholder value than it creates. It is a risk that needs to be addressed. 42:00 Who will be the winners of this disruption? 45:30 Tail risks, an example of General Electric
30 minutes | a year ago
42: TCorp's Greg Cooper - Problems of Public Markets, Active management and Venture Capital
Greg Cooper was for many years the Chief Executive Officer for Schroder Investment Management in Australia. More recently, he joined TCorp, the AU$ 93 billion government asset manager for the state of NSW, as chair of the investment committee and non-executive director. We speak with Greg about whether public markets are broken, the state of active management and his interest in the venture capital space. Greg Cooper podcast overview: 1:00 Starting out in actuarial studies 3:00 Focussing on Japanese equities 4:00 Compared to 1986, Japanese equities are still at the same level 5:00 What were some of the highlights of your career at Schroders? 6:50 We’ve moved on from strategic asset allocation 7:55 As a CEO, don’t be afraid of what others think and try to draw out ideas 9:35 Are public markets broken? 11:00 Not having a well-developed VC industry means that a lot of good ideas get starved of capital and eventually go offshore 11:30 Will that change when the effect of QE goes away? 15:00 No investor is entirely passive. 16:30 Passive rose, because active had too large a share, but you can’t have a 100 per cent passive investment market 17:30 Will value-style investing come back? 21:30 You have an interest in fintech and hold a board position at OpenInvest? 25:00 Joining the TCorp board and chairing the investment committee
38 minutes | a year ago
41: VMLH's Vijoy Chattergy - Crisis Risk Offset, Complexity and Governance
Vijoy Chattergy is the founder and president of VMLH, a consulting firm for global institutional investors. Previously, Vijoy was Chief Investment Officer of the US$17.5 billion State of Hawai‘i Employees Retirement System. He is well known for implementing an investment philosophy that focuses on functional risk classes instead of asset classes, which led him to create a Crisis Risk Offset sleeve to the portfolio. This podcast was recorded at the [i3] Asset Allocation Forum 2019 in Bowral, Australia. We spoke about the function of complexity in portfolios and how to set effective governance frameworks around this. Overview of Vijoy Chattergy podcast: 2:30 How did you get started in the investment industry? 5:00 What are some of the differences and similarities between Australian and US pension funds, you find? 10:45 As CIO you want to make key decisions, not all the decisions. 14:00 Does the size of the organisation come into play when designing a governance policy? 16:45 Governance is different from culture building 18:10 Does governance add to returns? 21:00 Where does the member come into the governance process? 22:00 Can we address the issue of peer risk through governance? 24:44 Should complexity be embraced and how would you communicate it? 27:45 Complexity should have a function in the portfolio. 29:30 Using functional risk classes 32:00 Should board directors be experts in asset management? 35:00 Implementing a crisis risk offset class
48 minutes | 2 years ago
40: Frontier Advisor's Fiona Trafford-Walker - Manager Selection and Value Investing
Fiona Trafford-Walker is one of the world’s most respected asset consultants. Trafford-Walker is a founding member of Frontier Advisors and has advised many of Australia’s largest pension funds on their investment strategy. Currently, she is a Director and member of the Investment Committee at Frontier, but has announced to leave the company on 6 December 2019 to focus on her directorships. She is a Non-Executive Director at the Link Group, Prospa Group and the Victorian Funds Management Corporation and a member of the Investment Committee at the Walter and Eliza Hall Institute. Trafford-Walker was named as one of the Top 10 global asset consultants by CIO Magazine from 2013 to 2016 inclusive. She was also announced as a winner in The AFR and Westpac 100 Women of Influence Awards for 2016 in the Board/management category. In this podcast, we look back on her 25 years with Frontier, her career as an asset consultant and discuss a variety of topics, including manager selection, asset allocation and the changing landscape pension funds face today. Overview Fiona Trafford-Walker podcast: 2:30 I’m an accidental asset consultant 4:30 You’re named as one of the most influential asset consultants in the industry. What makes a good asset consultant? 5:35 You have to be willing to collaborate 7:00 Technical skills are very important, but equally important is time in the markets 7:30 The changing role of asset consultants over the years 9:30 As asset consultants have increased their senior staff, have conversations become more focused on strategy? 10:30 There is still the need to have a blend of specialist and generalist skills 11:50 Are we already heading to having a panel of asset consultants? 13:00 Is there a good balance between the time spend on manager research and that on asset allocation? 14:30 What type of data should inform changes in asset allocation? 16:00 There is not much you can do about geopolitical risk; predicting what politicians are going to do next is pretty hard. 16:30 But trade wars are a real thing that have an effect on markets 18:00 Are the struggles of active managers, particularly value managers, structural or cyclical? 19:00 There seems to be a need to tweak the value process to allow for the new capital-light business models. But at what stage do you get style drift? 21:30 Frontier Advisors took the decision to build a platform with all their research on it, quite a brave step in an era where softcopies get distributed easily. 26:00 You spent some time arguing for lower fees in the industry. Are we at the right level? 27:30 The real change has been the internalisation of asset management by some funds. 29:00 Can internalisation refocus asset management on the long term? 30:00 Bottom draw mandates 31:00 To what extent should asset owners engage with the companies they invest in? You are on a number of boards and see both sides? 33:00 Governance certainly has changed as asset owners realise they are the beneficial owners 35:00 To what degree can you divest from companies as a fiduciary? 38:00 The challenge of developing retirement products 41:00 At the moment, the willingness to do things together [as funds] isn’t there. 42:00 What is next in store for you? 44:00 What issues come up in mentoring new asset consultants?
92 minutes | 2 years ago
39: Ned Davis Research - Rules of Research and the Inevitable Mistakes
MarketFox columnist Daniel Grioli speaks with Tim Hayes, Chief Global Investment Strategist, Joe Kalish, Chief Global Macro Strategist and Ed Clissold, Chief US Strategist of Ned Davis Research about multi-asset portfolios, asset allocation, the rules of research and the inevitability of making mistakes. Ned Davis Research is one of the largest independent institutional investment research providers in the US market. It combines both fundamental and technical research disciplines, and adheres to the adage: 'making money is more important than being right'. Overview Ned Davis Research 2:00 What are some of the lessons you’ve learned the hard way? 3:30 Joe: Ned always said: ‘Everyone makes mistakes. But the difference between the winners and the losers is that the winners make small mistakes’. 9:30 Ned’s nine rules for interpreting markets 15:00 The importance of being open to new techniques and datasets. 17:00 Joe adds on a 10th rule 20:50 A lot of people said they called the housing market in 2007, but I’m actually quite proud that we called when it was time to get back in 2009. 27:00 Pay attention to correlations. Sometimes things are changing. 28:30 How do you use base rates? 30:00 Sometimes we are known as myth busters, because we blow up some common [held believes]. One of them is about the yield-curve inversion. 34:00 Really good earnings growth is usually priced in when it gets announced and so is not good for price levels. 36:40 We looked at 25 different value indicators to see which ones have done better over the years 41:00 This has probably been the biggest divergence in the last 10 years of what happens in the US and what happens in the global markets. 45:30 Ed: If you look at the US right now, it actually doesn’t look that bad. 45:49 Joe: I start with a top down view 47:37 You can’t just look at change anymore, you have to look at the second derivative: the change of change 51:20 This is not the most exciting time in the bond market 52:00 What is the difference between trend and market timing? 54:45 You need to pay attention to the trend 58:00 The value of asset allocation 1:06:00 Make sure you’ve got that disciplined process in place to make trend decisions 1:08:00 We only forecast for fun, but we pay attention to the indicators 1:12:00 What is a mistake? It can be different things to different people 1:15:00 Has your analysis been impacted by current market conditions of central bank policy and algorithmic trading? 1:22:00 What are you working on at the moment? 1:28:00 Tips to make better investment decisions
78 minutes | 2 years ago
37: Acquirer Funds' Tobias Carlisle - Quantitative Value, Deep Value and Concentration
Tobias Carlisle is a deep value investor and founder of Acquirers Funds. He is author of the best-selling books 'The Acquirer’s Multiple', 'Deep Value', 'Concentrated Investing' and 'Quantitative Value'. Tobias has extensive experience in activist investment, company valuation, public company corporate governance, and mergers and acquisitions law. He has also worked as an analyst at an activist hedge fund, general counsel of a company listed on the Australian Stock Exchange, and a corporate advisory lawyer. More recently, Tobias launched a deep value ETF, The Acquirers Fund (ticker: ZIG), which holds long positions in deeply undervalued, fundamentally strong targets for activists and buyout firms, and short positions in overvalued, financially weak companies. It started trading on the NYSE Arca in May this year. Overview of Tobias Carlisle podcast 3:00 I was working as a lawyer in M&A when the tech crash happened 8:00 There is this phenomenon in deep value where the worse the quality, the better the performance tend to be. 12:00 Developing a quantitative value metric without the quality metric gives you better raw performance. 13:00 Daniel: if you test Joel Greenblatt’s magic formula on Australian stocks it pushes you into all these mining companies. 16:00 The spread between the most undervalued and overvalued stocks are at historic widths. 19:00 There are secular issues with price to book measures. 20:00 Factors give this nice impression that it is scientific and filters out human emotion, but the rules change all the time. 30:00 It is hard to short a cult 32:00 Shorting on valuation is not the way to short; you want financial distress 33:00 Keep shorting positions small 36:00 Why launch the fund as an ETF and not as a mutual fund? 40:00 Do you have sector constraints? 43:00 Shannon's Demon 45:00 The Kelly Criterion 53:00 Criticism of using EBITDA metrics 57:00 There is a machine learning component to the analysis 1:00:00 Most investors are better off to hold a low cost index fund, but I believe that over the long term a value strategy will outperform the market 1:01:00 There is a paper that says value investors win at the expense of other value investors. 1:04:00 Blending managers is a difficult puzzle to solve. 1:09:00 The rise of the fourth Buffett 1:10:30 Which lessons have you learned the hard way? …. All of them 1:13:00 We are all cognitively impaired.
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