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agenda >> pension bridge annual 2017
The Pension Bridge Annual 2017
THE PENSION BRIDGE Annual, San Francisco
The Four Seasons Hotel
Tuesday April 18th, 2017
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Keynote Speaker - Best Practices in Pension Fund Management: The Canadian Model
The industry is dealing with a low return environment along with rising longevity and unfavorable demographics. With many asset classes fully priced in this low growth environment, investors have entered into a world of complacency. Adaptation and structural transformation are required for pension fiscal sustainability and the long-term fund management process.
- Statistical Success of the Canadian Model with Assets Managed Internally
- Key Components – Keep Fees to a Minimum, Hunt for Cash Flow, Innovative Private and Co-Investment Deals, Reluctance to Overpay
- Budget and Resources as a Concern – Salary Structure, Investing in Talent Pool
- Which Program or Asset Class might be Best to Start with for the Transition to In-House Investment Management? Which Allocations are Best Served by an Outsourced Specialist Fund Manager?
- Understanding the Necessary Industry Changes Required for Fiscal Sustainability, regardless of model – Compensation Linked to Performance, Transparency and a Long-Term Strategic Vision
Jim Keohane, CFA, President & Chief Executive Officer, Healthcare of Ontario Pension Plan, (HOOPP)
Macroeconomic View - State of the Markets
- Current Macro Environment
- Recent Public Equity and Fixed Income Returns
- Bull Market Length and Returns
- High Valuations
- Reasons for Remaining in a Long-Term Low Return Environment
- Global Working Age Population and Challenging Demographics
- China Credit Explosion as a Concern
- Taking Risk More Efficiently
- Asset Class Risk and Returns – Areas of Caution?
- Investment Ideas on how to Increase Returns
- How to Better Protect Capital in a Down Market
William J. Coaker Jr., CFA, MBA, Chief Investment Officer, San Francisco Employees’ Retirement System
Executive Director/CEO Roundtable
(A) Pension Health/Governance
- How are Demographics Affecting Retirement Systems?
- How do you approach Increases in Longevity and Costs for Healthcare Drugs for Retirees? Any possible Solutions?
- What does the Future hold for Raising the Retirement Age, Reducing Benefits and Increasing Employee Contributions?
- What can a Fund do to adequately Protect for Liquidity and Cash Flow Requirements?
- Does your Funded Status alter your Long Term Decisions with regards to Liquid or Illiquid Investments?
- Best Governance Practices to Keep Plans Optimally Invested, Managed, Funded and in Regulatory Compliance
- Do you believe Plans in general will be able to Meet or Beat the Assumed Rate of Return over the next 10 Years?
- Should we be Spending Political Capital to Lower Assumed Rate of Return Targets?
- Dealing with Legislature – what is your Biggest Concern? Is Trust a Factor?
- Do you see the Benefits of Adopting a Hybrid DB/DC Plan? What are the Drawbacks?
- Explain the Argument as to why States should not offer a 401(k) DC Plan as a Solution
- Truth or Myth: Defined Benefit Plans are Expensive and Defined Contribution Plans are Cheap
- Thoughts on Outsourcing the CIO Function?
- How do you ensure your Board Members receive Continual Education of their Fiduciary Roles/Duties and keep them Updated on Risk Factors?
- Have you Educated Internally on the Risks or Steps for Cybersecurity Protection? Do you have Cybersecurity Questions or Guidelines in your Due Diligence of your Managers?
- What is your Biggest Threat to your DB Plan? What keeps you up at night?
(B) Long-Term Structural Changes for Fiscal Sustainability
- Do you see a Shift towards the Canadian Model with more Assets being Managed Internally to Lower Investment Costs? If so, which Mandates should be Outsourced to External Managers?
- Have we made Strides to Solve the Talent and Compensation Struggle? Will we see more Compensation-Based Pay to Attract and Retain Talent to be Competitive with the Private Sector?
- To Cut Costs, will we see a Continued Shift towards Investing in Passive, Low-Cost Vehicles, Index Funds and ETFs over Actively Managed Funds? Is Passive here to stay?
- Will we see a Shift to Hunt for Long-Term Cash Flow Investments through Partnerships and Co-Investment Structures? Greater Competition to Follow?
- Requirement for Better Transparency
- Do you believe we’ll see a Consolidation of Public Pension Plans Under One Entity, (such as INPRS or IMCO in Canada)? What are the Benefits?
- Making Governance more Effective – Identifying Key Board Member Roles with Expertise in Particular Areas with an Independent Board
Andrew Junkin, CFA, CAIA, President, Wilshire Consulting
Steve Yoakum, Executive Director, Public School & Education Employee Retirement Systems of Missouri, (PSRS/PEERS)
David B. Wescoe, Chief Executive Officer, San Diego County Employees Retirement Association, (SDCERA)
Brian Guthrie, Executive Director, Teacher Retirement System of Texas
Ruth Ryerson, Executive Director, Wyoming Retirement System
Risk Management and Adopting a Risk Culture
(A) Key Considerations for Managing Risks
- Overview of the Shift from an Asset Allocation-Centered Process to a more Comprehensive Risk
Allocation-Based Process. Explain the Transformation to Risk Allocation Decisions
- What’s the Biggest Challenge that has Prevented Wide-Spread Adoption of a Risk Allocation Framework? What are the Characteristics a Plan would need in order to Implement this type of Approach? What’s the most Important Change to make?
- What are the Key Challenges as it relates to Measuring Risk?
- How can considering Diversification and Risk Independently help Investors Build more Efficient Portfolios?
- What Developments have we seen for Combining Several Risk Premiums as a part of Portfolio
- How has taking a Risk Allocation Approach changed the Structure of your Plan’s Fixed Income Investments? Understanding Return Seeking Fixed Income and Traditional Risk Reducing Fixed Income
- What Irregularities have we seen in Portfolios as Asset Classes are Redrawn and Renamed via Risk Allocation? Are we still too heavy with the Equities Allocation?
(B) Top Pension Risks we should be Most Wary of
- Understanding Asset Class Correlation and Behavior Risk – Tendency of Interest Rate and Inflation Shocks Driving Both Equities and Bonds in the Same Direction, (Correlations Change)
- Drawdown Risk
- Transparency and Liquidity Risk – Basing it on a Cost/Benefit Evaluation
- What’s the best Approach to Liquidity Risk as it applies to Meeting Future Cash Flow Obligations?
- Leverage Risk – what are the Best Approaches to keep these Risks within Acceptable Parameters?
- Monitoring Counterparty Risk being taken by Managers – any New Measures?
- Equity, Credit, Duration, Inflation/Deflation, Currency, Geopolitical Risk Considerations
- How does Stress Testing or Scenario Analysis factor into your Process?
- How do you Communicate your Risk Tolerances with your Board, Managers and Media?
- How has the Role of Fiduciary Responsibility Changed in this new Era of Risk?
- What should Boards/Organizations Consider when Building a Risk Culture?
- How can Fiduciaries Adapt and Safeguard against today’s Challenges?
- Have you Developed a Process for Monitoring Risk being taken by your Money Managers?
- How do you go about Educating a Board on Risk?
- What Metrics Aid in the Decision Making Process?
- How does a Plan’s Size affect the Approach to Pension Risk Management?
Stephen Cummings, CFA, Global Investments Officer, Head of North America Investment Consulting, Aon Hewitt Investment Consulting
Eugene L. Podkaminer, CFA, Senior Vice President, Capital Markets Research, Callan Associates, Inc.
Freeman Wood, Partner, North American Head, Mercer
Timothy Corbett, Senior Managing Director, Global Head of Investment and Liquidity Risk, State Street Global Advisors
Bruce H. Cundick, CFA, CPA, Chief Investment Officer, Utah Retirement Systems
Keynote Speaker - Multi-Asset Strategies
(A) Construction and Skills
- Why is Multi-Asset Investing Attractive to Investors?
- What are the Common Sub-Asset Classes Included in Multi-Asset Strategies?
- Do these Strategies Reduce Correlation, Lower Volatility and Limit Downside Risk or Drawdown? If so, by How Much?
- How do Investors utilize Multi-Asset Strategies in their Portfolios?
- With Dynamic and Tactical Asset Allocation Skills yet to be Put to the Test in recent years, how do you see this Space Evolving in a more Treacherous/Volatile Market?
- Aside from Asset Allocation Skills, what other Skills are Required for the Ability to Generate Alpha and be Successful?
- Constructing the Portfolio – Risk Factor Approach
- How do you Measure Performance?
- Trailing Returns – Underperformance of Multi-Asset Strategies to the Traditional 60/40 Mix. Is it possible Central Bank Policy has Limited the Ability of Multi-Asset Managers?
- Do these Strategies Rely Too Heavily on Market Timing?
- Do you Agree or Disagree with the Willis Towers Watson Report saying Multi-Asset Managers have actually Harmed Performance via Tactical Asset Allocation Decisions?
- The Skill of Moving Opportunistically Between Markets, a Function of Asset Allocation Alpha is an All-to-Rare Commodity – any Truth to this?
- Do you believe that many Multi-Asset Funds have Not Sufficiently Incorporated Risk Controls into the Design of their Products as the Willis Towers Watson Report Noted?
- Reliance on Stable Correlation Relationships although there is No Certainty those Relationships will Persist
- Is Excessive Leverage a Concern?
- High Fees
- Is Transparency often Obscure or Hazy?
Myron Scholes, Ph.D., Nobel Laureate, Chief Investment Strategist, Janus Capital Group
Tail Risk Hedging
- Understanding Tail Risk Frequency, Severity and Impact – why are the Markets Vulnerable to a Substantial Decline Today?
- Understanding the Risk of Correlated Global Markets for Developed Countries
- Why is this a Good Time to Mitigate Equity Tail Risk?
- If Tail Risk Hedging is a Good Idea, why isn’t Everyone Doing It?
- What are the Expected Costs of a Tail Risk Hedge vs. the Expected Benefits?
- Is Raising Cash a Proper Tail-Risk Strategy?
- Limits of Diversification and Beta Hedging
- Importance of Understanding where in the Market your Existential Tail Risks come from and how Big they Could Be – Analysis of your Liquidity and Leverage. What Liquidity Considerations should Investors pay attention to?
- Implicit vs Explicit Hedging – what are the Advantages and Disadvantages of each?
- What Types of Strategies and Approaches are used to Hedge?
- Using Information from the Derivatives Markets to assess Stress Points – where we are seeing Tail Risks building?
- Option Overlay Strategy – Cash Flow Generation in Down Markets but can you Maintain Upside
- Exposure in Rising Markets?
- Does the Growth in the VIX Universe pose a Risk?
- Active Management
- Pension Plans developing a Contingency Plan – What are the Best Practices to Navigate through Stressful Periods?
- Why is there often Difficulty Implementing a Tail Risk Program within the context of a Committee and how can we overcome this? Any other Implementation Challenges?
- Any Real World Experiences you can share among your Clients with Tail Risk Hedging?
Tim Barron, CAIA, Senior Vice President and Chief Investment Officer, Segal Marco Advisors
Kevin McLaughlin, CFA, Head of Liability Risk Management, North America, Insight Investment
Gregory Johnsen, CFA, Director - Institutional Portfolio Manager, Parametric Portfolio Associates
Liability Driven Investment, (LDI)
- What is LDI and how is it Interpreted in the Market?
- What have Plans done to address the Hurdles of Low Pension Funded Status and Low Interest Rates over the past few years?
- Does LDI Make Sense Now Considering Current and Future Market Conditions? What is the Risk/Return?
- Reducing Funding Ratio Volatility
- Are Plan Liabilities the only appropriate Benchmark?
- Understanding the Components of Performance Measurement and Evaluation – Risk Budgeting, Scenario Analysis, Liquidity Analysis and Performance Reporting
- What are some Industry Trends that Clients should be should be aware of in the LDI Market?
- Beyond the Ability to Earn Excess Returns, what should Investors look for in Selecting LDI Managers?
- Understanding Implementation Approaches, Strategies and Issues. Are some Approaches More Appropriate in a Less Liquid Fixed Income World?
- Understanding that a Partial LDI Strategy only Partially Reduces the Pension Risk
- How to Implement LDI in a Pubic Fund Context – are the LDI Methods Applicable?
- Pension Risk Transfer – Lump Sum Payments, Buy-Outs, Buy-Ins. What Trends are we seeing?
- Will we see a Strategy More Common in Europe with Plan Sponsors Combining an LDI Strategy with the Purchase of Longevity Insurance to Further Reduce Risk?
Timothy F. McCusker, FSA, CFA, CAIA, Chief Investment Officer, Partner, NEPC, LLC
Brian McDonnell, Managing Director, Head of Global Pension Practice, Cambridge Associates
David R. Wilson, CFA, Managing Director, Head of Institutional Solutions Group, Nuveen Asset Management
Kevin Zhu, Managing Director, Head of Portfolio Construction, OPTrust, OPSEU Pension Trust
- Risk Parity Explained
- Does Risk Parity Make Sense Now Considering Current and Future Market Conditions?
- Performance in the Past Decade and Longer – How does Risk Parity look over time Compared to Other Asset Mix Models?
- Scenario Analysis for Risk Parity Performance – (a) Gradual Rise in Interest Rates, (b) Sharp Decline in Equity Markets, (c) Global Commodity Deflation Continues, (d) Sharply Rising Inflation
- Is it possible that Bonds will become Less Likely to Protect against Volatility in Equities?
- Should we be Worried about Leverage or Leveraging the Inappropriate Assets? Is there an Over-Reliance on Bonds with Current Valuations?
- Do you Consider it a Drawback that there’s Only a Positive Weight to an Asset with No Ability to go Short?
- Leverage and Illiquidity Do Not Mix – any Approaches to Avoid this Combination?
- Do you View it as a Flaw that Portfolio Construction Approaches only consider Volatility Risk, Not Tail Risk or Drawdown Risk?
- Can Tail Risk Parity be the newest Trend? Thoughts on the Concept of Measuring Expected Tail Loss rather than Volatility – Cheaper Hedges for Protection, Reducing Tail Risks while Retaining More Upside than Risk Parity?
- Aside from the Money Concentrated in the Top “Founding Firms,” how should we Approach Managers with Short Track Records?
John Linder, CFA, CPA, Consultant, Principal, Pension Consulting Alliance, LLC, (PCA)
Jeffrey Knight, CFA, Head of Global Investment Solutions, Co-Head of Global Asset Allocation, Columbia Threadneedle Investments
Roberto M. Croce, Ph.D., Senior Portfolio Manager and Head of Quantitative Research, Salient Partners, L.P.
Steven J. Foresti, Chief Investment Officer, Wilshire Consulting
Unconstrained Fixed Income Strategies
- Assessing the Current Environment – Fed and Global Central Bank Policy, Interest Rates, Spreads, U.S. Dollar, Foreign Investment in U.S. Treasuries, Global Fixed Income Landscape and Default Rate Expectations
- What are your Best Ideas for ways to Simplify the Sub-Allocations within the Fixed Income Space? Any preferred Allocation Breakdowns or Weightings?
- With the Proliferation of Products which are Diverse, what is the Return Objective?
- Portfolio Construction – Need for Increased Disaggregation of Alpha Sources
- Understanding Return Sources/Attribution and Correlation that Unconstrained Funds have had with other Fixed Income Sectors and Equity Markets
- Impact of the Non-Linearity of Risk Correlations and Volatility Not Being Stable through time. Is that something you look to Measure in case of Market Dislocations?
- How are you Taking Advantage of Current Market Dislocations?
- What are the Implications of Reduced Liquidity?
- From a Risk Factor Approach, what Asset Class replaces Duration as a Deflation Hedge in a Portfolio?
- Modern Risk Management – what Progress have we seen for Developing a Risk Premium Approach?
- Do you see a Supply/Demand Imbalance in Long-Duration Fixed Income?
- Using Structured Products, Swaps and Derivatives to Create Alpha and Hedge Volatility
- Opportunities in Global and Emerging Market Debt – why is it appealing?
- Emerging Markets Local Fixed Income – what are the Currency Risk Factors?
- What are your Expectations and Outlook for Corporate Debt?
- Bank Loans – Attractive or Not a Good Hedge in Rising Rate Environment?
- Are Taxable Municipals a good Alternative to Corporate Bonds?
- Landscape for MBS Market with GSE Reform Considerations
- Risk/Reward for TIPS, Interest Rate and Inflation Swaps, Inflation Bonds and Overlays
- Where do you see the Greatest Risks in the Debt Markets and what might be the Trigger Points that enhance that potential?
- Understanding how to Select Alternative Managers – Multi-Sector, Multi-Region and Multi-Currency Skill Set
Keith M. Berlin, Director of Global Fixed Income and Credit, Fund Evaluation Group
Michael Swell, Managing Director, Co-Head of Global Portfolio Management, Global Fixed Income, Goldman Sachs Asset Management
Daniel S. Janis, III, Head of Global Multi-Sector Fixed Income, Manulife Asset Management
Leighton A. Shantz, CFA, Director of Fixed Income, Employees Retirement System of Texas
Brian Timberlake, CFA, Ph.D., Head of Fixed Income Research, Voya Investment Management
Smart Beta – Proceed with Caution
Smart Beta maven Rob Arnott, one of the founders of this strategy, has voiced concern about a “reasonable probability of a smart-beta crash” and that many smart beta strategies are poised to go “horribly wrong.” Bill Sharpe, Nobel Laureate and the “inventor” of beta, stated that “smart beta makes me sick.” Rick Ferri, an index-investing pioneer, has referred to smart beta as “silly talk.” We’ll examine why the growing popularity of smart beta can result in possible unexpected returns.
- Smart Beta Flashy Name Misconception
- Misleading Marketing
- Limits of Diversification – Smart Beta often Promoted as a Good Diversifier but has exhibited a High Correlation with the S&P 500
- Lower Volatility Aspect – does it Reduce Risk if it still shows a High Correlation to S&P?
- The Likelihood of Selecting the Wrong Smart Beta Variation
- Excess Returns mean Extra Risk
- Factor Exposures often Create Undesirable Tilts
- Extended Periods of Underperformance with Hypothetical Back-Testing Prior to the Launch of Smart Beta
- High Fees
- Are High Valuation Levels Reducing the Potential for Future Performance?
- Should Liquidity be a Consideration with Some Products?
- What is your Best Advice when Allocating to Smart Beta?
John R. Chisholm, CFA, Executive Vice President, Chief Investment Officer, Acadian Asset Management LLC
Environmental, Social and Governance, (ESG)
- What are the Recent Market Developments in ESG for the U.S. and Abroad?
- How do you Approach ESG from a Fiduciary Standpoint and for the Development of your Plan’s Investment Beliefs?
- How should ESG be best Incorporated into the Investment and Due Diligence Process?
- Climate Change and Investment – what’s the Relationship and how do you Integrate Climate Risks into your Process? What are the Alternatives to Divestment?
- What should Pension Funds be asking their Existing Active Managers in terms of whether they are looking at Climate Risk or Opportunity?
- What are the Perceived Obstacles to applying an ESG Framework to the Stock Selection Process?
- Considerations for Investing in a Passive ESG Index – thoughts on Low Carbon Index? Combining ESG with Smart Beta?
- Understanding UNPRI Principals. Will there come a time when Plan Sponsors Only Invest with UNPRI Investment Manager Signatory Firms?
- Do we have Proof that ESG Integration Adds Value?
- ESG Fund Performance vs. Traditional Funds
- What Progress have we seen with Portfolio Decarbonization?
- Will Supply Chain Management be the new Normal? – Looking past the Portfolio Company with a View on its Relationship with Large Enterprise Customers
- What are some ESG Misconceptions?
- Factors Needed to make ESG Mainstream and Integrated into Every Investment Process – Agreement on Weightings, Scoring and Definitions
- Relevant Benchmarks for ESG Risk Measurement and Assessing ESG Factors
- What type of ESG Research or Data is most helpful?
Alex Bernhardt, Principal, Head of Responsible Investment, U.S., Mercer
Travis Antoniono, Investment Officer, Corporate Governance, California State Teachers’ Retirement System, (CalSTRS)
Tony Campos, Director, ESG Product Management, FTSE Russell
Bruno Bertocci, Managing Director, Head of Sustainable Investors Team, UBS Asset Management (Americas) Inc.
Wednesday April 19th, 2017
- Macro Environment and Recent Developments
- Knowing the Historical Correlation of Commodity Prices and Emerging Markets, should we be Hesitant to Increase Allocations? Is there More Remaining in the Deflationary Cycle?
- What Factors do we need to see for us to Believe that Emerging Market Assets have Bottomed?
- How have EM Headwinds Impacted your Deployment?
- How have Emerging Market Economies fared under Global Central Bank Monetary Policy? Inflows?
- What would be the Effects on Emerging Markets if we see Weak or Negative Growth in the U.S or Instability in Eurozone, (including Brexit)?
- Given the Current Environment, will Emerging Markets Outperform Developed Markets?
- What are Realistic Return Expectations? How might that Differ based on Region?
- What is an Appropriate Long-Term Allocation to Emerging Markets?
- What Impact have we seen as a Result of the Strong U.S. Dollar?
- What can be done to Mitigate Currency Risks?
- How do Valuations look Relative to Risk?
- Outlook for China – are you Concerned about their Credit and Real Estate Bubbles?
- India to Benefit from its Fast Rate of Urbanization? Still in Need of Substantial Reform?
- Are you Investing in Higher Growth Markets such as Southeast Asia, Africa or Latin America? Which particular Countries? Do you see Higher Risk, Returns and Diversification Factors here?
- Which Markets in Frontier Countries can you Profit from Strong Growth and Access a Lower Correlation?
- The Case for Emerging Markets Corporate Debt
- What Metrics are you using to Determine Relative Value in Sovereign Bonds?
- Public vs. Private Emerging Markets – Benefits and Drawbacks of each
- Choosing an Emerging Markets Fund or Manager – should you be Investing by Region, Country or Sector?
- Active vs. Passive Debate
Bryan P. Shipley, CFA, CAIA, Co-Chief Investment Officer, Arnerich Massena, Inc.
Thomas Vester, CFA, Chief Investment Officer and Portfolio Manager, LGM Investments
Leandro A. Festino, CFA, CAIA, Managing Principal, Meketa Investment Group, Inc.
Cathy L. Hepworth, CFA, Managing Director, Emerging Market Sovereign Strategist/Portfolio Manager, PGIM Fixed Income
Currency and Currency Alpha
(A) Currency Market Overview
- Central Bank Intervention and other Factors Driving Currencies. More or Less Volatility and Liquidity?
- What is the Relationship Between Volatility and Currency Returns?
- Can Currencies be Forecasted via Fundamentals, Cycles and Trends? If so, how can this Information be Incorporated into a Currency Hedging Program or into Active Currency Management?
- Benefits of Active Management
- Widely Confused Difference Between Currency Hedging and Currency as an Asset Class – how do they Differ in terms of Implementation Approaches?
- Different Skills Required for Currency Hedging vs. Currency Alpha – should a Different Manager be used for Each Approach or is it Possible to be Skilled in Both?
(B) Currency Overlay Hedging
- Given Plan Sponsors Non-U.S. Exposure, how do you know if you should Consider Implementing a Currency Hedging Program? What Factors should be considered in this Determination?
- How much of a Reduction in Portfolio Volatility and Risk should be Expected?
- Can it be More Beneficial to be Unhedged?
- Hedging Costs – how should this factor into your Decision?
- When Hedging against a Further Dollar Rise, what are the Risks if the Dollar has a Significant Decline?
- Various Implementation Approaches – Passive vs. Dynamic?
(C) Currency Alpha
- Goals of a Currency Program
- Benefits of Non-Correlated Returns to Equities, Fixed Income and Alternative Investments
- How does Investing in Currency Diversify and Reduce Risk? Natural Diversifier for the Duration Risk in Bonds?
- How do you Manage Risk Factors?
- What are the Return Expectations?
- When considering Investing in an Active Currency Strategy, what should you look for in a Manager?
Aoifinn Devitt, Chief Investment Officer, Policemen's Annuity and Benefit Fund of Chicago
Max Darnell, Managing Partner, Chief Investment Officer, First Quadrant
Mark Astley, Chief Executive Officer, Millennium Global Investments Ltd.
Ian Toner, CFA, Chief Investment Officer, Verus
Distressed Investing – Opportunistic and Special Situations
- Where are we in the Distressed Cycle? When will the Vast Sums of Undeployed Capital come in off the Sidelines?
- How does the Current Economic and Interest Rate Environment affect the Attractiveness of Distressed Strategies?
- What are your Expectations for Default Rates going forward? Has the Fed and Easy Credit Masked Fundamentals?
- Prevalent Covenant-Lite Deals – are we seeing Bubble Conditions setting us up for Problems during the Next Cycle?
- What are your thoughts on the Recent Leverage Trends?
- Has the Regulatory Environment Changed the Opportunity Set? Any Adverse Effects or Liquidity Issues it may cause?
- Scope of the Distressed Market and Segments – Corporate Credit, Structured Credit, Commercial Real Estate, Hard Assets, Liquidations, Segmentation by Deal Size, etc.
- Which Sectors, Strategies and Geographies will create the Best Opportunities? Any Areas that should be Avoided?
- What Distressed Opportunities are we seeing the Energy Sector?
- What’s the Potential Impact of the Debt Piled up by Corporations for their Share Buybacks?
- Do you find Europe Attractive? What are the Opportunities and Risks? Any Countries, Sectors or Types of Deals that Stand Out?
- Marketable Distressed Strategies – how Correlated are they to Public Equities?
- How do Investors go about Choosing the Right Distressed Strategy, Investment Style and Approach?
- How will the Different Implementation Approaches affect Expected Returns? Control vs. Non-Control? Private vs. Public?
- Distressed Debt Vehicles in Hedge Fund Format vs. Private Equity Drawdown Structures – what are the Pros and Cons of Each?
- What Skill Sets/Characteristics should Pension Plans look for in a Distressed Manager?
- What are the Return and Risk Expectations?
- What are the Biggest Challenges you face to Delivering Returns?
Scottie D. Bevill, Senior Investment Officer - Global Bonds and Real Return, Teachers' Retirement System of Illinois
Scott Klein, Founding Partner and Co-Chief Investment Officer, Beach Point Capital Management LP
Chris Semple, Managing Director, Crestline Investors, Inc.
Mike Krems, CFA, Managing Director, TorreyCove Capital Partners
- Current State of the Credit Market
- Where are we in the Credit Cycle and how does it Differ from the Past?
- With Global Central Bank Monetary Policy Heavily Influencing Rates and Credit Markets, how do you see this Developing as far as Risk and Opportunities Across Credit going forward?
- What will be the Catalyst that will cause Credit Spreads to Widen and Defaults to Rise?
- How much should Plan Sponsors be Allocating to Credit? What is the Optimal Structure to a Credit Portfolio?
- What Subsectors of Credit are Most Attractive? What are your Best Ideas for Finding Value? Any Areas you are Avoiding?
- High Yield Market – is it possible to see a High Yield Meltdown with a Lack of Liquidity? Understanding the Risk Factors and the Strong Correlation to Equities
- Bank Loans Overview – High Risk in Covenant-Lite Loans?
- State of Securitized Markets – how Cheap is Securitized Risk vs. Unsecuritized Risk and how do you measure that? Long-Term Prognosis for Spreads?
- Outlook and Considerations for Structured – CDO, CDS, CLO, CMBS, RMBS, ABL, ABS
- Outlook for Emerging Market Debt
- Liquidity and its Implications for Multi-Strat. What might be some of the Pitfalls?
- Do you see Investors being more willing to Trade Liquidity for Yield and should that be of Concern?
- Regulatory Changes and Leverage – what will be the Market Consequences?
- European Market – are there Opportunities Now or More Downside Risk?
- Considerations for Selecting a Manager and Strategy
- How will the Sector you Invest in Perform when Rates Rise? Is that a Concern and how do you Manage that?
- What are the Trade-offs between Mid-Market and Large Market Credit Investing?
- Credit Investment Mandates – are they Too Narrow? Which Bucket or Asset Class does it fit into and should it be Defined as Opportunistic Credit?
Zeke L. Loretto, Director, Head of Global Investments, eBay
Pete Keliuotis, CFA, Senior Managing Director, Cliffwater LLC
Trey Parker, Partner, Head of Credit, Portfolio Manager, Highland Capital Management, LP
Christopher A. Sheldon, Member & Head of US Leveraged Credit, Kohlberg Kravis Roberts, (KKR)
Steven Oh, CFA, Global Head of Credit and Fixed Income, PineBridge Investments
(A) Current and Future State of the Hedge Fund Industry
- Why have Hedge Funds Underperformed?
- Will we see More Hedge Funds Shutting Down?
- Is the 2 and 20 Model Broken? Is it Dead for Larger Pension Funds? What Trends have you seen as far as Pressure on Fees?
- How do you assess the Tradeoff between Lower Fees and Longer Lock-ups?
- Inverse Correlation Between Assets Size and Performance on both an Industry Basis and Manager Level – do you Agree or Disagree this could be mean it’s More Difficult for Managers to Generate Strong Returns?
- Do you Believe Smaller Hedge Funds will Continue to Outperform?
- What Pension Inflow Trends have you seen?
- What is Driving the Increase in Demand for Strategies Uncorrelated with the Capital Markets? Which Low Correlated Strategies do you think will Continue to see Increased Interest?
- How do you see Succession Planning playing out? What Tends to Work and what Does Not?
(B) Implementation Options
- What is the Future of the Fund of Funds Space? How is it Changing? Where will Fees be? What will it take to Stay Competitive?
- Considerations for Selecting the right Hedge Fund or Fund of Funds – Due Diligence and Manager Selection. What are the Key Traits you should be looking for?
- Deciding Between Fund of Funds vs. Direct – what are the Key Considerations?
- Long-Short Equity Hedge Funds – what Differentiates Managers that have been able to Outperform?
- Which Strategies offer more Transparency and Liquidity?
- Do you find Opportunities within the Global Macro Space Attractive and if so, why?
- Liquid Hedge Fund Products such as UCITS, 40 Act and Hedge Fund Replication – are they a Viable Alternative and Under which Circumstances? How has their Performance and the Lower Fees Fared to Hedge Funds?
- If the S&P loses 30%, what Downside Protection, Drawdown or Return Range do you expect we’ll see from each of the Different Hedge Fund Strategies?
- If there was a Hedge Fund Strategy you would Invest in over the next Few Years, which one would it be and why?
(C) Portfolio Construction and Risk Management
- Importance of Operations Due Diligence. Any recent Developments? How often should Operations be Reviewed?
- Transparency and Risk Aggregation Data – are they Accurate?
- How many Hedge Fund Strategies do you need? Should you focus on a few better Strategies or is the Size of your Portfolio a Factor?
- Can Hedge Fund Strategies be Tactically Managed?
- How should we View a Long/Short Manager’s Performance when a Portion of the Return Comes from Market Beta?
- What Trends do you see Developing in Regards to the way we Evaluate Liquidity Provisions for Hedge Funds? Blurring of the Lines Between Hedge Funds and Private Equity?
- Should you ask for a Separate Account?
- Is the Trend towards Managed Accounts the Future? Understanding the Benefits of Increased
Transparency and Control, more Liberal Liquidity Terms for Redemption/Termination, Outsourcing Operational Oversight/Support
Jim Vos, Chief Executive Officer, Aksia LLC
Emanuel J. Friedman, Chief Executive Officer & Co-Chief Investment Officer, EJF Capital LLC
Ben Bronson, CFA, CAIA, Investment Officer, Fire and Police Pension Association of Colorado
David C. Saunders, Co-Founder, Chief Executive Officer, K2 Advisors L.L.C.
Jane Buchan, Ph.D., CAIA, Chief Executive Officer, Managing Director, Pacific Alternative Asset Management Company, LLC, (PAAMCO)
David E. Francl, Managing Director, Absolute Return, San Francisco Employees' Retirement System, (SFERS)
- Global Macro’s place in the Hedge Fund Industry – what are the key Differences from other Hedge Fund Strategies?
- Attributes – Diversification, Uncorrelated, Liquid, Transparent and Regulated
- Historical Performance of Managed Futures
- Performance during Periods of Market Stress or Crisis Events
- How much can it Decrease the Depth of Portfolio Drawdowns and Volatility?
- Volatility is usually Perceived as Risk within Portfolios – is this the same within Managed Futures?
- Increasing your Exposure to Global Markets and Non-Financial Sectors
- How to Implement an Allocation to Managed Futures
- How do you Manage Risk and Volatility?
- What Questions should an Investor ask a Prospective Manager?
- Size of the CTA in terms of Assets Under Management – any considerations to factor in?
- Is the Proliferation of Managed Futures as a Risk Premia going to Change the Landscape?
Grant Jaffarian, President, Chief Investment Officer, AlphaTerra, LLC
Real Asset Strategies
- Current Market Environment
- Deflationary Pressures – how should this affect our Allocation and Approach? With the Recent Uptick in Inflationary Measures, is it Too Early to say we’ve begun a Reflationary Regime? What Factors do we need to see for us to Believe that Commodities have Bottomed? Any Long Term Cycles or Patterns to go by?
- Based on Previous Down Equity Markets, what Performance can we Expect from Commodities if we have Market Turbulence? How Strong is the Correlation?
- What are your Views on particular Sub-Sectors and Where are the Pockets of Value?
- How are Renewables Affecting Specific Commodities?
- What Currency or Weather Related Impacts are you seeing on Specific Commodities?
- Understanding the Different Approaches to Investing in Commodities – Equities, MLPs, Indexes, Futures, Physical Commodities, Private Equity Real Assets
- Investing in Commodities through Private Equity vs. Stocks or Indexes – Benefits and Drawbacks of Each
- True or False – Natural Resource Stocks are Not an Efficient Way to get Commodities Exposure
- Are MLPs more Highly Correlated to Commodity Prices than We Thought?
- Roll Effects and its Impact on Returns
- Investing in Long/Short vs. Long Only
- Active vs. Passive
- Any Recent Developments in Commodities Risk Premia? Smart Beta as applied to Commodities?
- What are the Key Criteria that would lead to Manager Outperformance?
- Risk Factors
John Shearman, Partner, Portfolio Analyst, Albourne America
Ben Ross, Senior Vice President, Co-Portfolio Manager, Cohen & Steers Capital Management, Inc.
Roland Morris, Portfolio Manager, VanEck
- How will we know when Oil Prices have Bottomed?
- Dry Powder – what will be the Trigger for Capital to be Deployed? Are you hoping for a Second Washout to Deploy more Capital and Profit in the Long Run?
- How Important are the Credit Markets in the Deployment of Private Capital?
- How do you think about the Risk and Approach to this Space in a Climate Changed Focused World?
- Where are the Best Opportunities to Deploy Capital in this Environment?
- How has the Current Commodity Market Distress Impacted the Balance Sheets of Oil and Gas Companies?
- What are the Advantages of Investing in Private Energy?
- Upstream, Midstream and Downstream Overview
- How has the Oilfield Service Industry Impacted Upstream Oil and Gas Operators?
- Thoughts on Midstream MLPs with their Business of Oil Storage Services and its Cashflow?
- What Type of Investments are there with Returns Independent of Oil and Gas Prices?
- What does the Future Hold for Shale?
- Portfolio Decarbonization – how do you Deal with LP Concerns on this Issue? Has it Impacted your Fund Commitments?
- Access – Public (Stocks and MLPs), Indexes, Futures, Private, (Direct, Funds, Fund of Funds). Which one is most likely to Benefit?
- Big vs. Small Funds, Deal Size
John Nicolini, CFA, Managing Director, Verus
Avik Dey, Managing Director, Head of Natural Resources, Canada Pension Plan Investment Board, (CPPIB)
Lara Banks, Managing Director, Makena Capital Management, LLC
Infrastructure Market Outlook
- Why should Investors consider Committing Capital to the Infrastructure Space?
- State of Development of the Infrastructure Asset Class – Where are we now in terms of Appetite/Penetration amongst Investors’ Allocations? How much Room to Run is there for the Asset Class to Continue to Develop?
- Is there Too Much Money Chasing Too Few Opportunities? What will Cause High Valuations to Ease and Dry Powder to be Deployed?
- What Effects have we seen from Monetary Easing? Brexit? Terror Attacks?
- How has Performance been and what are the Recent Return Expectations?
- How will Returns be Impacted by Low Oil Prices for an Extended Period?
- Which Geographies and Sectors are Most Appealing?
- How have Risk/Return Expectations Changed with Global Sovereign Debt Trading at Zero or at Negative Rates? Have these Views Changed Investment Approaches for Developed vs. Emerging, U.S. vs. Non-U.S., Listed vs. Unlisted or Greenfield vs. Brownfield?
- Infrastructure Debt as a Growing Area – will it deliver for Investors Searching for Yield?
- What are the Biggest Challenges/Risks associated with Infrastructure Investing?
- Any Advantages or Limitations of Particular Implementation Approaches?
- What are the Advantages of Open-Ended Funds over Closed-Ended Funds? Will we see a Surge in Open-Ended Funds in the Coming Years?
- Is the Rise in Public-Private Partnerships Inevitable due to Lack of Gov’t Funding and High Debt? What Opportunities will this Create?
- Debt Heavy/Equity Shortage Deals – how and when will Pension Investors Overcome this Highly Leveraged Roadblock?
Todd Lapenna, Partner, Infrastructure & Real Assets, StepStone
- Current State of the Real Estate Market
- Is a Correction on the Horizon and How Significant? If so, what is the Single Biggest Risk Factor?
- What would be the Impact of Rising Rates on your Real Estate Portfolio? What are the Short-Term and Long-Term Implications?
- With Recent FIRPTA Changes, how has Foreign Investment Influenced U.S. Real Estate Investment? Effects on Valuations?
- Is U.S. Core Too Expensive? What are your Return Expectations for the Sector?
- Do you see Capital Moving Out of Core and Into Higher Risk Segments?
- Within Non-Core, which Value-Added and Opportunistic Strategies are Most Appealing?
- Do you believe Commercial is Fully Priced and Not Pricing in Risk or Disruption?
- Is the Bridge Financing Opportunity Attractive from Maturing CMBS?
- Multifamily Conditions – might it become Less Desirable compared to the past few years?
- Which Property Types are At Risk Today?
- Is there still Opportunity in Niche Property Types such as Senior Housing, Student Housing, Storage or Datacenters?
- What’s happening with Leverage?
- Analysis of Cap Rates and Vacancy/Occupancy Rates – any Conclusions you can draw?
- Asia and European Real Estate Outlook – Opportunities, Investment Trends and Capital Flows
- Has the Popularity of Closed Ended Funds Declined?
- Will Co-Investments become more Common?
- Current State of the Real Estate Secondary Market
- Programmatic Joint Ventures – why are these Joint Ventures being done? Will more Pension Plans Team up with Commercial REITs?
- Larger vs. Smaller Fund Size – which ones will Outperform going forward?
- Entry Issues with Open-Ended Funds and Concentration into Fewer Funds?
- What Strategies do you see as the Biggest Risks and the Biggest Rewards/Relative Value for the Future?
Chris Cunningham, CAIA, Consultant, Vice President, The Townsend Group
Jeb Belford, Managing Director, Portfolio Manager, Clarion Partners
Mary Ludgin, Managing Director, Head of Global Research, Heitman
Marc Weiss, Partner, Head Private Real Estate Secondaries and Primaries, Partners Group (USA) Inc.
Peter H. Collins, Vice Chair, Investment Advisory Council, State Board of Administration of Florida
- Are High Levels of Dry Powder Here to Stay? Will it take a Sustained Market Correction or Crisis to Bring Undeployed Capital off the Sidelines?
- Considering the Current High Valuations, Low Interest Rates, Ample Leverage and a Strong Fundraising Environment, what Similarities and Differences do you see Compared to 2006-2007?
- Protecting your Current Portfolio – are you making Investment Decisions or Managing your Portfolios Differently in this Environment? How do you Avoid Possible Pitfalls or Getting Involved in Expensive Deals?
- If we have an Economic Slowdown or a Recession, how would you Approach New Investments?
- What are your Views on GP Restructurings and are you More Accepting of them?
- For Buyouts, what Sectors or Geographies do you Favor? What Sectors do you tend to Avoid in this Environment and why?
- Do you Prefer Buyouts or Growth Equity over the next few years and why?
- Are we Currently in a Venture Capital Bubble?
- What are your thoughts on Co-Investments? Do you Worry about the Outcome if this Cycle Turns?
- Secondaries Deal Volume, Pricing, Pressures and Futures Expectations
- Have you taken steps to Diversify your PE Portfolio and find Investments with a Non-Correlation to the PE Space in General? Which of these Non-Correlation Strategies have you Allocated to or favor?
- As an LP, are you willing to Pay Higher Fees for Managers with the Best/Proven Track Records?
- Do you believe Charging Fees on Invested Capital rather than Committed Capital can Hurt Returns?
- Outlook/Issues for European PE Post-Brexit?
- After a Long and Extended SEC Crackdown and a Trend towards Increased Transparency, what Impacts are you expecting on the industry going forward?
Robert L. Greene, Chairman, Virginia Retirement System
Charles H. van Horne, Managing Director, Abbott Capital Management, LLC
Paul Lanna, Partner, Coller Capital
Rodney June, Chief Investment Officer, Los Angeles City Employees’ Retirement System, (LACERS)
Peter O. Wilde, Managing Director, Providence Equity Partners
(A) Risks, Allocations and Macro-Based Decisions
- In this Low Growth, Low Return and Fully-Valued Environment, how has it Impacted your Investment Program and your Asset Allocation?
- What’s your Opinion on the Sustainability of the Fed-Induced Stock Market Rally? Thoughts on the Fed and Global Central Banks’ Monetary Policy?
- Are there any Strategies you like that provide a Low or Non-Correlation to Traditional Investments that can Provide Outsized Returns during Periods of Market Stress?
- With the Collapse of Commodities, Oil, the Slowdown in China, the Troubles of the European Union and more, are you Hedging Against the Risk of Further Deflation? Has the Recent Uptick in Inflationary Measures Changed your Views?
- What Strategies does your Fund utilize that will Protect against Interest Rate Risk and Duration Risk?
- What sort of De-Risking Strategies or Risk Management Approaches has your Fund Integrated into the Investment Decision Process?
- Does LDI or Risk Parity Make Sense Now Considering Current and Future Market Conditions?
- Do you Incorporate Multi-Asset Investing and do you believe it can Limit Downside Risk?
- Do you believe your Hedge Fund Strategies will provide a Cushion for the next Market Downturn? How do you use them to Reduce Risk?
- Have you Allocated Funds to take Advantage of the Dislocation in Energy/Oil? Which Sectors or Strategies do you favor?
- What do you feel is the proper Emerging Markets Allocation and are there any Regional or Frontier Strategies that interest you?
- Have you made Long-Term Cash Flow Investments through Partnerships and Co-Investment Structures?
- Do you Believe the Impact of Regulation has Created a Reduction in Market Liquidity? Has it Impacted your Fund or Decisions? Will there be Sufficient Liquidity in the System to Cope with Conditions of Market Stress?
(B) Alignment of Interests
- What Changes or Trends have you noticed in Fee Structures/Terms and your Bargaining Power?
- What Tactics work best for you when attempting to Negotiate Private Placement Agreements?
- Given the Low Return Environment, shouldn’t there be an Industry-Wide Threshold (perhaps 3% - 4%), before Carried Interest Kicks In? How can we go about Making Progress with this Issue?
- Have you Trended Towards a Passive Equity Allocation with a Lower Cost?
- What Support would help you to do a better job of Addressing and Solving Investment Problems? What Discretion and Authority do you have with those Problems?
- Any Progress in granting you and your Investment Departments more Latitude in Tactically Managing your Portfolios in response to Extreme Economic Conditions?
- Any important Lessons Learned that you can share from your Individual Plan Experiences?
Russell K. Ivinjack, Senior Partner, Aon Hewitt Investment Consulting
Christopher J. Ailman, Chief Investment Officer, California State Teachers' Retirement System, (CalSTRS)
Tom Tull, CFA, Chief Investment Officer, Employees Retirement System of Texas
John D. Skjervem, CFA, Chief Investment Officer, Oregon State Treasury
Craig Husting, CFA, Chief Investment Officer, Public School and Education Employee Retirement Systems of Missouri, (PSRS/PEERS)
Tickets for Networking Event handed out in Conference Room
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Wine Tasting Networking Dinner
Hosted by The Pension Bridge – Join our group at for a wine tasting and dinner at the Press Club, located just next door to the Four Seasons. Meet your industry peers in great setting as California Wine Country comes to the heart of the city. Experience the finest winemakers with new and rare vintages. We’ll have a fun wine tasting reception, followed by a tasteful dinner with the highest quality organic ingredients. The Pension Bridge will utilize the 9000 square feet of the award winning “Best Restaurant Design” event space for networking for our high quality conference group.
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