Tuesday, November 12, 2019

Written by Alex Beveridge

Geopolitical tensions, macroeconomic instability, ESG and scarcity of return are some of the big picture challenges currently occupying the minds of Europe’s institutional asset owners. But, what are these allocators doing on a practical level to meet these challenges?

In preparation for the 28th Annual European Pensions Symposium (EPEN 2020), Institutional Investor has held over fifty conversations with senior investors and CIOs from Europe’s top pension funds to uncover the most common trends and challenges faced within the industry. As well as the issues mentioned above, allocators are keen to discuss:

  • the implications of negative yielding corporate debt
  • big data and the future of quant investing
  • aligning of interests in private markets
  • the impact of China on portfolios
  • the structure of emerging market portfolios

Reflecting on similar conversations from the European Pensions Symposium at the beginning of this year, we found that to mitigate the risks, some investors are focussing on non-interest rate related asset classes, such as alternatives.

Talking on our Conversations at II series1, Gregoire Haenni, Chief Investment Officer for CPEG said: “We’re looking at strategies such as domestic real estate, private equity, infrastructure, as well as ILS” in an effort to make their portfolio less dependent on the market. At EPEN 2020, we’ll take a look at how CPEG and other funds fared in their methods throughout this past year.

Despite the need to address and devise approaches to lowered interest rates, we also found that the importance of environmental, social and governance (ESG) criteria in portfolios remains pertinent. Denise Le Gal, Chair at Brunel Pension Partnership, put it best: “[ESG] is not a trend, it’s not a gimmick, there are some who may still be at a different point on their journey in terms of how they integrate ESG in the decisions that they make.”

Everyone knows implementing ESG investment strategies is a complex integration that needs to be sustainable for the long-run, however, there continues to be a lack of information and understanding of its significance in the industry. So, among several other topics, the subject of ESG will most certainly prevail at EPEN 2020.

On 5 – 7 February 2020 at the Ritz-Carlton in Berlin, we will bring together senior investment officials from Europe’s leading pension funds (here’s who attended last year) and global asset management firms to meet and network in a private setting. Through presentations, panel discussions, and breakout sessions, all of which are off-the-record, the programme offers asset managers the opportunity to address allocator concerns. We look forward to hearing your message.

For more information or to hear more from your peers who attended EPEN 2019, please contact me directly.

 

Alex Beveridge
Director
Institutional Investor
E: abeveridge@iilondon.com

 

1To see more interviews from our Conversations at II series, visit our website or find us on social @II Memberships & Conferences.

Author: Alex Beveridge

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