The Evolution of Long-Term Asset Allocation | #𝐒𝐀𝐋𝐓𝐍𝐘 | Summary and Q&A

TL;DR

Asset allocators discuss the complexities of long-term asset allocation in a bullish market, touching on topics such as private equity, hedge funds, ESG, digital disruption, and diversity.

Key Insights

• 🫵 Private equity is viewed as a complex industry requiring careful manager selection and sector-focused approaches.
• 👾 Allocators emphasize the importance of diverse and long-term investment strategies, particularly in the private capital space.
• 😘 Investing in private debt is challenging in a low-rate environment, but opportunities exist in real estate and infrastructure.
• 🙈 Hedge funds are seen as both diversifiers and return enhancers, with a focus on bottom-up fundamental research and manager due diligence.
• 📼 Asset allocators are exploring climate-related investments and sustainable strategies, such as renewables and carbon trading.
• ❓ The panelists believe technology and data analytics have the potential to enhance investment processes, but adoption varies among managers.
• 😫 Allocators need to assess their skill sets, identify gaps, and make deliberate decisions to allocate resources effectively.

Transcript

good afternoon and thanks for joining uh this panel is going to be talking about the evolution of long-term asset allocation and maybe some of the views will be a little bit less sanguine than some of the things i've heard over the last couple of days and we're in the middle of a very uh bullish market uh the risk on trade is alive and well and we'... Read More

Questions & Answers

Q: Is private equity considered an asset class or a complex industry?

According to the panelists, private equity is viewed as a complex industry rather than a standalone asset class. They focus on bottom-up, sector-focused approaches and look for opportunities in smaller deal sizes and specialized managers.

Q: How do asset allocators approach investing in hedge funds and the use of data-driven investment processes?

The panelists see hedge funds as both diversifiers and return enhancers in their portfolios. They emphasize the importance of manager selection and due diligence, particularly on the private side. While they haven't heavily adopted data-driven strategies, some managers are incorporating machine learning and analytics factors into their models.

Q: What are the panelists' views on climate and ESG investing?

While the panelists have not implemented a formal ESG or climate policy, they recognize the importance of sustainability and impact investing. They are exploring investments in renewables, like venture capital focused on clean technology and carbon allowances trading.

Q: How do the panelists approach digital disruption and the use of technology in their investment processes?

The panelists acknowledge the potential of new technologies, such as algorithms and data analytics, in enhancing investment processes. While not heavily relying on these technologies currently, they see their potential in areas like trading, analysis, and exposure review attribution.

Summary & Key Takeaways

• Asset allocators discuss their investment strategies and approaches, focusing on private equity, hedge funds, and diversification across asset classes.

• The panelists emphasize the importance of manager selection and due diligence, particularly in the private capital space.

• They also discuss the challenges of investing in private debt in a low-rate environment and the potential opportunities in real estate and infrastructure.