After the heat of June, the cooler and wetter days of July made it easier to write articles, work on corporate projects and attend events. I was delighted to win highly commended for defined benefit journalist of the year at the WTW Media Awards 2023. Ahead of the Chancellor’s Mansion House speech, my latest article for Professional Pensions asked how realistic it was to ask schemes to invest more in growth assets. I was invited onto not one but two podcasts with the People’s Pension to pick through the 11 documents and consultations unveiled in the aftermath of that speech. My latest feature for Professional Adviser discussed how fixed income is back in fashion and multi-asset managers are increasing duration. Two articles I had written for MandateWire were published – one which urged asset managers to take reputational risk more seriously and another which examined how the rise of AI has put a greater focus on social factors. And my latest piece for Sustainable Investment looked at the data dilemma for asset owners when it comes to ensuring effective corporate stewardship.
Highly commended defined benefit journalist of the year
I was delighted to receive highly commended defined benefit journalist of the year at the WTW Media Awards 2023. My awards submission explained how I was recovering from an operation the day before the LDI crisis broke. As I had just written about the impact of rising yields on DB pensions schemes’ collateral payments, I noticed long-dated gilts rising and tweeted from my hospital bed this could prove problematic. That turned out to be a prophetic post, gaining me a thousand additional followers! I had just filed an article just before going into hospital and my poor editor, Maggie Williams, had to update the piece rapidly as the crisis unfolded while I recovered.
How realistic is if for pension schemes to invest more in growth assets?
Ahead of the Chancellor’s Mansion House speech, my latest article for Professional Pensions discussed how to encourage pension schemes to invest more in UK growth. The piece examines the pros and cons of different proposals made in recent months. It highlights the mismatch between closed pensions schemes’ strategic goals and growth assets as well as discussing what could be done to encourage DC schemes to invest in venture capital and private equity.
Return to normality for multi-asset fixed income allocations
Fixed income is back in fashion, baby! My latest feature for Professional Adviser discusses how the re-emergence of inflation and high interest rates has changed the utility of debt in multi-asset portfolios. After a torrid 2022 when bonds fell along with equities, these assets now have an important role to play. As we inch towards the peak in the interest rate cycle, there is a tactical opportunity for capital gains for fixed income. From a strategic perspective, managers are increasing their duration in multi-asset portfolios.
Managers told to take reputation risk more seriously after social-media fuelled bank run
Asset managers need to take reputational risk more seriously after recent social-media fuelled bank runs. That’s the headline of this piece for MandateWire. Underlying market volatility has not increased but social media has the potential to speed up crises. For example, SVB collapsed in only 48 hours − much less time than Lehman Brothers. The ability of social media to turbo charge risks means asset managers need to take reputational risks much more seriously and start thinking about how to avoid and manage these situations.
Impact of AI on investment portfolios comes under scrutiny
The rise of AI has galvanised asset owners and managers into paying attention to social factors – the neglected middle child of ESG. My latest article for MandateWire examines how to tackle such a broad topic which touches every stakeholder in a business. Finding data for social factors can be challenging but it is possible for investors to hold companies to account on issues such as how they are using AI. Asset managers need to engage on these topics because there is reputational risk for these companies if AI is not being deployed responsibly, and they could incur both compliance cost and legal risk if regulations continue to strengthen.
Building trust in investors’ engagements – the asset owner’s data dilemma
As asset owners come under pressure to use their influence to improve corporate behaviour, good data is in increasing demand to provide transparency on asset managers’ actions. My latest article for Sustainable Investment discusses how an asset manager’s approach to voting and engagement needs to go hand in glove to ensure effective stewardship. Split voting can create issues because it separates the two processes. The volume of voting data can make difficult for asset owners to figure out how their managers are acting. Delayed reports and zombie voting makes this even harder. Engagement data is even trickier as the parameters are so wide but it is just as important to ensure stewardship can be assessed effectively.