- With links to the most developed and extensive pipeline networks in the country, the Louisiana hub serves four major U.S. regionsSince 1990, the hub has been the physical delivery point for the world’s most-traded natural gas futures contract
The Healthcare of Ontario Pension Plan has appointed Michael Wissell as its new chief investment officer, the Canadian pension giant announced Wednesday.
Wissell will assume investment responsibilities for the C$104 billion (US$82 billion) fund from president and CEO Jeff Wendling, who has been serving in both roles since becoming CEO in March 2020.
“I’m honored to be HOOPP’s next CIO and look forward to building upon the success of my predecessors,” Wissell said in a statement. “HOOPP has an excellent track record of adapting to evolving market conditions and maintaining a strong funded position for our members.”
Wissell has been serving as senior vice president of HOOPP’s capital markets and total portfolio since he joined the fund more than three years ago. Prior to joining HOOPP, he spent 16 years at the Ontario Teachers’ Pension Plan, where he was in charge of the public equities team and the portfolio construction...
Outsourced chief investment officers are in high demand after delivering strong results during the pandemic, according to a report by Cerulli Associates.
The research and consulting firm expects the OCIO market to grow at 5 percent annually for the next three years, a faster pace than the broader institutional market.
Over the year ending March 31, the broad market AlphaNasdaq OCIO index, which measures all account-level returns reported by 39 OCIO providers, rose 30.69 percent. According to Laura Levesque, associate director of Cerulli’s institutional division, this shows that OCIOs brought robust financial recoveries to their clients in the year following the start of the pandemic.
OCIOs often combine different asset classes like cash, real estate, bonds, and stocks to meet the risk levels that their clients can take. These multi-asset strategies are crucial during market dislocations like those caused by the Covid-19 pandemic,...
As more institutional investors adopt cryptocurrencies, allocators and crypto managers are looking beyond Bitcoin for opportunities.
Take for example, Bitwise, which last week launched what it’s calling the first large-cap cryptocurrency index fund without exposure to Bitcoin. The index fund is a nine-currency, ex-Bitcoin version of the company’s flagship Bitwise 10 Crypto Index Fund, which launched in 2017 and includes the ten largest cryptocurrencies in the world.
According to Matt Hougan, chief investment officer of Bitwise, the decision to exclude Bitcoin was two-fold.
For one thing, he said many investors first came into the crypto markets through Bitcoin. Since then, new currencies have arisen and new products have dominated the space. In fact, over the past year, Bitcoin’s share of the total market capitalization of the crypto space fell from 69 percent to 42 percent, according to Bitwise.
Jeff Ubben, the activist hedge fund manager who founded Inclusive Capital Partners a little more than a year ago, is calling for the Securities and Exchange Commission to make companies include a price for carbon as part of their climate-related ESG disclosures.
Ubben, who is also a board member of ExxonMobil, made his comments in a September 8 letter to the SEC. It was one of thousands sent since SEC Commissioner Allison Herren Lee earlier this year asked for public comments regarding upgrades to the SEC’s climate change disclosures.
“[Inclusive Capital] believes that — even in the absence of Congressional establishment of a national price for carbon — the most impactful role for the SEC would be to require all U.S.-listed companies to report the price of carbon they assume in their strategic planning, from decision-making to risk assessment and capital allocation,” he said in the 14-page missive.
Carbon pricing “captures the...
On Wednesday, August 25, I interviewed Federal Reserve chairman Jerome Powell.
More correctly, I interviewed an artificial intelligence simulation of chairman Powell — and it was amazing.
The inspiration for the interview was “The Jessica Simulation: Love and Loss in the Age of A.I.,” an article in the San Francisco Chronicle written by Jason Fagone.
Here’s my synopsis: Boy meets girl. Boy and girl fall in love. Girl dies. Eight years later, boy uses AI to create and communicate with startlingly unnerving facsimile of dead girl (Jessica), which helps him come to terms with his grief.
In the European trading and equity business, the more things change, the more they stay the same.
The biggest trend in trading and execution, according to industry leaders, remains the convergence of high-touch and electronic trading, amid a push for automation and algorithmic trading by the buy-side.
“It’s been ongoing for years but definitely an accelerating trend as more and more client desks become automated and quantitative,” said Antoine Bisson, head of European execution for Exane BNP Paribas.
Couple that with 2018’s update to the Markets in Financial Instruments Directive and the Covid-19 pandemic — both of which continue to significantly impact the relationship between sell-side firms and their clients — and the result is Institutional Investor’s All-Europe Equity Trading Team.
Hartford HealthCare, the $4 billion fund supporting a Connecticut-based hospital system, is anchoring a new GP-stakes style fund for diverse managers.
The $400 million fund is being raised by Xponance, which is working alongside Investcorp to deploy the capital. Hartford is anchoring the fund with a $50 million commitment as its first investor, according to David Holmgren, the organization’s chief investment officer.
The new fund will target diverse and women-owned funds in private equity and private credit, among other alternative asset managers.
“These are the firms that are on the cusp of growing,” said Marquette Chester, senior managing director and head of alternatives at Xponance, over Zoom. “These are people with really good returns. They need to do something to accelerate or improve their businesses to facilitate a better, broader platform.”
- The influence of the treasury market and the trend toward self-directed trading meet with arrival of Micro Treasury futuresSmaller futures contracts could open the door to hedging strategies for traders in equity, foreign exchange or gold markets
Institutions with larger shares of capital invested in private equity and venture capital earned higher returns in 2020, according to new research from Cambridge Associates.
In the past decade, those with a private investment allocation of at least 30 percent have outperformed those with an allocation of 10 percent or less by 200 basis points, the investment and consulting firm said.
Private equity and venture capital investments were also found to be more profitable than U.S. public equities over the last five, 15, and 25 years.
In the report, Cambridge Associations evaluated the performance of public equities by calculating the return of the S&P 500 index if shares were bought and sold on a schedule matching the cashflows of private funds. Measured this way, U.S. public equities have fallen behind their private peers by 250 to 320 basis points over the last five and 15 years.
Institutional demand for outsourced portfolio management services is generally contingent on one factor: size. While smaller foundations tend to need more outside help, larger institutions are often self-sufficient, relegating in-house staffers to investment management duties. But, in an unexpected twist, outsourcers may have an untapped opportunity at foundations with $500 million or above in assets under management.
According to the Commonfund Institute’s latest annual study on private and community foundations, only 14 percent of surveyed private foundations with over $500 million in assets had internal investment committees, while 28 percent had an internal investment office with a chief investment officer.
“That’s very interesting, because that means there’s a lot of opportunity left for outsourcers,” executive recruiter Charles Skorina told Institutional Investor.
The remaining 58 percent likely use some hybrid approach,...
Ackman asserted in a letter to Tontine shareholders last week that Assad is merely a “prop” for the law professors and other lawyers putting the complaint together. The same lawyers and firms are in all three lawsuits, and they include former Securities and Exchange Commissioner Robert Jackson, an NYU law professor who was one of former President Trump’s Democratic nominees, and Yale law professor John Morley. The two professors have reportedly said they are using the lawsuits to reform the SPAC market.
“The real desire is to go after all SPACs,” said Joel Rubinstein, partner at White & Case who advises SPACs.
All three cases accuse the SPACs and their sponsors and directors of breaching the Investment Company Act of 1940 because they hold securities. After going public, SPACs place the proceeds in trust, where they hold government securities and money market funds that invest in government securities until they use the money to help purchase a...
Shareholder activism is in for a dramatic shift as investors move away from the classic approach of targeting improvements at a single company and instead work to benefit their entire portfolios. But the activist hedge funds that have historically led proxy campaigns may not be the best suited to lead that charge, according to new research.
Presently, there are two main types of shareholder activism: the more traditional firm-specific activism, which targets a specific company and demands change to benefit that company, and systemic risk activism, which aims to reduce systemic risk in the larger market. According to Columbia University School of Law professor John Coffee, firm-specific activism may be phased out by systemic risk activism in the coming years, as investors emphasize issues like climate change and diversity and inclusion. However, for all but the top-three index managers — State Street, BlackRock, and Vanguard — systemic risk...
In late July, credible news reports said that Aon and Willis Towers Watson were in settlement talks with the government, setting the stage for a deal between the two giant firms. Three days later the $30 billion deal collapsed, with the CEO of Aon saying the companies had reached an “impasse” with the Department of Justice.
According to Kellner Capital CEO George Kellner, the busted deal illustrates many of the changes that have taken place during his four decades working in merger arbitrage.
For one, returns in merger arb used to come from digging up fresh information no one else had on deals and companies. Over time, regulators barred analysts from talking one-on-one with companies and information started pouring out of phones, including false leads like the certainty of the Aon-WTW deal closing — just days before the opposite happened.
The uncertainty inherent in that deal became obvious when the DoJ vehemently criticized...
Yale Investments Office has selected Matthew Mendelsohn as its next chief investment officer.
Mendelsohn is a director at Yale, covering its venture capital investments, which comprise more than 25 percent of Yale’s total endowment, according to the university’s Tuesday announcement of the appointment.
Mendelsohn succeeds David Swensen, who died on May 6 after battling cancer. Swensen was a legendary investor, pioneering the endowment model, which involves funneling a significant amount of an institution’s capital into alternative assets.
Over the last few months, the institutional investing industry has been waiting to see who Yale would name as his successor.
- Ethereum is practically synonymous with DeFi because it powers many cryptocurrencies in the decentralized finance sector.Ether is no longer following bitcoin’s price fluctuations as closely as it once did, and it is starting to be driven by its own catalysts.
Venture capital valuations at both the early stage and late stage surged during the second quarter, a PitchBook report shows.
According to the private market data firm, the average and median pre-money valuations at early-stage companies reached all-time highs of $105.4 million and $50 million, respectively. Meanwhile, late-stage companies recorded average and median second-quarter valuations of $882.4 million and $160 million, respectively, cementing a record first half.
The report attributed the rapid valuation growth to a positive economic outlook and cash influx from nontraditional investors, including mutual funds, hedge funds, sovereign wealth funds, and corporate venture capitalists. These nontraditional investors have been particularly active at the late stage, boosting the median pre-money valuation of their deals to $235.5 million, more than four times the valuation of deals made by traditional VC firms.
“In 2021, the...
Both private and public markets offer access to real estate investments — but according to new research, one may be more effective than the other.
In a new study published in the Journal of Portfolio Management’s real estate issue, authors Thomas Arnold, David Ling, and Andy Naranjo found that, when compared side-by-side, real estate investment trusts outperformed U.S. closed-end private equity real estate, or PERE, funds by 165 basis points annually.
The study was based on a sample of 375 PERE funds, which the researchers compared against an index of listed REITs and an index of private real estate funds. In order to accurately evaluate performance, the authors took a “horse race” approach, matching each PERE fund’s realized return with the return that would have been earned by investors in the indexes over the same investment horizon.
“It’s an apples-to-apples comparison,” said Arnold, the former global head of real estate at...
As allocators develop larger appetites for hot, new investment managers, they have to dig deeper into the emerging manager market to find talent.
But not every asset owner has the resources necessary to find the next Andreessen Horowitz.
“Institutional LPs can be overwhelmed, and a lot of them don’t have the systems in place to process at scale,” said Winter Mead, a former allocator. “They’re used to a cottage industry that looks at a few dozen investments per year.”
Enter Oper8r, Mead’s incubator for emerging venture capital firms that aims to polish them for institutional investment. Now recruiting its third cohort, the program’s alums have since scored investments from funds of funds, family offices, foundations, and other allocators.
On the age-old question of whether investing is more art or science, luminaries of the industry have long squared off on opposing sides of the argument.
On one side are flexible value investors like Seth Klarman of Baupost Group and Howard Marks, co-founder of Oaktree Capital Management, who tend to describe building portfolios as a craft, with the investor as artisan. In fact, Marks is supposed to have once explicitly stated, “Investing is more art than science.” These investors look for value wherever it can be found and are able to invest across markets and up and down the capital stack. That can mean public stocks, private credit, and anywhere in between as long as the risk-return trade-off makes sense.
On the other side of the discussion, we find quantitatively inclined investors. Adherents of a more systematic approach to value investing, such as University of Chicago alumni David Booth of Dimensional Fund Advisors and Cliff Asness of AQR, focus on the science...
Pensions, endowments, and other investors want to know how diverse the staff and senior management are at the private equity managers they use to deploy billions in capital.
To do that, the Institutional Limited Partners Association, a group that includes more than 500 institutional investors, has revised its due diligence questionnaire — referred to as the DDQ — and its diversity metrics template. The documents, which are standard forms that private equity firms fill out to help investors search for and vet managers, were last updated in 2013 and 2018. Private equity general partners and investors can comment on the drafts, which will be finalized and released in the fourth quarter, up until Sept. 24.
Most of the changes concern diversity, equity, inclusion initiatives. In the DEI section of the due diligence forms, ILPA added 12 questions, including on topics such as how firms are tracking and measuring diversity, and modified...
Since 2003, only 90 SPACs, or special purpose acquisition corporations, have been liquidated, but soon there may be one more: Bill Ackman’s $4 billion Pershing Square Tontine Holdings.
Ackman told shareholders Thursday night that he plans to dissolve Tontine, the largest SPAC ever launched, give investors their money back, and offer them warrants on a new security he has developed that is a twist on the SPAC format.
It’s all contingent on approval from the Securities and Exchange Commission and the New York Stock Exchange, which he hopes to have soon.
The news was a shock to investors who’ve endured a series of disappointments surrounding Ackman’s SPAC that, as Institutional Investor has reported, left many of them with heavy losses. The stock tumbled from its peak of $34 earlier in the year and finally went below $20, its IPO price, for the first time Thursday.
Corporations fighting to cut their carbon footprint are increasingly turning to carbon credits, a process that is becoming more navigable as verification and registration tools mature.
But behind every effort to deploy voluntary carbon offsets stands two things: an unassailable third-party standard and a registry that tracks the climate mitigating projects.
The private sector is in search of effective climate tools as pressure mounts from investors and consumers for more progress on fighting rising emissions. Carbon dioxide in the atmosphere hit another record in May this year, rising to 419 parts per million, a jump of about a half of a percentage point from the same month in 2020.
With the climate clock ticking, companies and individuals are expected to pour $100 billion into the carbon offset market by the end of this decade, up from about $300 million in 2018, according to Mark Carney, who is heading up a major private sector task force on how to improve...
After many institutions posted record-breaking performance in the latest fiscal year, some industry experts speculate that asset owners — particularly chief investment officers — will decide to go out on a good note and retire by year’s end.
Enter the next generation, the Institutional Investor Rising Stars. These 12 allocators, who work across the U.S. in both public and private institutions, are expected to be the next best leaders for pensions, endowments, foundations, health care funds, corporate plans, and family offices.
The editorial team selected the II Rising Stars from a pool of talented allocators nominated by their peers and bosses in May and June. Each of the selected Rising Stars will be honored during Institutional Investor’s fourth annual Allocators’ Choice Awards, to be held on September 22 at the Mandarin Oriental hotel in New York City.
Asset owners still have time to vote for their...
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