Angel Santodomingo Martell was expecting 2020 to be tough. He didn’t know it would be this tough.

Speaking to II, the bank executive recalled how Banco Santander Brasil, where he has served as chief financial officer since 2014, had begun to position itself more conservatively last fall. 

“Back in September last year, we publicly said that we saw pockets in the economy — we thought we should stay back a bit,” he said. “We wanted to control risk. Obviously, we didn’t know about Covid-19.”

As of Tuesday afternoon, there were more than 5.4 million documented cases of Covid-19 globally, according to the World Health Organization, including over 363,000 in Brazil. The Latin American country has in recent weeks emerged as one of the latest hot spots for the contagious and potentially fatal disease, with the number of reported cases growing rapidly over the month of May.

Across Latin America, executives from sectors ranging from...

Owl Rock Capital — which lends money directly to U.S. middle market companies — has hired Oaktree Capital Management’s Jesse Huff to help lead a new opportunistic strategy.

Owl Rock is looking to raise about $1.5 billion to finance companies hit by the pandemic and economic shutdown, according to someone familiar with the lender.

Huff will be co-head with Nicole Drapkin, who has been with Owl Rock since its founding five years ago. 

Owl Rock managed $17.3 billion as of March 31.

The firm has been working on the new strategy for a year, the source said. Prior to the pandemic, Owl Rock felt that about 20 percent of the 5,000 companies it has reviewed in five years would fit a more opportunistic strategy than it offered.

Post-pandemic, Owl Rock estimates that about 30 to 40 percent of $2 trillion in private equity portfolio companies face meaningful uncertainty. 

[II Deep Dive: GMO: ‘It’s Too Early to...

“That lady in Central Park is a PM at an asset manager,” one chief investment officer tweeted Monday night, followed by a facepalm emoji. 

No one wondered whom Liz Simmie was talking about. 

At 1pm on Memorial Day, filmmaker Melody Cooper posted a video made by her brother Christian. It shows a white woman calling 911 on him, a birdwatcher who’d asked the woman to leash her dog as Central Park rules require. 

“I’m going to tell them there’s an African-American man threatening my life,” the dog owner says to Christian Cooper while dialing, then repeats to the operator, he’s “African-American.”

The video has been viewed nearly 30 million times. Many people on social media pointed to Emmett Till, who was falsely accused of whistling at a white woman and then murdered by white vigilantes.

Encounters with police involve far greater risk for black people — men especially — than for people of most other races, even...

Nearly three-quarters of investment professionals believe the U.S. Federal Reserve’s corporate credit buying programs have stabilized markets since their lows in March. But this week’s II Fear Index reveals investors are also worried about new risk introduced by the initiatives — including a dangerous assumption of credit risk by the public.

For six weeks, Institutional Investor has been polling investment professionals about everything from government initiatives to the rationality of equity investors for the weekly II Fear Index. This week’s survey had 168 respondents, the highest yet for the poll.

About 74 percent of the surveyed investment professionals said the move by the Fed to purchase corporate bond ETFs, a first for the central bank, provides necessary liquidity to credit markets. But 70 percent said the Fed’s ETF buying also “raises concern about careless risk taking.” Sixty-seven percent of respondents said the initiative...

The Canadian Pension Plan Investment Board’s assets under management ballooned during fiscal year 2020, despite the fourth-quarter market downturn.  

But along with the AUM increase came a 14 percent increase in investment management fees, the CPPIB’s annual report, released Tuesday, shows.  

The CPPIB reported a C$17.6 billion (US$12.77 billion) increase in net assets, to C$409.6 billion, for its fiscal year ending March 31. In other words, CPPIB’s assets under management increased by 4.5 percent year-over-year. 

The investment board paid a total of C$1.8 billion in investment management fees for the year, an increase of $222 million year-over-year. This is after its 2019 spend on fees had declined by C$152 million from 2018, Institutional Investorpreviously reported. 

According to the CPPIB, this was driven by an increase in assets under outside funds’ management and higher performance fees paid to...

On March 12 at 9 a.m., Sue Langley walked a mile across the City of London. 

The U.K. nonexecutive chair of global insurer Gallagher had come for a breakfast meeting near Smithfield, a thousand-year-old marketplace where poultry and meat trading begins early each morning. After the meeting, Langley strode to the Walbrook Building, opposite Cannon Street station, where Gallagher rents 70,000 square feet of office space on the first and seventh floors of the bubble-shaped building’s nine floors. The walk took her past Paternoster Square, home of the London Stock Exchange, and down Cheapside, a shop-lined street that takes its name from the Old English for “marketplace,” to the Bank of England interchange, where six roads meet at a junction in the shadow of the gray stone columns of the U.K.’s central bank. 

It was here, ducking down the alley that leads to her office, that she felt a chill.

The streets had emptied. Two-thirds...

On March 12 at 9 a.m., Sue Langley walked a mile across the City of London. 

The U.K. nonexecutive chair of global insurer Gallagher had come for a breakfast meeting near Smithfield, a thousand-year-old marketplace where poultry and meat trading begins early each morning. After the meeting, Langley strode to the Walbrook Building, opposite Cannon Street station, where Gallagher rents 70,000 square feet of office space on the first and seventh floors of the bubble-shaped building’s nine floors. The walk took her past Paternoster Square, home of the London Stock Exchange, and down Cheapside, a shop-lined street that takes its name from the Old English for “marketplace,” to the Bank of England interchange, where six roads meet at a junction in the shadow of the gray stone columns of the U.K.’s central bank. 

It was here, ducking down the alley that leads to her office, that she felt a chill.

The streets had emptied. Two-thirds...

When Apollo Global Management approached the Investment Management Corp. of Ontario about a credit fund it was raising in the market tumult caused by the coronavirus, the Canadian pension manger was ready to be nimble — even with its staff dispersed and working from home since mid-March.

“It was clearly in the maelstrom, in the midst of the market chaos,” Christian Hensley, IMCO’s senior managing director of equities and credit, said Thursday in an interview. “Apollo reached out as we had been in close contact with them about a number of opportunities.” 

Demand from institutional investors drove the speedy fundraising of Apollo Accord Fund III B, a credit fund that closed on $1.75 billion in commitments within about eight weeks, according to a statement from the alternative asset manager Thursday. IMCO said it committed $250 million to the fund, moving “very quickly” to benefit from “dislocated opportunities as they...

Just months after the head of Goldman Sachs Group’s outsourced chief investment officer business left the firm, the financial markets plunged.  

The coronavirus pandemic and resulting market volatility could have spelled trouble for Greg Calnon, the new global head of Goldman Sachs Asset Management’s global portfolio solutions group. 

Instead, for Goldman’s OCIO composite, the first quarter of 2020 was one of the best in the past ten years, Calnon said by phone Wednesday.  

Calnon, who has been with the firm since 2001, stepped into his new role after Kane Brenan, who spent more than two decades at Goldman, stepped down in October 2019 to be closer to family in Pennsylvania. Brenan started in his new role as president at TIFF Investment Management in April.  

“In terms of the transition, it was smooth,” Calnon said. “It wasn’t a tremendous learning curve because I knew generally how things...

Asset allocators are likely to have the upper hand over managers in any near-term commitments to private capital funds, if recent history is any indication.

Preqin data from 2009 indicates that limited partners were better able to negotiate lower fees and other favorable terms in the wake of the 2008 financial crisis. In the 2009 survey of private equity investors, 43 percent said the balance of power had shifted toward LPs, while just 2 percent believed that general partners had gained power. Thirty-six percent said their position had not changed, while the rest reported that they weren’t investing in private equity at the moment.

“The few LPs with fresh capital to commit found themselves in a stronger position to negotiate fund terms and conditions in their favor,” Preqin analyst Ashish Chauhan wrote in a new blog post discussing the 2009 data. “Some fund managers were able to compete for this investor capital by offering more...

Even as the ultra-competitive outsourced chief investment officer market pushes some providers out, at least one financial giant is going harder into OCIO. 

BNY Mellon has reorganized its outsourcing arm under the name BNY Mellon Investor Solutions, the firm is expected to announce Thursday.  

BNY has a long history running portfolios for institutions, but in a bid to increase its market share has shaken up its team structure and hired new staffers.

“I would consider it a broadening and deepening of what we already do to meet the requests we’re getting from clients,” said Catherine Keating, chief executive officer of BNY’s wealth management team, by phone. “While the focus before was on outsourced investment management, it is now on the broad capabilities of an investment office.” 

The newly formed unit will sell both traditional OCIO services and what it called “customized portfolio strategies.” OCIO...

One Ivy League college spokesperson has May blocked off on the mental calendar as “that month I spend talking about how much the investment team gets paid. It’s the same every year — a rhythm of the job.” 

In exchange for not paying taxes, U.S. universities (like all nonprofits) have to reveal what they pay their highest-earning staff members. This comes out in a public IRS filing called Form 990, which reports myriad financial data but is hallowed and sweated over for its juicy compensation section. 

Many elite universities are due to disclose their filings any day now, provided they follow their regular rhythm in this most irregular year. Here’s what to expect. 

1. Multimillion dollar pay packages for Ivy League investment executives. Basically all of them. “The investment chiefs at top-tier colleges and the Ivies are not that far off their commercial brethren in compensation,” says Paige Scott, a recruiter and...

The largest managers will tighten their grip on private capital markets during the coronavirus pandemic, according to PitchBook.

“Covid-19’s impact on in-person due diligence is thwarting fundraising attempts by nearly every GP and further exacerbating the bifurcation between mega-fund managers and everybody else,” Wylie Fernyhough, a senior analyst for private equity at Prequin, wrote in a new report analyzing fundraising trends. “Business travel and in-person due diligence will likely be inadvisable for LPs for several months, meaning mega-funds and more established firms will continue to assume the lion’s share of capital.”

According to the report, private equity firms Thoma Bravo, Silver Lake Management, New Mountain Capital, and Francisco Partners have either launched mega-buyout funds — defined by PitchBook as vehicles targeting $5 billion or more — or are nearing first closes in spite of the coronavirus pandemic. Smaller firms,...

BlackRock is rolling out new updates to its flagship Aladdin platform as the asset management giant tries to take over even more of the portfolio management software market.

Aladdin — short for Asset Liability and Debt and Derivative Investment Network — started in the early ’90s as a tool for evaluating bond portfolios. Last year, BlackRock bought private markets data firm eFront in pursuit of “whole portfolio view”: providing in-depth risk analytics across every asset class, public and private. 

Aladdin executives say they’ve done it. 

But the updates come as new competitors emerge for the BlackRock’s ubiquitous portfolio management platform. Quantitative investment firm Two Sigma debuted its data and risk-management tool Venn in late 2019. State Street has been developing a platform called Alpha, having acquired Aladdin competitor Charles River Development in 2018. 

Aladdin’s new software, which is...

Hedge funds have helped drive the stock market rally, ramping up their exposure to equities even as coronavirus concerns remain prevalent, according to Bank of America Corp. 

Their net long exposure to equities jumped to 34 percent this month, up 15 percentage points from April, Bank of America found in its latest survey of fund managers. That’s the biggest monthly increase for hedge funds since June 2018, bringing their stock exposure to just under levels seen in early 2020.

But hedge funds are participating in a rebound investors fear won’t last, according to the probe. Fund managers remain extremely bearish, maintaining cash levels above the ten-year average amid concern another surge in Covid-19 cases looms as the economy begins reopening.

Slightly more than half of those surveyed said the biggest “tail risk” is a second wave of infections from the novel virus that causes the Covid-19 disease. The next top worries are...

After more than two months of enduring an economic shutdown and record unemployment because of Covid-19, institutional investors are now split down the middle when it comes to the question of whether the government should do more to stabilize the economy or to ensure the health of the public.

Institutional Investor began polling investment professionals five weeks ago for the II Fear Index. For this week’s index, a slight majority, 51 percent, of respondents said the government should do more to ensure the health of citizens. Forty-nine percent said government should do more for the economy. Opinions on the matter are shifting rapidly: Last week, only 42 percent prioritized the economy over health. The results of this week’s poll are based on responses from 124 investment professionals.

The Texas Employee Retirement System lost 3.1 percent in the year ending March 31, the fund reported this week. But when it comes to private infrastructure and real estate assets, Texas ERS plans to stay the course.  

The retirement system is one of the first major public pension funds to release full-year performance results that include the downturn caused by the coronavirus pandemic. Board materials, published online ahead of Wednesday’s investment meeting, show how the retirement system is coping. 

The fund reported a $1.57 billion investment loss for the year, with total assets under management declining from $28.29 billion to $26.16 billion. Over three years, the retirement system returned 4.2 percent annualized, beating its benchmark but missing its actuarial target, according to the meeting packet.  

The fund returned 4.4 percent annualized over five years and 6.5 percent over ten years, slightly...

A majority of institutional investors were set last year to increase allocations to alternative assets, reflecting a long-term desire for private investments that won’t be derailed by the Covid-19 crisis, according to Natixis.

Seventy-one percent of investors said the potential for higher returns from private assets makes them worth the liquidity risk, while 63 percent believe such gains justify higher fees, Natixis Investment Managers found in a survey expected to be released Tuesday. The findings are based on a global probe late last year of 500 institutional investors, including pension funds, foundations, endowments, insurance funds, and sovereign wealth funds.

“There’s still significant interest in private investments,” Dave Goodsell, executive director of Natixis’s Center for Investor Insight, said in a phone interview. He said the search for yield within alternative assets will probably increase as a result of the Federal Reserve...

No mere crisis will strong-arm Cliff Asness or other stubborn value investors.

“Is (Systematic) Value Investing Dead?” he asked in the title of his latest blog, before answering in the first line: “No it’s not.”

Of course, Asness — co-founding principal of AQR Capital Management — is biased. “It goes without saying that we have a horse in this race (OK, we have a whole team of horses in this race),” he wrote.  

Having endured years of underperformance, value investors got knocked down again in the first quarter of 2020, which registered as the worst ever for value. In reaction, asset managers are getting vocal about the strategy’s longer term prospects. 

In the blog post and in a webinar for clients, Asness made the case for value and put to the test some popular arguments that the investing style has stopped working. Asness evaluated accounting measures beyond price-to-book, which critics have said is no longer useful...

A majority of institutional investors were set last year to increase allocations to alternative assets, reflecting a long-term desire for private investments that won’t be derailed by the Covid-19 crisis, according to Natixis.

Seventy-one percent of investors said the potential for higher returns from private assets makes them worth the liquidity risk, while 63 percent believe such gains justify higher fees, Natixis Investment Managers found in a survey expected to be released Tuesday. The findings are based on a global probe late last year of 500 institutional investors, including pension funds, foundations, endowments, insurance funds, and sovereign wealth funds.

“There’s still significant interest in private investments,” Dave Goodsell, executive director of Natixis’s Center for Investor Insight, said in a phone interview. He said the search for yield within alternative assets will probably increase as a result of the Federal Reserve...

A former employee is suing hedge fund firm Advent Capital Management and its founder for alleged sexual harassment and discrimination, the latest development in a long-running dispute between the employee and the firm.   

Courtney Robb, who worked as a junior investment associate at Advent Capital from 2016 to 2017, filed a suit Monday in the U.S. District Court for the Southern District of New York. The lawsuit claims that male employees engaged in a game called “f---, marry, kill,” in which they classified women, including their coworkers, into those categories.

Her suit alleges that during this game, one of her male colleagues said Robb “was such an uptight b---- that she already was at ‘wife’ status.” 

The complaint is the latest in an ongoing back-and-forth between Robb and Advent. When she was fired in 2017, she filed a complaint with the NYC Human Rights Commission, according to the lawsuit filed Monday. After...

The Texas A&M Foundation — which supports the College Station university — has hired as its new investment chief Mike Pia, following a review of the $2 billion fund. 

Pia had led the strategic partnership program at the Teacher Retirement System of Texas (TRS), overseeing about $15 billion, according to a Monday announcement from Texas A&M. The initiative was the brainchild of former TRS chief Britt Harris, and involved signing over huge chunks of assets to a clutch of favored asset managers, in exchange for special fees and investment terms. 

It is unclear who, if anyone, will directly replace Pia at TRS to take over the partnerships. A spokesperson did not immediately respond to questions. 

Pia started as chief investment officer at the A&M Foundation on May 1, the fund said. The “hire comes at an important time as the foundation investment team seeks to implement forward-thinking endowment management...

SLC Management — Sun Life Financial’s institutional asset management business — has raised $500 million for a strategy that will buy AAA-rated asset-backed securities with government loans available under a Federal Reserve program aimed at stabilizing credit markets.

In March, when credit markets collapsed as Covid-19 shut down the economy, the Fed announced a number of measures including TALF, the Term Asset-Backed Securities Loan Facility. TALF was originally created during the 2008 financial crisis. Under this iteration, the Fed will offer investors up to $100 billion in loans to buy high-quality commercial mortgage-backed and other securities beginning June 1. 

TALF once again aims to reopen the business of issuing new bonds and keep money flowing from lenders. 

Asset managers such as SLC are the intermediaries from the Fed’s program to the real economy. They raise money from long-term investors (e.g. pension funds) and...

Allocators kept buying illiquid fixed income assets, even while worrying they’d be tricky to sell in a crisis, new Invesco research found.

“Asset owners were extending allocations to illiquid asset classes late in the cycle. Yet the majority (51 percent) expressed concern around bond market liquidity, uncertain how bond markets would behave during more challenging periods with the introduction of regulations such as Dodd-Frank and the retrenchment of traditional market makers that followed the global financial crisis,” wrote Rob Waldner, chief strategist and head of macro research, in Invesco’s 2020 global fixed income study, released Monday.

The money manager interviewed 159 investment professionals — the vast majority with pension funds, insurers, sovereign wealth funds, and other institutions — right before the Covid-19 crisis onset.  

[II Deep Dive: The Big Risk Lurking in ETF Markets]

“There was a real concern...