Investment Team Research Articles

Investing for Retirement: How Investment Teams of Superannuation Funds Can Support Retirement Income Solutions

Investing for Retirement: How Investment Teams of Superannuation Funds Can Support Retirement Income Solutions

Brand Operation and Economic Analysis in the New Media Eraof Short Video and Live Broadcast

Nowadays, short videos have become more popular, and there are a lot of apps that show videos to others. Short videos will become a major trend in the future, and they currently occupy a large market share. The author aims to analyze the strategies and ways that the companies use to make the videos so popular and increase the market size. The author will use meta-synthesis to do research on the internet and get information from those materials. When people run a short video company, they should create different teams to be responsible for diverse jobs, like the operation team, the shooting team, and the investment team, to make the videos higher quality and more popular. The operations team is mainly responsible for the trend of content traffic. The shooting team is responsible for presenting the content of the script and finalizing the video. Besides, the investment promotion team is mainly responsible for the realization of traffic, so that the team has a strong realization.

Building a Business Case for Hiring Wound, Ostomy, and Continence Nurses.

To describe how one organization built a business case for a wound, ostomy, and continence (WOC) nurse team expansion. The organization is part of a multihospital system; it is an 862-bed, urban, academic medical center with a gastrointestinal surgery program. The director of nursing and the WOC nurse staff worked collaboratively to build a staffing proposal. Finding a lack of published staffing guidelines for WOC nurses, researchers assessed workload and volume growth, benchmarked internal and external staffing, and conducted a market comparison. The proposal demonstrated impact on care outcomes related to a reduction in WOC nurses. Based on the case presented, the Off Budget Investment Team committee was satisfied that additional WOC nurse resources would bring both quality and financial value to the organization by reducing hospital-acquired pressure injury (HAPI) incidence and increasing ostomy consults. Approval of additional full-time equivalents was contingent upon a commitment to reduce year-over-year HAPI incidence and to assess the additional costs of treating a HAPI, specific to this organization. Wound ostomy continence nurses bring value to clinical outcomes that impact patient experience, direct and indirect expenses, rankings, reputation, liability, and pay for performance.

‘Looking for Something that Isn’t There’: A Case Study of an Early Attempt at ESG Integration in Investment Decision Making

The focus of this paper is on the challenges and potentials of ESG integration which are explored through a case study of the use of ESG data in investment analysis and decision making by an equity investment team. Whilst current regulatory efforts place faith in the development of common ESG disclosure standards to resolve ‘impediments’ to ESG integration, our case points to more fundamental discontinuities between financial and ESG accounting inscriptions that question both its feasibility and adequacy. In relation to feasibility, the case points to the ambiguity of ESG issues in terms of their possible value relevance, to how ESG data quantification and aggregation readily occludes its significance, and to the difficulty of attaching a monetary value to ESG data in either an aggregated or disaggregated form. Consideration of ESG issues is then further constrained by the spatial boundary of the ‘entity’ that financial accounting performs, and the short temporal ‘horizon’ of the financial projections of the entity’s future performance that it enables. We conclude that, whilst increasingly attractive to investors, the UNPRI’s limiting of ESG ‘risks’ to those that are potentially ‘financially material’, may itself be creating a false sense of security both for investors and their clients.

Création et évaluation d’un MOOC sur le syndrome confusionnel en oncogériatrie

Among the themes to be addressed by a Massive Open Online Course (MOOC) on geriatric oncology, one of the priorities was delirium, due to its frequency, complications and difficulties encountered by healthcare professionals in diagnosing and managing delirium. Our study aims to evaluate professional practices in the area of education, regarding the evaluation of the content of a MOOC module about delirium syndrome in geriatric oncology. We created a multidisciplinary group to define the scientific content, the pedagogical objectives, the scriptwriting and the development of a training module. The quality of instructional design was then evaluated according to eleven MOOC design principles to promote learning. Participants were studied. Seven of the eleven criteria for evaluating pedagogical quality were documented. Among the 1020 participants, 455 (44.6%) completed the final test concerning delirium: 417 (40.8%) passed the final test; 406 documented their profession and the region of France where they worked: 146 (32%) nurses (confirming the participation of the targeted audience), 103 (22.6%) doctors/pharmacists (illustrating the multi-professional interest of the thematic), with a wide distribution of the participants over the national territory. The multidisciplinary team's investment in developing these teaching materials strengthened the group's cohesion and valuated its professional skills. All teaching resources developed for access via the internet must be accompanied by an evaluation of the quality of the scientific content, objectives and teaching methods, before being able to appreciate its use in the field and assess its real impact on the participants' learning and practice.

The Canadian Pension Fund Model: A Quantitative Portrait

This article presents a quantitative portrait of the Canadian pension fund model. The authors show that, between 2004 and 2018, Canadian pension funds outperformed their international peers in terms of both asset performance and liability hedging. A central factor driving this success is the implementation of a three-pillar business model that consists of (1) managing assets in-house to reduce costs, (2) redeploying resources to internal investment teams for each asset class, and (3) channeling capital toward growth assets that increase portfolio efficiency and hedge liability risks. This model works best for funds whose pension liabilities are indexed to inflation. TOPICS:Pension funds, portfolio theory, risk management, performance measurement Key Findings ▪ From 2004 to 2018, Canada’s pension funds outperformed their peers in terms of investment performance and insurance against liability risks. ▪ The Canadian model is cost efficient, not low cost. Canadian funds reduce costs by managing assets in-house and then redeploy resources by growing their internal capabilities and allocating more capital to strategic assets. ▪ The Canadian model works best for funds whose pension liabilities are indexed to inflation.

Cenland Corporation: The CIO and the Freezing of the DB Plan

It is the afternoon of 15 October 2020 and Dan Woodbridge, 50, CIO of Cenland’s in-house management organization for the Defined Benefit (DB) plan, just finished a Zoom call with Denise Liu, Cenland’s CFO. During this regular update meeting, Dan and Denise reviewed the recently released Q3 reports. Despite a volatile year, Cenland’s well-diversified DB portfolio is again performing well, and better than peers. However, Denise’s big news was that given the “lower-for-longer” market environment, the Board decided to accelerate the de-risking of the DB plan by freezing the plan at the end of 2020. In recent years, Cenland’s CEO has been zealous about reducing pension cost and enhancing the company’s competitiveness. Cenland is a legacy telecommunications company facing intense price pressure from start-up companies that do not sponsor any DB plans. Last year’s decision to close the DB plan was the first step to address this issue. In addition, Dan recalled the CEO recently expressed his annoyance about the volatility in funding DB obligations due to fluctuating equity markets and increasingly lower interest rates, which, in turn, affect the company’s earnings volatility. After the decision to close the DB plan, Dan knew Cenland would at some point take further actions to align the company’s benefits with current industry standards. But, freezing the plan just a year later came as a bit of a shock as firms typically take a few years after closing to make this next step. Denise also asked Dan to start putting together an agenda for the yearly asset allocation review which will be a one-day virtual conference in early December. For this year’s meeting, given the large allocations to illiquid private assets in the DB portfolio, Denise asked Dan to discuss their DB plan’s risk from a cash flow risk perspective (i.e., always having enough cash from pre-defined liquidity sources to meet liquidity demands such as pension benefit payments, GP capital calls, etc.) instead of the traditional volatility risk angle. This is important as a liquid asset and an illiquid asset could have the same volatility, but the cash flow properties of these two assets might be very different.1 In addition, Denise expects Dan to show the tradeoff between liquidity and performance of the DB portfolio under possible alternative asset allocations that are currently under consideration. After rushing into the living room to help his youngest son log in to his algebra class, Dan sat outside with his laptop and home-made coffee. Surveying his backyard, Dan took a moment to enjoy this precious quiet moment and began to reflect on this past year. Dan thought turning 50 would be the year’s biggest event, but he always knew that life is never with a lack of surprises. Since the pandemic in early March, his team switched to remote working mode. He’s been juggling between managing a newly-closed DB plan and helping his three sons keep up with their remote class schedules, especially the little one. Fortunately, his investment team quickly adjusted to the new normal and has been performing as efficiently as before. Dan sent his investment team a Zoom invite for tomorrow afternoon to break the news about freezing the DB plan and to discuss preparing analyses and recommendations for the yearly asset allocation review meeting. Before meeting with his team, Dan spent some time putting his thoughts together and gathering some plan information to facilitate tomorrow’s conversation.

The Canadian Pension Fund Model: A Quantitative Portrait

This paper presents a quantitative portrait of the Canadian pension fund model. The authors show that, between 2004 and 2018, Canadian pension funds outperformed their international peers both in terms of asset performance and liability hedging. A central factor driving this success is the implementation of a three-pillar business model that consists of i) managing assets in-house to reduce costs, ii) redeploying resources to internal investment teams for each asset class, and iii) channeling capital toward growth assets that increase portfolio efficiency and hedge liability risks. This model works best for funds whose pension liabilities are indexed to inflation.

Summit Partners and RoboSoft, LLC: Mezzanine Debt Investment

In February 2013, John Carroll and Alexander Whittemore, both managing directors at Summit Partners (Summit), are considering an investment in RoboSoft, LLC (RoboSoft), a provider of data-center automation, business intelligence, and security software solutions, primarily for the IBM i operating system. Summit had previously invested in RoboSoft, and did well when it exited the company in 2007. Over the ensuing years, Summit had followed RoboSoft and was considering a second investment in the company when it was put up for sale again in late 2012. This time, Summit planned to invest $103.6 million from its growth equity fund and $43.9 million from its subordinated debt fund to buy out the company. This case is designed to introduce students to mezzanine investments. Because the deal involves both an equity and a subordinated debt investment, students can compare the investment considerations and return expectations of both types of investors. The case contains the actual deal team's investment memorandum summarizing the merits of the RoboSoft investment. The students are asked to qualitatively evaluate the potential benefits and risks of the investment from the perspective of a debt investor and an equity investor, and to quantitatively calculate the internal rate of returns (IRRs) and cash-on-cash returns (CoCs) of Summit's equity and subordinated debt fund investments. This case is appropriate for classes that survey private equity investments, or for corporate financing classes that wish to compare the risk and return of equity and debt investments. It is assumed that students have taken valuation courses and understand residual equity cash flow valuation methods. There are Excel files—one for students, one for instructors—to support analysis of this case. Excerpt UVA-F-1845 Rev. Apr. 16, 2020 Summit Partners and RoboSoft, LLC: Mezzanine Debt Investment In late February 2013, John Carroll and Alexander Whittemore, both managing directors of Summit Partners (Summit), were finishing a memorandum to the investment committee (IC) summarizing the merits of an investment in RoboSoft, LLC (RoboSoft) (Exhibit 1). The company was a provider of data-center automation, business intelligence, and security software solutions, primarily for the IBM i operating system (IBM i). As they discussed the situation, Carroll and Whittemore were reminded just how old this technology was. The precursor of the IBM i, the System 34/36/38, was developed in the 1970s, followed by the AS/400 in 1988—all before the internet, PCs, and cell phones became common household items. Although IBM continued to update the series, new operating systems had entered the market (e.g., Unix, Linux, and Windows) and began to erode its market position. The same issue had been a concern when Summit originally invested in RoboSoft in 2005. That investment, however, had worked out well and generated a 5x times; return for Summit's growth equity fund when the business was sold to its current owners, Adison Partners (Adison), in September 2007. In November 2012, Adison engaged Richmond Advisors to begin a new process for selling the company. After selling the business to Adison in 2007, Summit had maintained its relationship with the company and thought highly of the management team. As a result, Summit reviewed the investment again in this sale process and decided to put in a first-round bid for RoboSoft in January 2013. That bid had gotten Summit through the first round, and second-round bids were due in a few days. This time, the firm was contemplating a potential $ 43.9 million investment from its subordinated debt fund and a $ 103.6 million investment from its growth equity fund. Some of the same concerns Summit had faced with its earlier investment—possible obsolescence of the iSeries and RoboSoft's relatively slow organic growth—remained issues now. Additionally, investing money for a second time in the same company was likely to draw special scrutiny from the IC. . . .

Alpha, Beta and the Endowment Model

Alpha, or outperformance of a benchmark, can be generated in many ways within a portfolio. It can be created by picking the top hedge fund managers, or by capturing the illiquidity premium via alternative assets. Venture capital is a major source of alpha for long-term investors. Alpha can also be achieved by active asset allocation using both tactical and strategic beta tilts. For the top endowments, these and other innovative portfolio decisions have created great, long-term alpha versus a global balanced benchmark with 70% stocks/30% bonds. Since asset allocation plays a large role in determining portfolio returns, it is interesting to compare how beta (or index fund) portfolios have compared historically versus sophisticated institutional portfolios. We compare 3 decades of performance: the 10 year period before the Internet Bubble’s peak (FY1988-1998), the 10 years including fiscal year 2000’s spectacular gains (FY1998-2008), and a more recent period (FY2008-2018). The Endowment Model will no doubt continue to help colleges to fulfill their missions, and enable public pensions to meet their retirement obligations. However, for some investors, over-diversification can dilute manager alpha and lead to performance that is similar to beta portfolios. Given its complexity, the Endowment Model is not a one-size-fits-all strategy, and is best suited for larger investment teams with considerable resources. For those institutions constrained by limited resources, using a balance of alternative assets and beta could achieve the best of both worlds. For instance, mid-sized investors might be better served by streamlining their portfolios with a liquid beta core, coupled with satellite alternative assets. And smaller investors could only use index fund portfolios and still achieve alpha. An index fund portfolio may be no substitute for a world-class endowment fund, but it could be an ideal investment solution for some long-term investors.

How Knowledge Management Can Capture Untapped Alpha: A Case Study of Informed Rebalancing at the San Bernardino County Employees’ Retirement Association

Asset owners have to deal with the challenge of a potentially low-yielding investment environment for the foreseeable future and the likelihood of a market correction in the nearer term, with Q4 2018 providing a simple reminder of the downside risk of asset allocation. The traditional approach for many asset owners has been to use external managers to achieve their goals and hope that diversification will allow them to navigate difficult markets. A complementary strategy is to use knowledge management to improve returns and governance and capture a typically untapped alpha source in portfolios. Knowledge management in institutional asset management is defined as the explicit and systematic management of knowledge – and its associated processes of creation, organization, diffusion, use and exploitation – in pursuit of improving portfolio performance and managing risks. This paper highlights how the San Bernardino County Employees’ Retirement Association (SBCERA) used Knowledge Management and InvestTech to develop its own internal investment model to dynamically manage asset allocations and has added over $1billion (over 12 years) through its Informed Rebalancing program. In doing so, the portfolio and risks are better managed by the investment team and the program has survived many staff departures demonstrating that knowledge has been institutionalized. This approach is easily replicable by other asset owners, and each fund can develop its own bespoke approach based on their objectives and abilities.

VENTURE CAPITAL AND CORPORATE INNOVATION INPUT FROM THE PERSPECTIVE OF SYNDICATED INVESTMENT

Using data for 341 enterprises listed on the Growth Enterprise Market (GEM) of the Shenzhen Stock Exchange and taking R&D expenditure as an indicator of innovation investment, this paper implements multiple linear regression to test whether venture capital promotes corporate innovation input. It also considers the relationship between the syndicated investment of venture capital and innovation input. The results showthat venture capital indeed promotes R&D in the invested enterprises. The innovation input of syndicated investment enterprises is significantly higher than that of sole investment enterprises. Under syndicated investment, the higher the number of syndicated investment members and the greater the heterogeneity of the shareholding ratio among the members, the higher is the innovation input. The reputation of the syndicated investment team, however, has no significant impact on innovation input.

Life extension approach focusing on industrial and railway applications

Using its expertise in fatigue analysis, VibraTec has developed an approach to evaluate remaining life aiming to ensure asset durability and optimize operation to extend service life. Remaining life provides visibility of the structure’s future life to anticipate difficulties and guarantee long-term quality of service. Analysis of this parameter is an important part of asset management for structures designed to last for decades, like railway transportation.The approach presented for evaluating remaining life is based on a coupled digital and experimental fatigue analysis. The sensitive areas of the structure under study are firstly determined by Finite Element Analysis according to nominal fatigue loads. The current status of structural mechanical integrity is studied by concentrating nondestructive examinations on sensitive areas (NDT, magnetoscopy, visual observation, etc). Then, operational measurements are performed to identify the real operational loads, to evaluate and tune the Finite Element Model (FEM). Using the final reliable Finite Element Model, the future life of the structure is simulated. Different operation road maps can be evaluated to ensure structural durability and extend asset service life.To conclude the paper, the method is then applied to quantitatively assess the remaining life car bodies for railway networks. Operation and maintenance road maps serve as guides to reach service life objectives. Structural modification can also be evaluated to optimize life duration. This analysis provides support for investment teams, helping them optimize their asset management strategy.

African Bank Investment Ltd (ABIL): a South African corporate governance failure

Subject area The case on ABIL deals with the important issue of corporate governance, and particularly the crucial role that the board of directors plays. It highlights the complex issue institutional investors face when trying to assess the strength of a board and the quality of information and disclosure. The case is set in South Africa which is an emerging market. Study level/applicability The case targets MBA students and can be taught as part of a corporate governance or sustainable and responsible investment module or course. The case is aimed at both local and international students as the case deals with corporate governance principles that are applicable to both audiences. Where necessary, the case provides information to guide international audiences. Case overview The teaching case is set on 6 August 2014 when Ian Matthews, the Head of Equities at a South African Asset Manager, BG Wealth, gets a call while on leave. The call is from his boss, chief investment officer, Deryck Medley, informing him of the negative trading update and asking him to come back to prepare for an emergency investment committee that afternoon. The case traces Matthews’ day as he reviews the research reports BG Wealth had put together on ABIL over the previous 15 months. Matthews also recalls the process the investment team went through internally before finally deciding to invest in the company. The case highlights not only the corporate governance failures of ABIL but also the lack of consideration given to ESG factors by BG Wealth. Expected learning outcomes The case’s primary teaching objective is to highlight the importance of corporate governance. The case provides detailed insights into the area of corporate governance through the analysis of a corporate failure. Through this teaching case, the students will follow the real-life events that led to the collapse of ABIL. It is intended that the students will be forced to deal with a complex situation and will be required to develop specific solutions to the issues raised. Supplementary materials Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes. Subject code CSS 1: Accounting and Finance.

Why Some Perpetual Foundations Aren’t (Perpetual): Observations on the Importance of Inflation Effects on the Economics of Foundations

This article demonstrates the relevance of correctly accounting for inflation to foundation structure and programs – including, for example, in analyzing perpetual versus spend-down strategies and in comparing the cost-effectiveness of programs over different time periods. Investment teams must also be provided with return targets, which are highly sensitive to inflation and which in turn determine a risk estimate that must be considered by foundation fiduciaries.

Investtech and Crowdsourcing Best Ideas: Investment Strategies for a Low-Yield Environment

Asset owners have to deal with the challenge of a potentially low-yielding investment environment for the foreseeable future. The traditional approach to raise the expected return typically leads to increasing allocations to illiquid assets such as private equity, real estate, or infrastructure. However, that method is not suitable to all asset owners. This paper provides a different and complementary approach: leveraging an asset owner’s unique position as a gateway to best ideas and non-traditional, diverse data sets. It demonstrates how assets owners, especially one located close to Silicon Valley, can utilize two key innovations to improve governance, risk management, and potentially expected returns: Crowdsourcing and Investment Technologies (InvestTech). Specifically, the paper shows how asset owners can leverage the best ideas and data sets of their partners (asset managers, banks, custodians, and research firms), and then convert these best ideas into implementable investment decisions. In this specific application, we examine how a limited form of “crowdsourcing” and InvestTech allowed the Office of the Chief Investment Officer of the Regents of the University of California (UC Investments) to develop its own internal investment model to manage asset allocations. In doing so, the portfolio and risks are better managed by the investment team. This approach is easily replicable by other asset owners, and each fund can develop its own bespoke approach based on relationships with vendors and key risks and objectives.

Generating returns through better relationships: How managed custody accounts benefit managers and investors

Institutional investors are under significant pressure to maximise returns. To that end they have focused on reducing fees and consolidating their portfolios according to the best ideas of their best managers. A few pioneering US public pension plans and public university endowments have been early adopters of Managed Custody Accounts (MCAs) in efforts to maximise their ability to participate in the best new products and control costs and fees. An MCA creates a platform through which an investor can quickly and nimbly invest across any of an investment manager’s funds, products and strategies. Because fees and expenses are negotiated at the platform level on an aggregate assets under management basis, parties are able to create an efficient investment process with a fee structure that motivates the manager and investment team, encourages investors to consider all of the manager’s products, and has the effect of maximising the investor’s investment levels with a manager. This efficiency also allows public investors to react quickly to managers’ new products as other legal terms are built into the MCA agreement at the onset of the investment relationship. This paper will discuss the typical investment process of public investors, from manager selection to funding of new traditional products, contrasting it to the MCA process, and highlighting the benefits that MCAs provide to managers and investors alike.

A Study on Determinants of Investment Decisions: A Venture Capitalist’s Perspective

In recent period Indian economy has witnessed multi fold growth as compared to developed economies in the world. Overall growth registered by the Indian economy is the result of MSME sector’s performance and specifically growth in IT and IT enabled services, bio technology, banking and financial services, healthcare and life sciences, manufacturing and retail businesses across the country. Technology driven businesses has attracted the attention of domestic and international investors due to increase in the use of IT enabled services by the majority of population in the country. Use of smartphones and internet penetration has provided ready platform for the sector to take out best of this opportunity. Ecommerce has provided the solution to the problems where the country was stacked since decades. Quality of higher education, entrepreneurial talent, risk taking ability of the younger generation and youth population in the nation has spur the growth of the sector. Information Technology industry has grown exponentially over last few years taking locational advantage of being in operation in cities like Mumbai, Bangalore, Pune, Ahmadabad and Delhi. The important factor which has contributed to the growth of the sector is availability of risk capital in the form of Private Equity and Venture Capital leveraging debt requirement of the venture in start-up phase. PE and VC has played the critical role in the establishment of technology driven businesses in developed countries. Considering the growth of start-up economy, domestic and international PE investors and Venture Capitalists are now looking towards India as world’s fastest growing economy. This research analyses the growth of PE and VC investments in the country for last five years with the help of economic data. Research also highlights determinants affecting investments decision of an investor on the basis of the data collected through interview method from investment team members of Venture Capital and Private Equity Firms. This will help entrepreneurs to understand the prerequisites of raising capital from Venture Capitalists and Private Equity investors.

Integrating ESG into valuation models and investment decisions: the value-driver adjustment approach

ABSTRACTTrue Environmental, Social and Governance issues (ESG) integration means ESG factors are systematically fed into the valuation models and investment decisions of analysts and portfolio managers (PMs). However, most ESG approaches fail to do this. As a result, sustainable investing is much less an application success than a marketing success. Our Value-Driver Adjustment approach is different: it ties into traditional valuation approaches by linking ESG issues to value drivers via their impact on business models and competitive positions. For equities, the initial results find that the average target price impact of ESG factors is 5% overall, and 10% conditional on non-zero adjustments; dispersion is wide as target price changes ranged from −23% to +71%. The investment team has experienced a pay-off in terms of more in-depth analysis of companies, a clearer view on risk and better informed decisions.

Integrating ESG into Valuation Models and Investment Decisions: The Value Driver Adjustment Approach

True ESG integration means ESG factors are systematically fed into the valuation models and investment decisions of analysts and PMs. However, most ESG approaches fail to do this. As a result, sustainable investing is much less an application success than a marketing success. Our Value Driver Adjustment (VDA) approach is different: it ties into traditional valuation approaches by linking ESG issues to value drivers via their impact on business models and competitive positions. For equities, the initial results find that the average target price impact of ESG factors is 5% overall, and 10% conditional on non-zero adjustments; dispersion is wide as target price changes ranged from -23% to 71%. The investment team has experienced a pay-off in terms of more in-depth analysis of companies, a clearer view on risk and better informed decisions.