The Journal Vol 4. Chapter 2
The Journal Vol 4. Chapter 2
Important Information

Chapter 1 revisited

Chapter 1 revisited

Chapter 1 revisited

Retooling investors for an age of uncertainty

Hendrik du Toit, Chief Executive Officer, Investec Asset Management

Will humanity end poverty and our destructive impact on the natural environmental in the twenty-first century, while maintaining peace? These are the big challenges of our generation. We have the potential to harness the power of our multipolar, multicultural and interconnected world to establish a platform for the sustainable development for the planet and its people. Why then refer to an “age of uncertainty”? This piece focuses on how we, as owners and stewards of capital, can help mitigate this cycle of volatility and stagnation.

Overcoming failures in long-term savings and investment: the lessons of the UK

Ian Goldin, Director of the Oxford Martin School and Professor of Globalisation and Development at the University of Oxford
Ashok Gupta, Chair of the PLSA Defined Benefits Taskforce

Has the flood of financial regulation made investors’ money safer? Enhanced oversight sought to make financial markets more stable and provide frameworks for long-term investors – like insurance companies and pension funds – to generate returns consistent with their liabilities. But when we contributed to a 2014 discussion paper by the Bank of England, we found that the recent regulatory drive, combined with and industry practices, helped destabilise UK markets and undermined these investors’ ability to meet their mandates.

The Investor’s View: Adrian Orr, Chairman, International Forum of Sovereign Wealth Funds; Chief Executive Officer, New Zealand Superannuation Fund

In April 2016, The Investment Institute spoke to Adrian Orr, Chairman of the International Forum of Sovereign Wealth Funds and the chief executive officer, New Zealand Superannuation Fund, about the challenges of allocating capital for the long term. They discussed stakeholder engagement, counter-cyclical investment strategies and how the relationships between investors and their managers are changing. They also discussed the opportunities presented to long-term investors by the current global imperative for sustainable development and the difficulties sovereign wealth funds face in an era of low oil prices, and how these might affect how they allocate capital.

Profiting from long-term value creation in the equity markets

Clyde Rossouw and Simon Brazier, Co-Heads of Quality, Investec Asset Management

In 2015 many of the world’s stock markets became volatile, causing many institutional investors to either allocate away from equities into bonds to assuage losses or to adopt risk-reducing passive strategies. However, these may not necessarily be the best options for long-term investors? By identifying companies with strong business models, brands and astute management that make good investment decisions, Clyde and Simon discuss how stock pickers can develop strategies that harness the compounding effects of long-term value creation, while dampening the portfolio’s volatility.

Resilience in an age of uncertainty

The views expressed are as at the date of publication and may no longer be current.

General risks

Past performance is not a reliable indicator of future results. The value of investments, and any income generated from them, can go down as well as up; losses may be made.

Specific risks

Equity investment: Value of equities (e.g. shares) and equity-related investments may vary according to company profits and future prospects as well as more general market factors. In the event of a company default (e.g. bankruptcy), the owners of their equity rank last in terms of any financial payment from that company.

The content of this journal is intended for professional investors and those with a sophisticated knowledge of financial markets (e.g. financial journalists, academics etc.) and should not be relied upon by anyone else.

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