CIOs to Speak on Survival of the Fittest, the K-Shaped Recovery, Private Equity, and Private Credit March 16 and 17

The COVID-19 remote environment doesn’t mean you have to stop networking and learning from your peers. In fact, now you can invite your entire investment office to tune into panels where CIOs will be sharing their wisdom on everything from the survival of pension plans to the effects of wealth disparity, private equity, and private credit.

On March 16 at 2 p.m. EDT, top-performing CIOs in private credit and private equity Molly Murphy of the Orange County Employees Retirement System (OCERS) and Michael Donovan of Notre Dame will discuss what they’re seeing in this environment and what opportunities they’re anticipating.

Then, on March 17, we’ll have a full day of panels as part of our “Inside the Minds of CIOs” conference to examine the theme of the K-shaped recovery and the years beyond it. Our economy, with the slowdown of business in travel, entertainment, hospitality, and food services, and the boom in technology, retail, and software services, is bifurcating. Food pantry lines are lengthening as the stock market surges upward. Lower-wage workers are suffering the most, while saving the least. We’ll be exploring the big questions and considering the long and short-range repercussions.

The conference will start at 10:55 a.m. EDT, when CIOs Mansco Perry of the Minnesota State Board of Investment, Carlos Rangel of the W.K. Kellogg Foundation, and Tim Recker of the James Irvine Foundation explore the possible impact of social and economic inequity on the prosperity of the American economy and markets, as well as on retirement funds.

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We’ll have a fireside chat at 12:30 p.m. EDT with special guest economist Dambisa Moyo to discuss the value of the dollar. This discussion will help you discern whether you should tilt toward domestic or international, and why; toward growth or value, and why; and toward small cap vs. large cap, and why.

At 2 p.m. EDT, Melissa Waller, president, AIF Global Institute at Alternative Investments Forum (AIF), will moderate a panel exploring the survival of pension plans in years to come, with a special presentation by CIO Dominic Garcia of the New Mexico Public Employees Retirement Association (PERA) and full discussion with Andrew Palmer, chief investment officer, Maryland State Retirement and Pension System; Clint Coghill, CEO, Backstop; and Shivin Kwatra, head of LDI Portfolio Management – US, Insight Investment.

These are two events, with two different registrations. Invite your whole investment team to register for discussions that will add to your acumen.

Tags: chief investment officer events, Conference, Dr. Dambisa Moyo, K-shaped recovery, Pension Plans, US Dollar

The US Department of Labor (DOL) on Wednesday said it will not enforce two widely disputed final rules on proxy voting and environmental, social, and governance (ESG) investing in retirement plans subject to the Employee Retirement Income Security Act (ERISA).

The federal agency said it plans to revisit those guidelines, which were enacted in the final days of the Trump administration.

The decision comes after an executive order from President Joe Biden, who called on federal agencies to review any existing regulations that go against tackling climate change. Any rules that do not comply with the policy change should be reviewed, the order says.

The DOL is planning to revisit both rules that were highly criticized from stakeholders, who considered the guidelines confusing and restrictive. The two rules at the heart of the matter are called the “Fiduciary Duties Regarding Proxy Voting and Shareholder Rights” and “Financial Factors in Selecting Plan Investments.”

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Last summer, an early iteration of the financial factors rule from then-Labor Secretary Eugene Scalia that was especially restrictive on ESG drew more than 1,100 letters during a 30-day comment period, from asset managers, plan sponsors, service providers, organization groups, and others. Many protested the proposal.

ESG investments have been rising in popularity among investors for several years, but they have also faced pressure from critics who worry that they advance social causes to the detriment of financial returns.

ESG supporters have said seeking good investment returns and promoting ESG precepts are not in conflict, and stakeholders have questioned whether these rulemakings were rushed unnecessarily, saying they failed to adequately consider and address the substantial evidence that ESG considerations improve investment value and long-term investment returns for retirement investors.

In October, the DOL announced a final financial factors rule that eased its stance on ESG investing, arguing sustainability factors could be financially material in some cases for investments.

Unmollified, investor proponents of ESG argued that the rules have already had a “chilling” effect on sustainable investments, even “in circumstances that the rules can be read to explicitly allow,” according to the DOL statement.

“These rules have created a perception that fiduciaries are at risk if they include any environmental, social, and governance factors in the financial evaluation of plan investments, and that they may need to have special justifications for even ordinary exercises of shareholder rights,” Principal Deputy Assistant Secretary for the Employee Benefits Security Administration (EBSA) Ali Khawar said in a statement.

The decision to suspend enforcement of the Trump-era rules did not come as a surprise to fiduciary experts, who said it gives the DOL time to evaluate whether it should attempt new rules.

The DOL’s final rule on proxy voting, released in December, maintained that private plan fiduciaries should refrain from voting on matters that are not financially material to the plan. The department could now go on to issue additional guidance easing the compliance burden for proxy voting and exercising other shareholder rights, according to George Michael Gerstein, co-chair of the fiduciary governance group at law firm Stradley Ronon.

“I would not be surprised to see that,” Gerstein said. “The net effect of it would be perhaps greater willingness of plan fiduciaries to support various shareholder proposals.”

Still, proxy voting will continue to face scrutiny from both the DOL and the Securities and Exchange Commission (SEC). The agencies could review whether some cases are appropriate to vote on, according to Gerstein.

“I think that those concerns are going to remain part of the dialogue,” Gerstein said.

The trend to incorporate ESG factors that are material to investments will also continue among corporate plan fiduciaries, Gerstein said. Wider adoption of sustainable investments will be determined more by their performance in the markets than by language from the federal agency, the attorney said.

“That’s unaffected by any of this,” he said.