Pete Drewienkiewicz

Pete Drewienkiewicz, chief investment officer, Global Assets at Redington Ltd, saw the 80-20 rule play out in a large way in April and March when some allocators found themselves shocked by the market, victims of analysis paralysis, or in the fist of inactive board governance.

“We were lucky we were quick and had good relationships with our managers,” said Drewienkiewicz. “March-April was a great example of when it was really important to do something 80% right. If you focused on doing something 100% right, you probably didn’t do anything,” he said.

The fittest were those whose favorite managers could swivel to bring solid opportunities to life. Some found themselves out of luck when their favorite managers weren’t fundraising.

“In some ways, that time period really has acted like a governance accelerator because you’re naturally forced to work with suppliers that you’ve worked collaboratively and collegiately with before, and that you know really well,” said Drewienkiewicz. Those were the relationships that garnered the best results, he said.

Drewienkiewicz was strongly recommended by a respected CIO on the allocator side of the business for his “staggering market savvy” and for being “a great pragmatic thinker—a proper investor.”

He’s now watching the “seeds planted in March” growing. He’s also preparing for the beginning signs of capital-starved areas of the market, where allocators will be able to get a good rate of return. For example, natural catastrophe insurance, which had a number of bad years, is seeing capital outflows this year as people divert money to support their traditional investments, and, after the hurricane season winds down, may become a good opportunity.

“So if you were to see a big hurricane event over the next six weeks that would be even more of a clear reason to take a very, very close look at that market in November, December when you traditionally have to allocate to it,” he said.

Before becoming CIO two years ago, he was the managing director of research at Redington from 2011. He also worked in top director roles at RBC Capital Markets, UBS Investment Bank, and at Barclays Capital. The CIO said intellectual curiosity, spending time with the right people,  and a determination to be intellectually humble and understand the “why” behind the way things are, are important qualities to those seeking to rise the ranks of their career.

CIO: What (actionable thing) have you learned over the course of your career that has proven itself this year?

Drewienkiewicz: When opportunities present themselves, it’s best to invest into a trusted manager with a broad capability in a timely fashion rather than spend months trying to identify the exact best sector or strategy.

CIO: What investments (specific securities or sectors) look good to you now? And why?

Drewienkiewicz: I think right now it’s hard to pick specific securities or sectors—in March and  April it was much easier—I would be more inclined to pick a couple of opportunistic managers you know very well and trust, and give them carte blanche. That said, I still think there are opportunities in the REIT sector where property fundamentals are being misunderstood, if you can do the bottom-up work.

CIO: What ones don’t? And why?

Drewienkiewicz: While I think the “upcoming CLO implosion” has been vastly overblown in the financial media, I wouldn’t want to be overexposed to the junior and equity tranches of these types of leveraged structures while the outlook for corporate defaults remains so uncertain.