ATP, AXA, AP4 Among aiCIO European Innovation Award Nominees

Barclays, Bernische Pensionskasse, and BT Pension are some of those who have been shortlisted for aiCIO’s inaugural awards for Innovation in Europe.

(February 25, 2013) – The brightest and most forward-looking pension fund investors have made it onto the short list for aiCIO‘s first European Innovation Awards.

Following a two-month nomination period over Christmas, the aiCIO editorial team, along with an Advisory Board of past asset owners and consultants, selected nominees with two central questions in mind: What is innovation, and who is executing on it? Which asset owners are challenging the status quo, succeeding, and have the returns to show for it?

This is the first year that aiCIO will host European Innovation Awards. We have run global awards highlighting investment innovation since 2010. See a list of the nominees for last year’s global asset owner category, click here.

Winners in the European asset management and servicing categories were announced on Friday, and are available here. The winners of the asset owner categories will be announced on May 15 at an awards dinner at London’s Simpsons-in-the Strand, to which all nominees are invited. For more information on the event, click here.

Never miss a story — sign up for CIO newsletters to stay up-to-date on the latest institutional investment industry news. 

Asset Allocation Innovation

– AP4 (SE)

– BT Pension Scheme (UK)

– Pension Corporation (UK)

– RMPI Railpen (UK)

– USS (UK)

Portfolio Construction Innovation

– AXA UK Group Pension Scheme (UK)

– Barclays Pension Fund (UK)

– KLM Pension funds (NL)

– PKA (DK)

– Sampension (DK)

– UWV (NL)

Risk Management Innovation

– ATP (DK)

– Aviva Staff Pension Fund (UK)

– PFZW (NL)

– West Midlands Integrated Transport Authority (UK)

Corporate/Industry Pension Scheme Below €5 Billion

– SAUL (UK)

– DENSO (UK)

– Royal Mail (UK)

– Vervoer (NL)

Corporate/Industry Pension Scheme Above €5 Billion

– ABP (NL)

– Rabobank Pension (NL)

– SPK (SE)

– Tesco Pension Fund (UK)

Public Pension Scheme Below €15 Billion

– Bernische Pensionskasse (CH)

– Environment Agency (UK)

– Lancashire County Council Pension (UK)

– South Yorkshire Pensions Authority (UK)

– Strathclyde Pension Fund (UK)

Public Pension Scheme Above €15 Billion

– ATP (DK)

– PPF (UK)

– VER (FI)

– Norway Government Pension Fund -Global (NO)

CIO/Investment Head of the Year

– Hendrik Gade Jepsen – CIO, ATP (DK)

– Chetan Ghosh – CIO, Centrica (UK)

– Penny Green – CEO, Saul Trustee Company (UK)

– Susanne Haury von Siebenthal – Head of Asset Management/Deputy CEO, Swiss Federal Pension Fund PUBLICA (CH)

– Dame Jane Newell OBE – Chair, John Lewis Partnership Pensions Trust (UK)

– Mike Taylor – CEO, LPFA (UK)

– Japp van Damm – Managing Director for Strategy, PGGM (NL)

Why pay for active when passive can work just as well? That was the message the California pension fund's board got from its strategist Salient Partners at the latest meeting.

(February 25, 2013) – The San Diego County Employees Retirement Association (SDCERA) can boost net returns by swapping some hedge fund holdings for passive index funds, Salient Partners urged during the most recent investment meeting.

Salient serves as the fund’s portfolio strategist, and CIO Lee Partridge, joined by quant Roberto Croce, spent a portion of the two-hour-long education session pitching passive as an asset management strategy.

“A lot of hedge funds in general are just a compensation scheme,” said Roberto Croce, director of quantitative research for the Houston-based asset management firm, to SDCERA’s board. Croce was speaking in reference to the fund’s approach to trend-based strategies, which exploit factors like momentum to glean profit off of popular assets.

Many hedge funds offer access to these strategies, but as Croce said in answer to a board member’s question, the hedge fund path has a downside: “It’s really the fees. Fees, fees, fees. Fees have a very high Sharpe ratio: they are guaranteed. They [hedge funds] are not going to miss any charges. Really, what we wanted to demonstrate here is that a very simple, plain vanilla implementation has a relatively large margin.”

Never miss a story — sign up for CIO newsletters to stay up-to-date on the latest institutional investment industry news. 

Croce and Partridge do have skin in the game: the passive strategy in their comparisons was Salient’s own Pure Trend Index, held against Barclay’s BTOP50 Index and an overall CTA index.

However, going passive in certain pockets of one’s portfolio can be an excellent way to boost net returns, a top Mercer consultant recently told aiCIO. Brian Birnbaum, a Chicago-based partner at the firm, stressed that fees can make all the difference in whether a strategy is profitable or not.

As a consultant, Birnbaum said, “what you want to avoid is having clients buy and pay multiple active manager fees to get exposure or access certain markets. You can do the same thing with index funds.”