CFA Institute Systemic Risk Council Adds 3 New Members

The CFA Institute’s Systemic Risk Council announced it has added three members—Elke König of Germany, René Karsenti of France and Christina Romer from the U.S.—bringing its total number to 19.

The Systemic Risk Council consists of experts committed to addressing regulatory issues in global systemic risk and engages with policymakers around the world—primarily in Europe and the U.S.—to ensure and preserve a stable financial system. The council advocates for policy and regulatory reform to protect the public from financial instability.

For example, in August, the Systemic Risk Council wrote to U.S. Secretary of the Treasury Janet Yellen to express concern that non-bank financial institutions and their activities could enable financial vulnerability and endanger global stability.

“We are thrilled to add these three very talented and experienced people to the Systemic Risk Council, broadening our European representation and adding further international perspective to our council discussions,” Erkki Liikanen, co-chair of the Systemic Risk Council, said in a statement.

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König is a German auditor who was president of the Federal Financial Supervisory Authority from 2012 to 2015. From 2015 to 2022, she was the first chair of the Single Resolution Board of the Single Resolution Mechanism, an EU banking agency. Having earned a doctorate in political science, she worked in the financial and insurance sectors at firms like KMPG; Munich Re Group, where she was the head of accounting; and Hannover Ruckversicherung AG, where she was chief financial officer. König was also a member of the International Accounting Standards Board in London.

Karsenti is a senior adviser to the International Capital Market Association, a global trade organization for financial institutions. Prior to joining the ICMA in 2006, Karsenti was a director general of finance at the European Investment Bank in Luxembourg. Karsenti also served as treasurer of the European Bank for Reconstruction and Development in London between 1991 and 1995. Karsenti also held various roles in treasury organizations within the World Bank Group.

Romer is an economic history and macroeconomics professor at the University of California, Berkeley, and a research associate at the National Bureau of Economic Research. Romer served as chair of the U.S. Council of Economic Advisers from 2009 to 2010.

Tags: CFA Institute, CFA Institute Systemic Risk Council, Christina Romer, Elke Konig, Rene Karsenti

Institutional investors are increasingly attracted to renewable energy and other kinds of sustainable endeavors—and feel private assets are a good way to invest in them, according to a survey by London-based asset manager Schroders PLC.

Over the next two years, two-thirds of allocator believe private assets—private equity, private credit and real estate—offer the best opportunities to get involved in energy transition. As a result, 35% of them plan to increase allocations to private assets over the next two years.

Why private assets? The survey, of 770 allocators worldwide holding a combined $34.7 trillion, found that a majority (65%) said this asset category “delivers a deeper source of diversification over the next two years.”

To be sure, this sentiment runs counter to a diminished appetite for private equity and real estate lately among some institutions, mainly due to a stalled mergers and acquisitions field and weaknesses in some parts of commercial property, notably offices. Plus, higher interest rates have spurred the allure of publicly traded bonds and money markets. This creates a liquidity problem: Private assets usually tie up investments for long periods, so the capital in them cannot be tapped for other opportunities or obligations.

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In terms of investing in private assets for renewables, however, the Schroder’s respondents displayed no such qualms. Among investment types, developed market equities was the top choice (31%) for investing in renewables and decarbonization over the next two to three years, while private equity tied with commodities for second place at 24%.

In fact, the push into private assets results will increase over the next two years, the survey reported. Right now, private equity plays a major role in delivering sustainability for 39% of respondents, with 50% saying it has a minor role and 11% no role.

In two years, PE’s status as performing a major role will expand to 48%, outranking the other two grades, the survey stated. The survey projected the same for private credit’s standing as occupying a major role, moving to 33% from 27%; and real estate, rising to 38% from 25%.

These results, of course, come during a time of concern about inflation and geopolitical turmoil, the study noted.

Despite the caution that these worries generate, Nils Rode, CIO of Schroders Capital (the company’s private markets investment division), commented in a statement that the survey shows “many investors continue to be drawn to private assets as a means to engage with the evolving macroeconomic landscape, as well as to add resilience to portfolios.”