Ochoa-Brillembourg to Receive aiCIO Lifetime Achievement Award

(November 18, 2012)-Hilda Ochoa-Brillembourg, ex-World Bank pension chief and founder and CEO of investment outsourcing pioneer Strategic Investment Group, will be the third-ever recipient of aiCIO‘s Lifetime Achievement Award.

The two previous award recipients were NISA Investment Advisor’s Jess Yawitz and Bill Marshall, who both received the award in 2011.

Ochoa-Brillembourg is a well-respected industry stalwart. Her firm, founded in 1987, has a diverse client base: 40% of clients and 60% of assets belong to corporate pension plans, while the remaining 40% of assets come from endowments and foundations, according to Ochoa-Brillembourg.

“We were, in some ways, 20 years early to the trend,” Ochoa-Brillembourg told aiCIO. “The trend has really taken off in the last five years. The reason [for that] is that good, holistic outsourcing really serves clients’ needs, as opposed to simply offering product lines and forcing everyone into the same mold.

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“As a pension or endowment, you want to be an asset manager, not a people manager,” she added. “You shouldn’t necessarily be increasing staff when there are other options.” Ochoa-Brillembourg credited “the end of friendly markets, of easily-maneuverable markets” as one driver of a recent shift towards increased investment-outsourcing uptake.

Beyond being a pioneer in the investment-outsourcing world, however, Ochoa-Brillembourg and her firm are also well known for their long-standing asset manager incubator program. “I’m not sure who did it first, but we started incubating managers while we were still at the World Bank in about 1978/1979,” she said. “It allowed us a first-mover advantage in numerous investment strategies.” And while her initial investment in Ray Dalio’s Bridgewater Associates’ is perhaps the most famous of her incubation projects, “there are many more than that,” she insisted.

“It’s really about the identification of extraordinary human capital,” she added.

Professionally, Ochoa-Brillembourg says she is proudest of “identifying-other than being early into asset classes like hedge funds and portable alpha-that most people manage their portfolio with a downside risk. We manage portfolios with an equal concern for upside potential, and managing that. We make our most money after a market crash while most people are still licking their wounds.”

But the Venezuelan-born Ochoa-Brillembourg insists that she’s far from finished. “I still think I have 15 to 20 years left in my career path,” she insisted. “My father lived very long, and was still working. I hope to emulate him in that way.”

For more information on the aiCIO Awards Dinner in December, click here.

(November 19, 2012) — Investors have moved out of United States equities and corporate bonds of all but the highest quality, as budget questions linger in the world’s largest economy and poor data squeezes Europe and Japan.

Flows out of US equity funds hit $7 billion last week, according to data monitor EPFR, as the dust settled after the country’s election and the so-called Fiscal Cliff came looming back into view.

Overall, redemptions from all equity funds around the world hit their highest level since the week before US Federal Reserve Chairman Ben Bernanke announced the nation’s third round of Quantitative Easing in September.

The only equity funds to receive a boost last week were those investing in Japanese markets, where investors were betting on a surge following the announcement of a general election in an attempt to beat a budget-decision impasse, EPFR said.

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High yield bonds, which had received a shot to the arm earlier in the month, saw mass redemptions from US investors who were wary of taking excessive risk. European investors, on the other hand, ploughed more into the asset class as some newly issued strong government bonds in the region saw yields turn negative this month.

However, over the longer term, research from investment consultant bfinance showed investors are set to move away from developed market economies all the way up the risk scale.

A survey of institutional investors in North America, Europe and the Middle East by the firm showed over the next three years, investors planned to reduce exposure to developed market equities and sovereign bonds to the benefit of emerging market equities, credit, real assets, and alternatives.

Emmanuel Léchère, head of the Market Intelligence Group at bfinance, said: “Beyond diversification, the challenge for many investors is how to best understand and reintroduce risk in a calibrated fashion that recognises different types of risk tailored to different investor profiles, from the least risky to the most risky: investment grade credit, high yield, emerging market debt and finally, equities and alternatives.”

The consultants also found investors were pushing further into alternative assets, but shying away from hedge fund strategies, at least for the short-to-medium term. A net 7% of investors said they would decrease their allocation to this asset class over the next three years.