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AlternativesJune 11, 2021

Our Expert Panel Will Explore Investing in Alts on Tuesday

FedEx’s Jeff Lewis, Conning’s Richard Sega, and CAIA’s John Bowman will cover the popular asset class in next week’s CIO webinar.

By Larry Light

How and when should institutional investors use alternative investments, known as alts? Chief Investment Officer’s upcoming webinar will explore this key question, at a time when alts are increasing as an asset class in institutional portfolios. You can register for this event here.

Part of our “Allocator Insights” series, the alts session—slated for next Tuesday, June 15, at 2 p.m. Eastern—will delve into what makes the most sense for the long term and what the best strategies are for choosing alts. We’ll also examine and test the viability of various strategies, from hedge funds to private equity, real estate to commodities.

On hand to discuss this fascinating topic are three top-rate panelists: Jeff Lewis, staff vice president of retirement investments for FedEx; Richard Sega, the global chief investment strategist of Conning; and John Bowman, senior managing director for the CAIA Association. Larry Light, CIO’s markets editor, will moderate the talk.

Institutional investors are embracing alts in a major way: 86% of them now have money in alternative investments. What’s more, of those, two-thirds plan to increase their allocations this year.

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That’s the finding of a recent survey of pension, endowment, insurance, and other big investors, as well as consultants, done by Nuveen, the investment manager for TIAA. The catalyst for this trend is the pandemic, the study stated, contending that the “crisis has brought some new approaches to the daily work of investing, including the due diligence process.”

For US pension plans, the share of alts expanded to 27% of portfolios last year, from just 7% in 2001, according to CAIA.

Alts are a diverse bunch, embracing everything from commodities to shopping centers. What are the most popular among the items on the alts buffet? Real estate, cited by 80% of the 700 Nuveen survey respondents, followed by 70% who are invested in private equity and 63% in infrastructure. More than half (55%) of alternatives investors said they plan to make a strategic shift away from public to private markets in the next 12 months.

Allocators are increasingly investing in alts without the use of outside managers. They are buying real estate and taking private equity (PE) stakes themselves, according to the survey, conducted late last year.

State Street Launches Digital Division

The new unit will be led by Nadine Chakar, head of State Street Global Markets.

By Michael Katz

State Street is launching State Street Digital, a new digital division that the financial services firm said will build on its current digital capabilities and expand to include cryptocurrency, central bank digital currency, blockchain, and tokenization.

The new division will be helmed by Nadine Chakar, head of State Street Global Markets, who will report to State Street Chief Operating Officer (COO) Lou Maiuri. Replacing Chakar as head of State Street Global Markets will be Tony Bisegna, global head of portfolio solutions, FX sales and trading, and research for State Street Global Markets. Bisegna will assume the new role Sept. 1.

“The financial industry is transforming to a digital economy, and we see digital assets as one of the most significant forces impacting our industry over the next five years,” Ron O’Hanley, chairman and CEO of State Street Corporation, said in a statement. “Digital assets are quickly becoming integrated into the existing framework of financial services, and it is critical we have the tools in place to provide our clients with solutions for both their traditional investment needs as well as their increased digital needs.”

The company also said it will upgrade its GlobalLink technology platform into a digital multi-asset platform that will be a key part of State Street Digital. The firm’s goal is to grow the platform into a multi-asset platform to support crypto assets, among other asset classes, and to create new liquidity venues for clients and investors.

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In April, State Street was tapped to be the administrator of a planned Bitcoin-backed exchange-traded note initiated by a subsidiary of Iconic Funds, which manages and issues crypto asset index investment products. The note will be listed on the Frankfurt Stock Exchange. And in March, State Street was appointed the fund administrator and transfer agent of the VanEck Bitcoin Trust, a new Bitcoin exchange-traded fund (ETF) that claims to be the first US-listed ETF providing exposure to Bitcoin.

“We have been developing a number of digital capabilities and other solutions, as well as partnering and investing in the infrastructure that forms the foundation of State Street Digital,” Chakar said in a statement. “State Street has a major role to play in the evolution of digital market infrastructure and this new division will help us bring our expertise and resources to the conversation.”