Strategic considerations emerging from the global financial crisis and efforts to restore the world’s economy.
The Forum will bring together strategic executives of key financial institutions, including CEOs and CIOs, to discuss the impact of the financial crisis on institutional investment with a focus on illiquid assets.
From discussions led by the World Bank and the OECD, to the World Economic Forum and leading academic institutions, the discussion has almost constant across a broad range of topics. However, there have been fewer targeted discussions addressing discreet challenges. Among those institutional investors with long term horizons and liabilities, such as large pension funds, sovereign wealth funds and government reserve funds, there is an emerging sensibility that these institutions have unique perspectives on the economic crisis that remain unaddressed.
Starting with the discussion of the International Centre for Pension Management (ICPM) and including the Paris Conference on Long Term Value and Economic Stability the unique perspectives of long term investors is starting to be articulated. The Institutional Investors Conference will continue these efforts. Building on the Fall ICPM[i] Discussion Forum and the Buttonwood Gathering[ii], which ends a few days before the Quebec City Conference, the discussion will focus on the question of institutional investment in illiquid assets.
The challenges affecting long term investors are different than those affecting other financial institutions. At the core of the current crisis, governance remains a critical issue. Traditionally, large long term investors such as pension funds and sovereign wealth funds have relied on external managers to manage their assets. However, misalignment of interest, lack of transparency, and excessive emphasis on liquidity events do not properly leverage these institutional investors’ long term horizons and deep pockets. This is the source of major performance questions.
As a result, several institutional investors have begun exploring alternative investment models that make greater use of, and rely more upon, larger and more sophisticated internal teams, captive teams and partnerships with other institutional investors. The present global market turmoil is accelerating this trend and is compelling institutional investors to play a major role in shaping these new models.
Although the long term investors are nominally independent, there is a growing interdependence among them as they start to coordinate their efforts in syndicating large transactions, building off each others’ strengths. This trend has already spawned a new term – "coopetition". With more than $12 trillion in these like minded institutions worldwide, there is an accelerating need for institutional investors to meet and exchange views on strategic issues relating to investments, consolidating relationships and explore possible investment opportunities and long term alliances.
Although several private meetings are being currently organized by institutional investors around the world in various degrees of formality – from ad hoc gatherings to "investors clubs" –, there is presently no international neutral platform available for leading institutional investors to meet with each other in a structured manner to explore these issues.
With its invitation-only format and its in-depth and well informed discussion sessions, the Forum will bring together 15 to 25 senior executives from leading institutional investors around the world to discuss current and future challenges and explore potential collaborations and partnerships.
McKinsey & Company has recently concluded a year long research study involving 25 institutions from 10 countries collectively managing over $4.6 trillion (US) and has produced a report entitled, "The Best Practices and Next Practices of Institutional Investors". Building on the research study and in conjunction with McKinsey & Company the Institutional Investors Forum will discuss the changing views as to investment models and to discuss solutions and potential new partnerships around these issues. Participants will have the opportunity to respond, share their views and propose new approaches.
The Institutional Investors Forum is fully integrated into the Quebec City Conference and institutional investors are encouraged to participate fully. The Public Policy Forum on Venture Capital is held in parallel with the Institutional Investors Forum. The Public Policy Forum on Venture Capital was developed for leading institutional investors, investment managers and government officials from North America, Europe and Asia to share their views, experiences and concerns regarding public policies affecting the private equity / venture capital ecosystem. At the end of the Institutional Investors Forum, there will be a combined session of the two forums to enable the opportunity to share conclusions relating to investment in technology. On 20 October, institutional investors will have an opportunity to communicate their conclusions to the attendees of the Conference.
The Institutional Investors Forum is operated by The Quebec City Conference, a non-profit corporation and supported by the Governments of Canada and Quebec, and by institutional investors such as Caisse de dépôt et placement du Québec, OMERS and Business Development Bank of Canada.
Additional information is on The Quebec City Conference's website at www.QuebecCityConference.com.
Theme: The Financial Crisis and Pension Fund Management: Lessons Learned and Actions Implied
Much has happened since the beginnings of the global financial crisis first emerged in the middle of 2007, and then erupted in full force in late 2008. Pension funds and their stakeholders have not been spared the painful consequences. Fundamental questions are now being asked about how pension funds were managed prior to the crisis, what lessons were learned throughout the crisis, and how those lessons should impact how pension funds should be managed today and tomorrow.
The Discussion Forum will explore these questions with the thought leaders of the global pension management to uncover actionable ideas in four critical ‘success’ dimensions of pension fund management:
Theme: Fixing Finance.
The event will focus on financial reform, restoring trust in the global financial system and the geopolitical implications of the worst crisis in the past 50 years. The Buttonwood Gathering will bring together the foremost thought leaders in the world to debate and discuss what measures should be implemented to restore vigor to the world's economy.
Conference speakers and participants will shape and lead the debate on the future of finance; to discuss efforts to restore trust in the system and chart a path to recovery. Strong risk prevention and a solid framework of regulation that allows for responsible innovation is key to this progress.