Finance
IE's FMD
Building Ecosystem
Renewables financing
Initiatives with Multilateral Org
Signed MOU with World Bank to do pre-bid conference
First right of refusal to projects
Need deal flows otherwise funds will do it out of London
2018: social impact funds, trade finance etc
Foreign Gov Money
Asset Mgmt
Trends
Lower future returns (Decline from 25-40%)
Fund-raising more difficult
Aging western societies draw down on investments
Younger workers have lower savings
Retirement schemes also shrinking
More people working longer
Tax incentives seen as favouring wealthy reduced
Expanding to emerging markets not working
Asia which makes majority faces similar demographic challenges
70% of private wealth from NAE + Japan
Emerging-market investors favour domestic managers due to concerns about US and European regulations used to block, trace and freeze funds
Lower returns on asset classes, less attractive to investors # N.B. Globally, rising asset values are responsible for around half of all increases in AUM
Correlations btw assets more uncertain/don't fluctuate in ways consistent with fundamental drivers/trends
Cheap stocks don't outperform expensive
Stocks with stronger finances don't always outperform weaker ones
Struggling to find alternatives that are as liquid as what financiers (esp trade and liquid financial securities) require
Others lack scale (and EOS)
Managers don't have skills required for some
Exacerbated by markets distorted by government interventions
Low rates and central bank asset purchases boosted prices limiting asset choices and reduced trading liquidity??? For real??? To ask expert.
How to improve?
Focus on absolute returns instead of relative to market indices
Allow unrestrained allocation between asset classes (dynamic portfolio allocation), and allow for asset classes with different liquidity profiles
Use active trading, use if derivatives or structured products and leverage
Incorporate long lock-up periods to reduce redemption risk
Industry bifurcates into large index-fund mgrs and small, specialised managers. Inability to change will mean increasing irrelevance