Embed Size (px)
DESCRIPTION
This edition features our new manager research process including how we have designed it differently to better meet clients’ needs and the 16 preferred lists completed to date. The business news section includes our latest thoughts on fiduciary management, an update on RedSTART and the announcement of partnerships with BNY Mellon and University of Bath. Also in this edition: - Industry feedback and recognition - Round-up of new joiners - Links to our latest thinking - Q&A with Robin Claessens
Citation preview
535MANAGERS
171DETAILED
DUE-DILIGENCE16
PREFEREDLISTS
16
Y O U R Q U A R T E R L Y R O U N D - U Ppage 08
InsideREDINGTON TO STAY INDEPENDENT AND CONFLICT FREE
NEW JOINERS:MEET THE NEW FACES AT REDINGTON
REDSTART, IRIS, LATEST THINKINGAND MORE...
INTRODUCING OUR NEW MANAGER RESEARCH
PROCESS
WHO IS ROBIN CLAESSENS AND WHAT
MAKES HIM TICK?
Welcome to the most important developments related to Redington’s business, people and clients, as well as our latest thinking all in one place.
This edition features our new manager research process including how we have designed it differently to better meet clients’ needs and the 16 preferred lists completed to date. At a time when consultants’ fiduciary mandates are coming under greater scrutiny, we believe there are suitable alternatives which can deliver the same results without giving away the keys. The business news section includes our latest thoughts on fiduciary management, an update on RedSTART and the announcement of partnerships with BNY Mellon and University of Bath.
Last quarter brought with it a number of awards for both the firm and its employees. These are always a reflection of our clients’ successes. We are delighted to be able to share with you highlights from an independent client survey conducted by Greenwich Associates.
The firm has also been busy on the hiring front at both senior and junior levels, with each of our teams growing over the summer. Redington now has 64 employees, including 41 investment professionals with a combined total of over 300 years of investment consulting, actuarial, capital markets and asset management experience.
Also in this newsletter are details of our brand new website and details of our latest thinking. On the back page you will find a Q&A with one of our new hires, Robin Claessens. Robin is a Managing Director in the Investment Consulting team and was previously CEO and CIO of Invensys Pension Scheme.
I hope you enjoy the newsletter and welcome your feedback on the first edition of Redington Post; comments can be sent to [email protected].
With kind regards,
Gurjit Dehl
Dear Reader
DID YOU KNOW? The average pension pot at retirement is £36,800 (Source: Association of British Insurers)
£330BillionCLIENTS’ ASSETSUNDER CONSULTING56 CLIENTS 64 EMPLOYEES
2500
13
HOURS OF FINANCIALEDUCATION DELIVERED
600YOUNG PEOPLE
REACHED
SCHOOLS PARTICIPATINGTO DATE
3CITIES HOSTINGREDSTART DAYS
£330BillionCLIENTS’ ASSETSUNDER CONSULTING56 CLIENTS 64 EMPLOYEES
2500
13
HOURS OF FINANCIALEDUCATION DELIVERED
600YOUNG PEOPLE
REACHED
SCHOOLS PARTICIPATINGTO DATE
3CITIES HOSTINGREDSTART DAYS
RED START
FOR MORE INFORMATION, PLEASE GET IN TOUCH:
General Enquiries & Greenwich Associates’ survey: Alice Cheung [email protected] 020 3326 7103
Manager Research: Pete Drewienkiewicz [email protected] 020 7250 3331
iRIS: Steven Yang [email protected] 020 3326 7118
TEACH-INSProtect Your Assets: Dan Mikulskis [email protected] 3326 7129
Infrastructure Debt: Greg Fedorenko [email protected] 020 7250 3331
Balancing Risk, Return & Contributions: Karen [email protected] 020 3326 7134
CIO Report: Philip Rose [email protected] 020 7250 3331
RedSTART: Freddie Ewer, Jonathan Letham [email protected] 020 7250 3331
Latest thinking: Gurjit Dehl [email protected] 020 3326 7102
Upcoming events: Elena Del [email protected] 7250 3331
DID YOU KNOW? Replicating the average British wage in retirement requires a pension pot of over £300,000 (Source: Which?)
INDIVIDUAL AWARDS AND NOMINATIONS:
CIO’s Knowledge Brokers – Top 25 Most Influential Investment Consultants in the WorldChief Investment Officer (CIO) magazine has published its list of the individuals within the consulting industry who have made a positive impact for their clients. Sourced from interviews with pension and non-profit CIOs, asset managers, and former consultants, it represents their best approximation of the hierarchy of today’s institutional consultant industry. On the list for the third year in a row is Robert Gardner, Redington’s co-founder and co-CEO (#7). The Q+A write-up, including Rob’s most overused phrases, is available here
Financial News’ 40 Under 40 - Rising Stars of Asset ManagementSteven Yang Yu, co-head of ALM & Investment Strategy, is named in this year’s list – see the full list here. Steven joined Redington’s graduate programme in 2007 and it has been a pleasure to see him flourish in his career here – appearing in Financial News’ list is a great acknowledgement of the difference he has made, and continues to make, to clients. Steven joins Dan Mikulskis (co-head of ALM & Investment Strategy) and Pete Drewienkiewicz (Head of Manager Research) who have been recognised on the list in the previous two years.
Actuarial Post’s Actuary of the Year AwardsVoting is now open for Actuarial Post’s awards. We are delighted that Redington’s co-heads of ALM & Investment Strategy have both been shortlisted – Dan Mikulskis for Investment Actuary of the Year and Steven Yang Yu as Pensions Actuary of the Year.
WE COULDN’T DO IT WITHOUT YOU
“ Any award received by Redington is a reflection of our clients’ successes”
FIRM AWARDS:Any award received by Redington is a reflection of clients success. Our success can only be achieved if our clients are achieving their goals. Redington picked up “Consultant of the Year” at Financial News’ Asset Management Awards for the second year running. For the fourth year in a row, Redington won the category “Risk Management Firm of the Year” at European Pensions’ Awards. This follows three “Investment Consultancy of the Year” awards picked up in May - Professional Pensions’ UK Pensions Awards, CIO’s European Innovation Awards and IP Real Estate’s Global Awards.
Steven Yang Yu Dan Mikulskis
REMAINING INDEPENDENT AND CONFLICT-FREE
DID YOU KNOW? 54% of savers surveyed only have a vague idea of when they will retire, 23% have no idea (Source: Alliance Bernstein)
edSTART continues to expand its reach and partnerships to help deliver financial education to young people. The initiative was born as we realised that young people have very low levels of financial literacy,
which we see as an essential life skill especially given the financial responsibility that is increasingly placed on the shoulders of individuals.
RedSTART has partnered with a number of other firms who have committed themselves to delivering financial education using the RedSTART framework. So far RedSTART days are being run by Axa IM, Axa Wealth, BlackRock, Henderson Global Investors, Lombard Odier, Aberdeen AM and Clyde & Co. To date the initiative has reached over 600 young people from 13 different schools in London, Edinburgh and Bristol, and has delivered 2,500 hours of financial education.
FOR FURTHER INFORMATION, PLEASE VISIT HTTP://REDSTARTEDUCATE.ORG/
“It was a really inspirational day and the students were motivated and engaged all day. It was a day that I wish I had received at that age as I clearly remember thinking that the world of money and finance was a daunting prospect that no one took the time to teach.” Chris Connor, Teacher at Helenswood Academy.
RedSTART plants the seed for the financial well-being of young people everywhere
RR
R
edington has teamed up with the University of Bath’s Centre for Governance and Regulation to share
knowledge and resources. The aim is to use Redington’s experience and expertise alongside the centre’s academic researchers to produce more practitioner-based papers. Projects on the radar include the implications of central clearing, quantifying and dealing with longevity risk and evaluating the optimal allocation for Defined Contribution investment strategies.
Ania Zalewska, Professor of Finance and Director of Centre for Governance and Regulation, said: “I am delighted Redington and the Centre for Governance and Regulation, University of Bath, are putting resources together to start this new and exciting research programme.
The development of the pension industry is fundamental for the wellbeing of the society both from the social and the development of financial markets’ perspective. Our research alliance creates a great opportunity for combining multiyear industry experience with research rigor of leading academics in the field. Our research objective is to undertake insightful studies into current issues of the DB and DC pension schemes.”
RESEARCH PARTNERSHIP WITH UNIVERSIT Y OF BATH
A WORLD OF POSSIBILITIES
Clients of BNY Mellon will now be able to benefit from Redington’s comprehensive asset and liability risk reporting service. By partnering on the delivery of iRIS, BNY Mellon’s pension fund clients will be able to monitor both their funding position on a regular basis as well as their level of risk exposure, helping fiduciaries and scheme trustees understand how to meet their current and future liabilities. It also offers analysis of the sensitivity of the scheme’s funding position that may be impacted by changes in the external economic environment.
FOR FURTHER INFORMATION OR A DEMONSTRATION, PLEASE CONTACT [email protected]
edington is an independent and employee-owned investment consultant to pension funds and other long term savings institutions. Our business is structurally aligned with our clients’ long-term success; Redington does not offer fiduciary or fund management services. There are a number
of alternatives which we believe can deliver the same results without giving away the keys. Potentially, some of these alternatives can provide the same benefits but at a lower cost. Redington will continue to focus on providing the highest quality, actionable investment and risk management advice
to institutional investors to leave them in control and confident of reaching their goals. Our thoughts on fiduciary management and its alternatives are laid out in this article for Portfolio Institutional.
CLICK HERE TO SEE FULL STORY
DID YOU KNOW? One-third of babies born in 2013 in the UK are expected to celebrate their 100th birthday (Source: Ready for Ageing Alliance)
Each year Greenwich Associates run an independent and anonymous survey to gain clients’ feedback on their consultants. This survey is a great way to understand the value delivered for clients and also highlights areas in which improvements can be made.
Redington clients rate us most highly in the following 4 areas relative to other consultancies: Communication of our philosophy and investment beliefs
Understanding our clients’ goals and objectives
Advice on long-term asset allocation and liability related issues
Usefulness of personal meetings
IF YOU WOULD LIKE TO PARTICIPATE IN NEXT YEAR’S SURVEY, PLEASE CONTACT [email protected] FOR FURTHER DETAILS.
THE RESULTS ARE NOW IN
[1] Robin Claessens joins the investment consulting team from BBOXX Ltd where he was CFO. Prior to this, Robin was CEO and CIO of Invensys Pension Scheme. As CIO, he designed and executed a three-step plan to upgrade the scheme’s investments and risk management capabilities. He is a member of the Milken Institute Young Leaders’ Circle. An interview with Robin is featured in this newsletter.
Also joining the consulting team is [2] Nick Lewis. Nick was previously part of the investment consultancy at Aon Hewitt and is a CFA charterholder.
[3] Harriet Ellis is Redington’s new head of Human Resources. She has 18 years’ experience in Human Resources and previously worked for VTB Capital and ING Wholesale Bank.
The ALM & Investment Strategy team has also been hiring – [4] Dermot Dorgan previously spent two and a half years as an investment consultant at KPMG Pensions and [5] Melanie Hah is building upon her experience as a trainee actuarial consultant at Milliman’s life practice.
We would also like to welcome our new graduate intake – [6] Tom Pilcher (Investment Consulting), [7] Aaron Kok and Jiaxi Yang (ALM & Investment Strategy), [8] Keir Macdonald (Manager Research).
It’s been a busy summer for new joiners and we are delighted to welcome the following to the Redington team:
REDINGTON.CO.UK GETS A FACELIFT We are excited to launch a brand new website, providing easier access to content and optimal performance across mobile devices. New content has also been added, including a range of client case studies and an update on Redington’s story and approach. A huge thanks to The Creative Arms for the design and Webstars Ltd for the build. Click the image to view the new site. Please do take a look and let us know what you think!
WELCOME!
[1] [2]
[3]
[5]
[7]
[4]
[6]
[8]
I N D U S T RYFEEDBACK
DID YOU KNOW? By 2028 the UK population is expected to reach 70 million before touching 80 million by 2062 (Source: ILC-UK)
edington has introduced a new Preferred List Manager Research Process. We now utilise our 10 screening criteria to allow us to reduce the vast universe and focus on spending our time meeting the best
managers. Our research meetings are centred on identifying a small number of high conviction managers. Managers who demonstrate competitive advantages in 10 key areas are awarded one of the following ratings:
Preferred Manager Retained Manager One to Watch
Preferred and Retained managers are then monitored against relevant Red Radar points. Red Radar is to ensure that clients can proactively engage with or transition away from inappropriate managers in plenty of time.
Since the inception of the Preferred List Process in October 2013, we have researched 535 asset managers across 16 different asset classes, carried out detailed due diligence on 171 managers and assigned Preferred status to just 44.
In addition to in-depth analysis for the Preferred List process, the team meets with managers involved in bespoke client work as well as those with fresh strategies which are potentially suitable for client portfolios. In total, the research team conduct over 600 face-to-face meetings each year.
R
TRIPLE FILTERED FOR HIGH CONVICTION
MANAGER RESEARCH
535MANAGERSRESEARCHED
171DETAILED
DUE-DILIGENCE16 PREFERRED
LISTSPREFERREDMANAGERS
We have now completed Preferred Lists in the following asset classes:
Sterling Credit Diversified Growth FundsInfrastructure DebtCommercial Real Estate DebtAbsolute Return BondsLong LeasesGlobal CreditRisk ParityCredit Relative ValueStyle PremiaInsurance-linked SecuritiesPrivate PlacementsMid-Market Direct LendingMulti-Class CreditCommodity Trading Advisors or “Trend Following” Segregated Liability Driven Investing
16
HOW IT WORKS AND WHY CLIENTS BENEFIT
DID YOU KNOW? One-third of babies born in 2013 in the UK are expected to celebrate their 100th birthday (Source: Ready for Ageing Alliance)
“ We now utilise our 10 screening criteria to allow us to reduce the vast universe and focus on spending our time meeting the best managers.”
Pete Drewienkiewicz Head of Manager Research
Last Quarter’s Latest Thinking
PUBLICATIONS:
CIO Report – Investing in a World without Credit Spreads
A Decade of Credit – How Should Today’s Investors Allocate to Credit?
Risk-Adjusted Return – Quarterly Update, Q3 2014
BLOGS:
3 ways to protect a portfolio against downside risks READ NOW
Mitigating the danger of backtesting in style premia PART 1 PART 2
Putting you on the helm of your LDI portfolio PART 1 PART 2 PART 3
What do rising rates mean for UK pension funds? PART 1 PART 2 PART 3
The pension revolution gathers momentum READ NOW
What questions should I ask my advisers about longevity? READ NOW
Absolute(ly No) Return Bond funds READ NOW
PRESS COVERAGE:
Alternatives to fiduciary management: opening up the debate (Portfolio Institutional) READ NOW
Finding value in a market of strong performers (Professional Pensions) READ NOW
How Rate Increases Could Push Liabilities Higher (Chief Investment Officer) READ NOW
TEACH-IN PRESENTATIONS:
Protect Your Assets Equity Downside Hedging READ NOW
Revisiting Infrastructure Does it Still Make Sense for Pension Scheme Investment? (Redington, Squire Patton Boggs) READ NOW
Balancing Risk, Return and Sponsor Contributions An integrated Approach to Investment and Funding READ NOW
3. Preferred Manager Status
2. Detailed Due Diligence1 Managers Researched
4. Preferred Lists
How it works:We request and analyse Due Diligence Questionnaire and Request For Information responses from a wide range of identified managers before assessing them using our 10 proprietary screening factors. This allows us to focus our intensive due diligence on a much smaller number of firms.
Why it benefits clients:This step allows us to assess a manager’s proposition in the context of its peer group and review it in a balanced fashion. We believe this is preferable to using broad blanket screening factors, such as Assets Under Management or performance-only screens.
How it works:A small number of managers who most clearly demonstrate their excellence against our proprietary list of 10 competitive advantages will be rated “Preferred” and recommended to clients. Why it benefits clients:High conviction allows us to spend more time with just a few, truly exceptional managers and to monitor them with high intensity. This allows clients to spend their precious governance budget where it can add most value.
How it works:Each strategy assigned an Allocate or Maintain rating by Redington’s Investment Committee will have a list populated with high conviction Preferred or Retained managers. These lists are approved by the Investment Committee and formally reviewed every 6 months. Why it benefits clients:Having a ready-made Preferred List for each asset class improves governance, allowing clients to move quickly to implement new investment allocations rather than wasting scarce time on beauty parades and overblown research processes.
How it works:Having digested and analysed all information provided to us, we hold intensive face-to-face due diligence meetings with each universe of screened managers within a tight two week period. These meetings involve focusing on key elements and digging into their portfolios. Why it benefits clients:Meeting the whole universe of managers for a particular asset class within a two week period allows us to assess managers intensively and within context. Clients benefit from an enhanced peer review process as strategies are less likely to change in such a short timeframe.
535MANAGERSRESEARCHED
PREFERREDMANAGERS
16 PREFERREDLISTS
171DETAILED
DUE-DILIGENCE
Nature or Nurture: which has the biggest influence on successful outcomes? Nurture! Practice, practice, practice. And if Nature was generous with you and gave you a better start than others, practice even harder! It would be such a waste otherwise.
How do you spend your time away from the office? As much as possible outdoors and enjoying my free time with my daughter.
What is your favourite book or quote? I am currently reading Eric Schmidt’s and Jonathan Rosenberg’s “How Google works” – can’t put it down!
DID YOU KNOW? 41% of non-retired people opted for the default option when they reviewed their pension plans (Source: Baring Asset Management)
Which achievement (professional or personal) are you most proud of? Being able to flip my first crepe at the age of 6.
What has been the biggest disappointment, and what did you learn? Not having been able to balance my personal and professional lives during an important period of my life. I have learnt that a balanced professional and personal life is a key factor for a successful career.
As a child, what did you want to be when you grew up? Deep sea diver.
Who do or did you most look up to? Life is not a straight line journey and one experiences different feelings and needs at different stages of one’s life. I have therefore looked up and sought advice from many persons over time, starting with my father when I was a schoolboy.
What is the best piece of advice you have ever received?
Count to seven before answering any question.
I read somewhere that Rupert Murdoch counts up to 20.
ROBINCLAESSENS
Former pension fund CEO and CIO, Robin is our new Managing Director in Investment Consulting. We decided to find out what makes him tick and his greatest ambition at Redington.
(Below) Vintage deep sea attire donned by divers in the early 60s, Mahatma Gandhi who was assinated in 1948 at the age of 78 years old
(Bottom Left) Rupert Murdoch ponders another tricky question
If you could visit yourself 20 years ago, what advice would you share?
I would use a quote by Gandhi, which resonates a lot with me: “There is more to life than
increasing its speed”.
What are you most looking forward to in your role at Redington?
Having worked on the pension fund side for a number of years, I am most looking
forward to experiencing the satisfaction from Trustee Boards of creating value for
their members.
...14 ...15 ...16
