On Thursday, May 10, 2018, CFAW was pleased to welcome four speakers to a panel discussion on Alternative investments and their role in various investment portfolios. Introduced by Stuart Cohen of The World Bank, the panel members included:
- Maria Kozloski, CFA - Global Head & CIO, Private Equity Funds, IFC
- Peter Chiappinelli, CFA - Portfolio Strategist, GMO Asset Allocation Team
- Flora Li Hedrick, CFA - Managing Director of Investments, ICMA – RC,
- Tatiana Chkourenko, CFA - Senior Investment Manager at IFC Asset Management Company (serving as moderator)
For the purpose of the panel discussion, Alternative investments were classified as follows: Private Equity, Hedge Funds, Venture Capital, Commodities, and Real Estate. The diverse nature of the investment funds and programs represented by the respective panel members made for a deep and wide-ranging discussion on Alts as an asset class.
When asked about the challenges of investing in Alts, particular note was made of the difficulties associated with reliable benchmarking. Also of note, with regard to direct private investment in Emerging Markets was the lack of robust data sets for comparable investments. In terms of trends that panel participants were seeing in the Alts marketplace, the increasing size of funds and the possible effect on prospective returns was mentioned. Also discussed was an increase in co-investments, the concentration of investment opportunities in certain sectors, the effects of public market valuations on the prospective returns available to Alts investors, and backward-looking performance comparisons of funds composed of more traditional public asset mixes to those containing allocations to alternatives.
Left to right: Maria Kozloski, Tatiana Chkourenko; Flora Li Hedrick; Peter Chiappinelli
Speaking specifically about Venture Capital as an asset class, topics discussed included access to top-tier managers for new entrants to the space; the effects of technology expanding the opportunity set for investment outside of traditional marketplaces; and the effect of many large companies acquiring technological advancement through marketplace acquisitions instead of funding traditional R&D budgets. The final topic discussed was the increasing focus by funds and sponsors on ESG factors and the implications for various panel members' investment programs. The discussion was followed by a brief Q&A period before concluding the event.