THE INTERNATIONAL NEWSPAPER OF MONEY MANAGEMENT | APRIL 1, 2024 | PIONLINE.COM | $16 AN ISSUE / $350 A YEAR
Pension Funds
Large investors embracing total portfolio model Instead of traditional asset allocation, approach tailors investments to fund’s overall portfolio risk and return goals By PALASH GHOSH
The Eddy Awards
2024 winners addressed the diverse challenges to saving for retirement Winning entries showcased creativity in effort to inform and persuade employees By MARGARIDA CORREIA and CARYL ANNE FRANCIA 401(k) serial loan takers. Pre-retirees unaware of the risk of being overly concentrated in equities. Young workers overwhelmed by student loan debt. These are some of the groups that employers attempted to reach through work-
a dignified retirement. place retirement-plan MORE ON THE EDDYS Awards were given in educational campaigns n A list of the 2024 winners five categories: converthat won Eddy Awards can be found on Page 13 sions/403(b) consolidafrom Pensions & Investtions; financial wellness; ments this year. n Highlights from the DC East conference: Page 15 ongoing investment eduAt a ceremony held cation, pre-retirement March 12 in Orlando, Fla., n For the full report, go to preparation and special as part of its annual DePIonline.com/eddys2024 projects. fined Contribution East This year’s top winners looked to adconference, P&I recognized 44 campaigns from employers in the private, public and dress a wide swath of issues, ranging nonprofit sectors and their service pro- from debt reduction to the importance of viders for their verve, creativity and single- naming 401(k) beneficiaries and the benminded focus on helping workers achieve CONTINUED ON PAGE 12
Jayson Carpenter
Money Management
In annual letter, Fink calls for all-in effort to fix retirement By DOUGLAS APPELL BlackRock Chairman and CEO Larry Fink’s latest annual letter to CEOs and clients called for the financial equivalent of a moonshot to avert a looming U.S. retirement crisis. “Maybe once a decade, the U.S. faces a problem so big and urgent that government and corporate leaders stop business as usual. They step out of their silos and sit
around the same table and find a solution,” said Fink in his annual letter, released March 26. “We need to do something similar for the retirement crisis,” Fink said. “America needs an organized, high-level effort to ensure that future generations can live out their final years with dignity,” he added. Fink, whose views on industry trends carry added weight against the backdrop of SEE FINK ON PAGE 24
In the autumn of 2022, John L. Bowman, president of the Chartered Alternative Investment Analyst Association, met in a coffee shop in Singapore with Swee Chiang Chiam, managing director and head of total portfolio policy and allocation at Singapore sovereign wealth fund GIC, to discuss total portfolio approach, an alternative to tra- BETTER FIT: CAIA President ditional forms of strategic John L. Bowman says TPA is asset allocation, or SAA. an improvement over legacy Over coffee, Bowman and forms of strategic asset Chiam discussed how a num- allocation. ber of large institutional asset owners in New Zealand, Canada, Australia and Singapore — including GIC — had embraced total portfolio approach, or TPA, which “improves upon many of the long-entrenched practices of SAA when constructing their portfolios.” That meeting would eventually lead to CAIA creating its seminal report “Innovation Unleashed: The Rise of Total Portfolio Approach” on March 19. Essentially, Bowman noted, TPA eschews the traditional concepts of asset allocation and passive benchmarks in favor of picking the best investment ideas for the portfolio designed to meet a total return goal consistent with the fund’s actual purpose. TPA may be described as “one unified means of assessing | SEE TOTAL ON PAGE 23
FAC E T O FAC E M A R C I E F RO S T
CalPERS CEO talks about private credit, CIO search INTERVIEWED by JENNIFER ABLAN
PRIVATE PARTY: CalPERS CEO Marcie Frost expects private equity to outperform public equity by 150 basis points.
SOUND BITE FIRST EAGLE’S MEHDI MAHMUD:
‘I feel like our firm has turned a corner in terms of managing our flows.’ Page 3
CalPERS CEO Marcie Frost, hailed as one of the most influential women in institutional investing, talked to Pensions & Investments about America’s largest public pension system’s ongoing CIO search and its recent asset allocation increase to private equity and private credit — the darlings of the financial market. The Sacramento-based pension fund has been searching for a new CIO to replace Nicole Musicco, who stepped down at the end of September. An announcement is expected any day now. | CONTINUED ON PAGE 26
P&I takes a deep look at the issues surrounding private markets in a special report. Page 16
Will artificial intelligence take over money management? Not anytime soon, say quants. Page 4