The delegates were made up of heads of manager research and due diligence from RIAs, family offices, broker-dealers, wirehouses, private banks, bank trusts and subadvisor selection teams at asset management and insurance firms, all of whom were in town for the two-day event. And what an event it was!
Over the two days, the analysts met with 10 out of a possible 19 portfolio managers across a range of asset classes, heard from keynote speakers and had the opportunity to exchange ideas with one another – and with me!
Starting off at the welcome dinner on Wednesday, I caught up with Carrie Clasen Porter, head of manager research and due diligence at Bank of Oklahoma Financial, and Ted Finlay, director of external manager research at Fifth Third Bank.
Left to right: Laura Lutton, Kathy Blake Carey, Lisa Erickson and me
Finlay told me: ‘We have two things on our radar. Number one is continuing to look at the whole ESG industry and how we can add ESG managers and solutions to our select list and eventually use them in our client portfolios. The second is continuing to look for highly concentrated, high active share managers that are different than your standard market-cap benchmark that we could use as satellites in our portfolios.’
Meanwhile, Porter was more focused on alternative assets. ‘The top items on our research radar are interval funds,’ she told me. ‘We continue to look for alternative investments for our clients. It’s an area of expertise for the firm and we think with the added liquidity of internal funds, it’s an easier way.’
Left to right: Bob Boyda, Aaron Benson, Scott Lavelle, Jared Weiner, Tim Paulin, me, Ted Finlay, Lisa Erickson, Scott Burg, Ray Joseph, John Tennaro, Stephen Beinhacker and Seyi Bucknor
After a morning of roundtable discussions and an opening presentation from behavioral finance expert and psychologist Daniel Crosby on the subject of investors’ biases, I sat down with Suehyun Kim, director of investment research at Cetera, who had a different shopping list for this year. Kim told me: ‘We’re currently looking at flexible income strategies in multi asset, and we’re looking at small caps too, which have been very capacity-constrained, plus international and of course ESG.’
After lunch, we heard from Citywire’s very own head of investment research Frank Talbot about the relationship between manager tenure and outperformance.
Before they jumped back into manager meetings, I caught up with Ben Blaisdell, managing director of investment oversight at US Trust, who spoke about his passive push, and Michael Hohlt from 1st Global, who explained some of his allocation shifts.
Blaisdell said: ‘We’ve been talking about smart beta forever and there’s so much going on in the space right now. I hate to say it, but we have a lot more work to do, so we’re still in the process of really finalizing the ones that we like. We are definitely going to be doing quite a bit of expansion in the ETF space in general over the next year or so. We’ve been working with our colleagues on that team and doing a lot of quantitative work around there and reinventing the research model around ETFs.’
Hohlt said: ‘On our research radar this year, we are looking at instituting an allocation to international small caps. We are also looking at international value managers and then we’re going to look at doing a deep dive on our investment grade fixed income managers.’
The final day of the retreat started in thought-provoking fashion, with a talk from Jamie Bartlett – a journalist and tech blogger who has turned his curiosity to the dark web.
Leaving the presentation thoroughly informed and reminded of the need to change my password from Citywire123, I checked back in with the analysts before they headed to their final workshops, discussing what is keeping them up at night.
Finlay’s biggest worry was geopolitics. ‘I think the geopolitical issues that could potentially pop up and catch the market by surprise are always a concern. I think a lot of the time you can’t even see it coming and it’s hard to prepare for,’ he said.
Porter and Blaisdell were both concerned that investors had become complacent during this extended bull run, leaving portfolios unprepared for a shock.
‘Our clients may hold more [risk] than they are aware of,’ Porter said.
Kim and 1st Global’s Joan Alexandre agreed. ‘I think it’s really about the degree to which volatility has been mostly absent for almost a decade. It’s something that the individual investor is totally unprepared for,’ Alexandre said.
Finally, it wouldn’t be a Citywire event without getting a chance to catch up with a few previous cover stars. Check out the photos that I in no way forced them to take with me!
See you all at our next event in Chicago on June 21 and 22.