This week's column has been a dream for a relationship manager at Citywire, as instead of having to travel across the country for my meetings, I had the due diligence analysts all in one place for our Professional Buyer West Coast Retreat.
We were joined by 70 heads of manager research and due diligence from RIAs, family offices, broker-dealers, wirehouses, OCIOs, private banks and subadvisor selection teams at asset management and insurance firms.
The event was held at the Four Seasons Beverly Hills Hotel, so along with seeing 70 of my favorite due diligence analysts, I also caught up with Carson Daly (below), Vin Diesel, John Cena and the Terminator himself, Arnold Schwarzenegger! Full disclosure: none of the celebs came to assess portfolio managers – they just happened to be drifting through reception. Although I swear Arnie looked keen to find a new muni strategy. Perhaps next year... he’ll be back.
The professional buyers – the real stars, in my eyes anyway – joined us from across the country to meet with 14 portfolio managers, hear from three keynote speakers and share ideas on manager searches, where they’ve seen flows this year and what’s top of their to-do lists for 2018.
Starting off at the welcome dinner, I caught up with Doug Butler, head of manager research at Rockland Trust, and Aaron Hanson, senior analyst at RBC. Butler told me: ‘This year we’re spending all of our time on global searches. Global infrastructure, global high yield, international value – the back half of the year has been all about non-US.’
Similarly, Hanson has been focused on international bonds, high yield and emerging-market debt and equity.
After a morning of roundtable discussions and an opening presentation from Todd Buchholz, former director of economic policy at the White House, I sat down with Paul Courtney, co-founder and director of research at SpringTide Partners.
Courtney had a different outlook on international searches. ‘I think in a world where spread assets in fixed income are really tight, we think equity valuations in developed markets – especially in the US – are really rich and the low-hanging fruit in emerging markets has already been picked,’ he said.
Courtney is currently spending most of his time looking at real assets and energy-related assets. ‘We’re looking at some business development companies, but essentially we’re getting pushed out into the fringes, which is a little concerning but we do think there are some areas on the margins – frontier markets and real assets – where there is still opportunity,’ he said.
Following a delicious organic lunch (this is California, after all), we heard from journalist and futurist Ben Hammersley on the future of the workplace and the effects of artificial intelligence on our daily lives.
Before he jumped back into more manager meetings, I caught up with Jeff Sutton, head of the consulting group at Oppenheimer Asset Management.
Sutton's time is now dominated by his firm’s recently launched environmental, social and governance (ESG) platform. Oppenheimer launched the platform with two managers, representing four strategies on the separate account side. Sutton is also planning to build out the mutual fund side, as well as adding exchange-traded funds as that market grows.
The final day of the conference started in thought-provoking fashion, with a talk from Andreas Ekström – a writer and journalist who has turned his curiosity toward the influence of Google and whether we should be so trusting of the search-engine giant.
Leaving the presentation thoroughly informed, if a little troubled, by the power of Google, I checked back in with the analysts before they headed to their final workshops, discussing where they’ve seen flows this year.
Oddly enough, Butler said he is still seeing a lot of flows on the fixed income side. ‘People are still de-risking, so we’re seeing a lot of our clients moving their objectives from 70/30 to 55/45 as they get nervous,’ he said.
Hanson and Sutton have both seen flows into large-cap growth funds this year. Hanson also noted flows into income-oriented products in fixed income and equity, while Sutton reported more assets moving into international equities. Sutton hasn’t seen as much in emerging markets, but said that it will probably start coming at precisely the wrong time!
Courtney said he was still seeing money flow into index funds tracking large-cap equities, but warned that this was a bet on momentum.
Finally, it wouldn’t be a Citywire event without getting a chance to catch up with a few previous cover stars. Check out the pictures. I definitely didn’t force them to take them with me! From top to bottom: Tim Clift, chief investment strategist at Envestnet, Greg Maddox, head of global manager research at Wells Fargo Investment Institute, Michael Iachini, head of manager research at Charles Schwab Investment Advisory, and Ray Joseph, head of portfolio management and model solutions at UBS.