Podcast: Critical thinking, critical issues

In this episode, Mercer colleagues and special guest Urs Bolt,  Product Manager in Digital Banking and Wealth Management, come together to discuss the key findings from the 2022 global wealth management investment survey as well as the possible action points to help wealth managers around the world take the next step on their client and growth journey.

Opinions expressed are those of the speakers as of the date of publication, are subject to change without notice and do not necessarily reflect Mercer’s opinions.

Read the survey findings here

Inge West, Sustainable Investment Specialist in Mercer’s Investment Solutions team is joined by Helga Birgden, Global Chair on Sustainable Investment at Mercer and John Green, Global Chief Commercial Officer of Ninety One, to explore how asset managers are supporting the climate transition and gain practical insights on how global capital can be harnessed to target local climate challenges.

We recorded this episode as a part of a podcast series on the occasion of COP27. Each episode illustrates the breadth and depth of Marsh McLennan’s climate capabilities. The issues addressed throughout the series include investment transition, the insurance sector’s role in climate adaption, communities and businesses’ exposure to physical risks, and how companies need to address the inextricable link between climate and nature.

Max Messervy Head of Sustainable Investment, Americas is joined by Rich Nuzum, Executive Director, Investments, Global Chief Investment Strategist and Cara Williams, Global Head of ESG and Sustainability, Wealth Management and Multinational Client Lead for Wealth to reflect on what inspired them most at COP27. They also share the key themes that emerged while in Egypt and the lessons that institutional investors should take away following the outcomes at COP27.

We recorded this episode as a part of a podcast series on the occasion of COP27. Each episode illustrates the breadth and depth of Marsh McLennan’s climate capabilities. The issues addressed throughout the series include investment transition, the insurance sector’s role in climate adaption, communities and businesses’ exposure to physical risks, and how companies need to address the inextricable link between climate and nature.

Read the survey findings here

As 2022 comes to a close, insurance companies are facing significant price losses across their portfolios, particularly within long-duration fixed income. On the horizon are the risks of a global recession, peaking fundamentals, persistent inflation and energy crises, particularly in Europe.

We recently surveyed the insurance market globally to find out what their key concerns, challenges and opportunities are within their investment portfolios and how they plan to tackle these. With these findings in mind we have produced what we believe should be the top considerations for insurers in 2023.

To discuss the findings and the considerations, Colin Tipping, Global Head of Insurance Solutions is joined by Eryn Bacewich from the US team and William Gibbons from the UK/Europe team.

Where are we now as we reach the end of 2022? Economies have overheated and have begun slowing down, with some potentially in recession already. Are we there yet? Will monetary tightening lead to a deep recession?

Samantha Davidson US OCIO Leader is joined by Rupert Watson, Head of Asset Allocation, Europe and Anthony Brown, Director of Capital markets in the US at Mercer to explore. 

2022 will certainly be remembered as momentous, and it may take some time to fully understand the ramifications of the events that occurred this year. Any of these events individually would likely have had a profound impact on markets, both public and private. However, in combination, these events, along with other relevant factors, have certainly pulled the rug out from under markets.

Billy Charlton, Global Head of Private Markets Data Analytics and Research is joined by Amarik Ubhi, Global Head of Infrastructure and David Scopelliti, Global Head of Private Debt to discuss how these significant events are affecting various private market segments and what we expect their ramifications to be in 2023.

2022 brought a combination of interconnected challenges for all investors including endowments and foundations, from geopolitical conflicts to high inflation, supply chain problems to financial market volatility.

In this episode, Cori Trautvetter is joined by Gilles Lavoie and Gareth Donegan to explore what we believe are the top considerations for endowments and foundations in 2023. They also explore the approaches that could support endowments and foundations in navigating through them to achieve long-term success, while managing short-term disruptions.

The past decade was one of the best on record for traditional 60/40 portfolios, but a sharp rise in macroeconomic volatility caused this period of success to come to an abrupt halt.

To explore what effect this has had on financial intermediaries globally, Conor Power is joined by Gregg Sommer and Adeline Tan as they also discuss what we believe are the top considerations for financial intermediaries as we transition into 2023.

This episode seeks to provide an overview of the insurance industry’s role in advancing climate resilience, with a particular focus on de-risking, funding and incentivizing ex-ante pre-event climate risk reduction and adaptation measures. It also explores the exciting new initiative being pursued by the United Nations’ Race to Resilience unit to accelerate and scale those efforts.

Leading the discussion is Francis Bouchard, the Managing Director for Climate for Marsh McLennan’s Advantage unit, who is joined by Dr. Swenja Surminski, Managing Director, Climate, Marsh McLennan – and a long-time Peruvian climate negotiator and UN Resilience Hub official Jorge Gastelumendi.

We have seen significant upheaval in global markets in the last twelve months, with a combination of the pandemic recovery, regional conflict, supply chain challenges and technological advancements having a profound impact on the world around us.

The impact of these events are similar to recent history, and allows us to draw on these experiences and adapt portfolios to the current landscape.

In this episode, Jo Holden, Global Head of Investment Research speaks with Nick White, Global Strategic Research Director and Matt Scott, Senior Investment Research Specialist, on the themes and opportunities we believe investors should consider in their decision-making in 2023 and beyond.

The blocking of the Suez Canal in May, 2021 demonstrated the vulnerability of global supply chains to disruptions to the world’s, canals and waterways. The just in time nature of shipping means that there is limited redundancy, and these kinds of routes become pressure points for cascading risk. With increasing incidents of disruptive weather events driven by climate change, greater focus needs to be given to understanding these potential critical points of failure.
 

Nicholas Faull, Head of Climate and Sustainability, Risk and Innovation at Marsh is joined by colleagues Dr. Bev. Adams, Head of Climate and Catastrophe Resilience based in the UK and Scott Williams, ESG Coordinating Director for the Middle Eastern Africa region to explore the importance of this case study.

Wealth managers face a combination of issues as global markets enter yet another period of uncertainty while their clients demand sustainable returns – so how are they meeting these challenges?

In this episode, Mercer colleagues and special guests joined us to discuss the findings from the 2022 global wealth management investment survey as well as the possible action points to help wealth managers around the world take the next step on their client and growth journey.

Evolution is change, and while change might be continuous, its pace may vary over time. The private markets investment landscape has certainly changed over the years since its beginning in the 1940s and has grown to become a ten trillion US dollar industry. 

To discuss the evolution we have seen over the years Zeenat Patel is joined by Claudia Zeisberger, professor of entrepreneurship and family enterprise at INSEAD and founder of the Global Private Equity Initiative and Billy Charlton, Mercer’s global head of private markets, analytics and research .

Register to hear more from Claudia and Billy at the Mercer annual Alternatives Conference here

In this episode, Marg Franklin, President and CEO of the CFA Institute unpacks the 2022 Mercer CFA Institute Global Pension Index with lead author David Knox, a Senior Partner at Mercer.

Throughout, they explore the results of year’s index and discuss the significant challenges and important changes to the pension industry in the last year. 

The fear of recession is dominating everyone’s mind-set at the moment. The global economy has been slowing and is likely to continue to do so on the back of high commodity prices, rising interest rates and tightening financial conditions more or less everywhere with China being the notable exception.

Central Banks are thought to have underestimated inflation expectations and are increasing rates quite aggressively. Where they are facing an economic cycle that differs from the past, will they get it right and what’s the cost if they don’t?

We canvassed the opinions and intentions of not-for-profit investors from around the world on a range of subjects, including sustainability, macro challenges reflected in the sector, the increase in allocation to private markets and the evolution towards seeking third party assistance to help them overcome challenges and achieve the objectives of their not for profit organisation.

Throughout this episode we will be joined by Mercer colleagues and special guests to discuss these 4 key considerations that were highlighted within the report as well as the range of possible action points.

To go straight to one of the key findings, see the chapters below:

1:45 – Macro concerns reflected in the sentiment of the sector
19:22- Private markets — The big migration
38:05- Outsourcing — Navigating the future with the right support
53:53 – Sustainability — Closing the gap between ethics and investment returns

Inflationary pressures that began bubbling during the Covid crisis have come to a head, and central banks are fighting it by engineering an economic slowdown. Risks remain high in some markets, in others there are grounds for optimism and buying opportunities.

Samantha Davidson, US OCIO Segment Leader is joined by Rupert Watson, Head of Asset Allocation, Europe and Anthony Brown, Director of capital markets, US to discuss the key findings from our 2022 mid-year outlook. 

Join Rupert Watson, Head of Asset Allocation Europe and Rachel Volynsky, CIO Canada as they discuss the outlook for equities after significant falls this year.

The FED has faced criticism for being too slow to tighten financial conditions, and to not notice or appreciate what was happening to inflation. With a recession seeming inevitable for many, Rupert and Rachel discuss whether they think we are heading for a recession, but importantly whether it will be a deep or mild recession. With Equity markets having corrected this year and signaling a return towards fundamental valuations, we ask is there more to go and will the FED intervene?  Where can investors look for opportunities across developed markets, China and more broadly emerging markets.

Many investors lack significant experience of the private markets space and, therefore, require some understanding of how it fits into their portfolios.

In this episode, Amy Ridge is joined by Dr Ashby Monk, research director at Stanford University’s Long-Term Investing initiative, and Billy Charlton, Mercer’s global head of private markets data analytics & research, to discuss some of the biggest issues around private markets and what institutional investors should consider before putting their capital to work.

The level of portfolio protection from high-quality debt instruments that generations of investors have relied on is no longer there. Investors need more tools in the toolkit. Gold and some currencies can protect well, but are subject to idiosyncratic risks and are noncontractual; their protective capacities are essentially market conventions or rules of thumb. Contractual approaches to protection, specifically options on equity indices or on market volatility could also be warranted today, though these can raise issues over the cost of carry (spend on option premiums), which generates a drag on returns in persistently buoyant markets.

Given the need to manage a range of exposures dynamically, there is a role for hedge fund strategies, including macro managers, which may be better equipped at managing through a transitionary period. Furthermore, given the potential for higher correlation between equities and bonds, reducing exposure to traditional beta in favor of strategies that are expected to generate returns regardless of market direction has merit.

In this episode, Deborah Wardle is joined by Dave McMillan and Dr Sushil Wadhwani, Chief Investment Officer for PGIM Wadhwani to discuss some of the key questions surrounding the hedge fund investing landscape at the moment and in doing so, look to answer the question of whether hedge funds staging a comeback?

In this episode, Angelika Delen is joined by impact investing consultant Charly Kleissner, PhD to discuss the difference between impact and deep impact investing, the importance of transparency and how investors need to work together to change finance as opposed to just financing change.

Charly Kleissner is an impact investor. He believes that the real meaning of wealth is to make a positive contribution to humanity and the planet. He is a leader of the deep impact movement which is not only treating the symptoms of our failing economic system, but its root causes – with a level of awareness and consciousness that is non-anthropocentric. He sees impact investing not as an intellectual exercise, but as an expression of who he really is.

Why is water, essential to life on earth, not more central to investors’ decision making?

In this episode dedicated to Earth Day, Mark Longbottom is joined by Helga Birgden and John Elmore-Jones to discuss their latest research into the importance of water, as a critical resource, when considering investments. They explore why investment into protecting water as core to people and the environment needs an urgent reset, and they outline what approaches investors can take to address the risks of overlooking the importance of investing in our planet.

Mercer has recently been working in partnership with the Valuing Water Initiative, CDP and the Water Footprint Network on a project to increase water-related transparency and awareness among financial institutions.

The Russia – Ukraine conflict continues to cause uncertainty for investors. Energy prices and Inflation continues to rise globally and the conversation has turned from transitory inflation to the possibility of stagflation.

Listen to Erin Lefkowitz and Rupert Watson as they discuss their outlook for interest rates, inflation and markets more broadly and the possible implications for portfolios.

The escalating conflict in Ukraine has resulted in far-reaching outcomes for financial markets and the global economy. Rich Nuzum, President of Investments & Retirement, Mercer, and Jo Holden, Global Head of Investment Research, discuss the conflict’s short and long-term implications for the real economy and for investment portfolios, what does this mean for energy prices, inflation and interest rates. They also provide a warm up session to our fast-approaching annual Mercer Global Investment Forum Europe on 28-29 March, and share sneak peaks of the key topics that will be covered. They explain how they find their own ideas for innovation, and the importance for investment professionals to gather as a community for shaping the global investments map. Moderated by Annabell Mathiesen-Siem, Mercer Norway CEO.

The resource transition is a term that refers to the sweeping changes, the world needs to make in a way that it extracts uses and disposes of its resources. Resources that range from energy to minerals to food and water and biodiversity. Carbon emissions have understandably been a key focus for attention to avoid or diminish the climate crisis. However, a wider lens is needed to sustainably service the food, water, housing, labor and transport needs of almost eight billion people. Biodiversity, adequate freshwater supplies and topsoil management are needed for food security; minerals for electric vehicles; and energy from sources such as nuclear and gas, given the intermittency of renewables. Put simply, a resource transition is needed, not simply an energy transition. 

To discuss these challenges, Nick White Global Strategic Research Director, Mercer is joined by our 2 guest speakers form Impax Asset management. Chris Dodwell, Head of Policy and Advocacy, with over 25 years’ public and private sector experience in climate change, sustainable energy and environmental policy and regulation and David Li , Senior Portfolio Manager who co-manages both the Asian Environmental Markets Strategy and Asian Opportunities Strategy.

Advisors and their clients need to be adaptable to the challenges that lie ahead. Mercer has identified five areas for financial intermediaries to consider – areas we believe are critical for long-term success.

Read the top considerations for financial intermediaries in 2022 paper here.

Take the global wealth management survey here.

Endowments and foundations are facing an environment of rich equity valuations, ultra-low fixed-income yields, and newly awakened inflation, coupled with concerns on environmental and societal problems.

In this episode our not for profit specialists discuss the range of challenges and opportunities we believe endowments and foundations should be thinking about in 2022, and crucially how they can look to protect and position your investment assets.

Read the top considerations for endowments and foundations in 2023 paper here. 

Take the global not for profit survey here. 

Climate change, social upheaval and global instability are inescapable for us as a society – but what can we do as investors?

In this in-depth, two part podcast, we speak to a distinguished behavioural scientist Dr Sweta Chakraborty, who explains how investors can cut through the – sometimes distressing – noise to see where our capital allocations can make a real difference and help create a better world for all of us. Investors cannot just think about the here and now; they must consider the issues most likely to drive future financial, social and political developments in a way that allows them to take the decisions needed to meet their objectives. Through consideration of these key trends and challenges, we believe investors stand the best chance of long-term success.

Climate change, social upheaval and global instability are inescapable for us as a society – but what can we do as investors?

In this in-depth, two part podcast, we speak to a distinguished behavioural scientist Dr Sweta Chakraborty, who explains how investors can cut through the – sometimes distressing – noise to see where our capital allocations can make a real difference and help create a better world for all of us. Investors cannot just think about the here and now; they must consider the issues most likely to drive future financial, social and political developments in a way that allows them to take the decisions needed to meet their objectives. Through consideration of these key trends and challenges, we believe investors stand the best chance of long-term success.

Substantial and profound changes are rapidly reshaping the world as we know it, with significant implications for investors. This vibrant re-imaging can be encapsulated in a single word: Metamorphosis.

Investors cannot just think about the here and now; they must consider the issues most likely to drive future financial, social and political developments in a way that allows them to take the decisions needed to meet their objectives. Through consideration of these key trends and challenges, we believe investors stand the best chance of long-term success.

US Interest rates: where to from here?
With the Fed likely to start tapering their bond purchases this year, attention will soon turn to when they will raise interest rates and how high they will get. Will rates stay at exceptionally low levels or might we see the sort of levels we saw before the Great Financial Crisis?

Is it Japan’s time to shine?
Japanese equities have been unloved for a long time, but is the tide turning? The outlook for the economy doesn’t seem to have changed enormously, but some investors are becoming more optimistic on the outlook for Japanese equities. We’ll discuss the reasons why or whether investors should avoid.

The High yield trade
Credit spreads are very tight. Does this mean returns are likely to be poor or will low default rates and other factors support the asset class?

How do investors move from curiosity to conviction when it comes to increasing diversity in their portfolios?

Our panel will discuss how LPs could achieve greater diversity, whether based on portfolio requirements, board demands, or the opportunity set. To “add diversity,” investors must not only answer important questions, they must know what those important questions are. We will discuss how to start the crucial conversations around gender and racial equity necessary for creating a diverse portfolio.

Is Diversity and inclusion different to ESG?

Institutional investors, in growing numbers, are announcing their aims to reduce portfolio emissions to net-zero, with almost half of global assets estimated to be pledged to meet climate change goals.

The drivers are two-fold: the near-term risks and opportunities presented by the low-carbon transition already underway, plus the expectation that a 1.5°C climate scenario will allow investors to consistently meet return objectives over multiple decades.

But behind the flurry of recent announcements to set alignment targets, how is investment in the transition tracking? Will pledges be implemented and what happens if not? What approaches are investors adopting? What’s working and what obstacles remain?

In this episode, Rupert is joined by colleagues Elizabeth Paine and Matt Scott to discuss developments in the world of cryptoassets and the wider digital ecosystem they underpin including decentralized finance.

Whilst it is tempting to dismiss most or all of the thousands of cryptoassets and their use cases as being part of a very old story, the get rich quick scheme, Matt and Lizzie will attempt to convince Rupert that there may indeed be some flowers on the dungheap.

As well as discussing the potential for upside in these assets, they will also discuss recent challenges to cryptoassets, including regulatory action and responsible investment concerns.

Global systemic risks could significantly influence investor returns and long-term objectives in both positive and negative ways. Investors should understand what these risks are, along with the opportunities they may also bring, and implement an efficient strategy to integrate them into their portfolios.

Join our guest speakers, as they discuss their findings from our recent white paper – Trendsetters: Transformational Investment Practices of Advanced Investors, and how we developed a framework for addressing global systemic trends that investors can use to benchmark their progress against their peers.

Inflation fears are rising. After 10 years of inflation being too low that might actually be good news. But what are the implications for bonds, equities and portfolio construction more generally?

Garvan McCarthy (Partner & CIO Alternatives, Europe) and Nick White (Global Strategic Research Director) join Rupert Watson to discuss their views on the topic on every investor’s lips.