Total Portfolio Approach

“The way I believe the best investors sort of attack markets is with a total portfolio approach. So very much embedding in the entire team, a deep understanding of those investment objectives, a deep understanding of what matters most for our members. So moving…”

“A lot of the US pensions now, some of them are considering this total portfolio approach. They've been very public about it. Moving strategic allocation to total portfolio approach. There are organizations that have done that globally for years.”

“We're not just giving out an asset allocation and a bunch of benchmarks and managing active risk against it and trying to maximize the information. We are actually trying to maximize a total return at a given level of risk. Over the long run.”

“It's the future. 22 years from now, we'll be like total portfolio approach. That's so funny. We weren't doing that.”

“If you're going to go from a strategic asset allocation to a total portfolio approach, that's a shift in asset allocation. Can't do that in a vacuum. You're going to have to completely change your organization and how you're implementing it, and that's the par…”

“Once you have these systems in place, you could pivot around beliefs, assumptions. It also allows you to be counter-cyclical very quickly. If markets move quickly, you're going to be able to buy low, and if you feel like things are inflated, you can sell high.”

“PGGM in the Netherlands, so they're about to launch their version of TPA, which is exciting because PGGM has what they call three D TPA, three dimensions, risk, return, and impact. Every deal gets analyzed in terms of those three dimensions.”

“The unit of work becomes knowledge work instead of deal work. The unit of work is different. It's not capital deployment. It's not bucket filling. It's something else moving you towards your objective, intelligent understanding of additionality in your portfol…”

“If you're a big private equity infrastructure investor, you're probably a little nervous about the TPA push. It's hard to do TPA when you're making a 15 year commitment. You're planting seeds that are going to take a long time to grow. It's harder to move arou…”

“I can remember the New Zealand Superfund, which is one of the best total portfolio investors having to scrub out all of the individual portfolio links to their compensation. It was total fund, qualitative metrics for compensation.”

“By the way, that's going to help you to recruit and retain human beings. It's hard to recruit and do a TPA. You recruit people into private equity jobs, real estate jobs, because we demand, especially at the senior levels, a certain level of expertise and netw…”

“When you're thinking about its contribution to the whole portfolio, you should be much more comfortable in having a more concentrated asset class portfolio because it gets diversified away at the whole portfolio level.”

“One of the big advantages of having A total portfolio approach with the reference portfolio is you tend to have a more stable risk appetite through time, and it'll be transparent if risk is taken up or down.”

“If you're sitting there with a strategic asset allocation, and you've got all these asset classes, it could be that you've got a hybrid, where does it sit? Or there could be something that's new, and you don't have a bucket for it. It's hard to do. With the to…”

“With the transition to a total portfolio approach, we weren't asking for that much active risk. We were asking for more flexibility in how we used it.”

“It's probably smaller teams that are better positioned.”