Joy: Peer group benchmarking destroyed the UK defined benefit pension industry
Tom Joy · Tom Joy – Divine Diversification and Responsibility at Church Commissioners (Capital Allocators, EP.306) · Apr 3, 2023 · at 58:24
Tom Joy, Chief Investment Officer at the Church Commissioners for England, discusses institutional investment practices and pet peeves with Ted Seides.
0:00 / 0:17exact quote · 17.5s
720p mp4 · rendered on demand · StarZero watermark
“I would say peer group benchmarking. I think that is just wrong on so many levels. Thankfully, I'm not subject to it, but I think it, you know, destroyed the UK defined benefit pension scheme. And that whole industry is just so problematical on so many levels. So that would be my biggest one probably.”
quote is from the automated transcript, cleaned for reading: filler sounds and stutters are removed, nothing is rephrased. names can be misheard (the analysis reads context, assessments check outside sources). how →
More from Tom Joy
Joy: Investment committees resist firing managers with stellar trailing returns
“I think, and history's shown me, that it's very hard to get an investment committee to agree to firing a manager when their performance is stellar, or to not re-up With a manager when they've got absolutely shoot the lights out numbers, but in our view, they'v…”
Joy: Divestment versus engagement is a false dichotomy in responsible investing
“So, I mean, I guess the first thing on divestment versus engagement, people often are in one camp or the other, and I would say it's a false dichotomy. You need both, because I think engagement without the ultimate threat of divestment is a very blunt instrume…”
Joy: Pure oil and gas companies face existential stranded asset risk
“We really sort of feel that pure EMP, or pure oil and gas companies, face ultimately an existential threat, and actually you arguably would probably want to divest from them for financial reasons. Now, of course, if you look at the last year or so, they've don…”
Joy: Fixed return targets force allocators into excessive risk during downturns
“And if you've got a set target, and return prospects are not so good, by definition, you have to increase risk. Just what I think is the counterintuitive and worst time when you want to be Reducing risk.”
Joy: Aggregate hedge fund industry does not justify its fees
“If I was to talk generically about the hedge fund industry, I would say that probably on balance,
At an aggregate level, that industry doesn't justify its fees or its role in the portfolio, because on a net of fee basis, it's really not going to give clients …”
Joy lets manager access dictate Church Commissioners' venture capital allocation
“So I don't target a VC allocation. I target VC managers, and I will take what I can get from the managers that I'm targeting. We have a very concentrated book of managers, and our allocation, if you like, is what drops out of the access we can get with the man…”