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4 Horrible Performing Investments for Institutional Investors in 2014

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ruble energy

As Santa Claus sprinkles down bow-tied gifts on U.S. stock market investors, not all was well for investors in 2014. The equity capital markets laid traps for institutional investors. At times, even the “smartest minds” in investing make serious errors when allocating assets. For example, the AllianceBernstein All Market Real Return Portfolio, which actively shifts in an array of real assets, posted a -11.66% year-to-date return from December 26th. The real return fund, having a high exposure to the energy sector, is managed by John Ruff who has co-authored articles in finance publications and holds pedigrees from top finance schools. No matter how much research is consumed, consultants and advisors hired, there are going to be times when institutional investors make lousy calls. Some investment strategies have performed abominably this year, costing investors significant losses.

Below, the SWFI editorial staff highlighted some really bad investments for 2014.

#4 Small-Cap Energy Funds

A large number of small-cap energy funds performed horribly in 2014, especially the funds heavily allocated to debt-laden junior energy companies. The shale boom opened up the credit valve for many of these junior energy companies. Some funds that suffered lousy performance were Fidelity Select Energy Service Portfolio, which if an investor allocated US$ 10,000 on January 1, 2014, they would have US$ 7,810 on December 21th. Another example is Schroder International Selection Fund. This fund invests in equity and equity-related securities in junior energy firms, posted a -33.1% year-to-date return from November 28, 2014. This is in a year where in six months, oil went from US$ 111 per barrel to US$ 59 per barrel.

Yet despite the bad news, energy private equity funds are raising massive amounts of money from institutional investors. Private equity firms like Warburg Pincus, KKR and the Carlyle Group raised energy-focused private equity funds attracting pension and sovereign wealth dollars.

#3 Crude Oil

For most of 2014, the price of crude oil has been slipping, being a boon for U.S. consumers. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

Ping An Good Doctor Lures Big Public Asset Owners

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Ping An Good Doctor, formerly known as Ping An HealthCare and Technology Company, is a Chinese online healthcare platform that is part of Ping An Insurance (Group) Company. This unit is planning to be offered in a Hong Kong initial public offering that could raise as much as 8.8 billion HKD in shares at 50.80 or 54.80 HKD per share.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Temasek and Schneider Electric Eye L&T Electrical Unit

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Singapore’s Temasek Holdings and France-based Schneider Electric are in talks to acquire Larsen & Tourbo’s electrical and automation business. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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CalPERS Allocates $1 Billion Internally to a Global ESG Strategy

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In February 2018, the California Public Employees’ Retirement System (CalPERS) allocated US$ 1 billion to an internally-managed QSI Global ESG strategy. The internally-managed strategy was developed by New York-based QS Investors, LLC, a subsidiary of Legg Mason. CalPERS entered into a 5-year contract with QS Investors, with a possible spend of over US$ 1 million per annum.

[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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