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Michael Maduell – A Reflection on 2014

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2014 marks another fascinating, yet optimistic year in the interconnected world of asset owners. We have witnessed assets under management of sovereign wealth funds break the US$ 7 trillion mark. At the same time, global prices of oil have changed direction, China has surpassed the United States in gross domestic production and Bill Gross left PIMCO. The last list item was a veritable goldmine for asset management reporters!

Economic Issues Facing the United States

The United States demonstrates economic growth, but the prosperity is not shared by all. According to Janet Yellen, Fed Chair, income inequality in the United States is near its highest levels of the past 100 years. According to BLS statistics, young American men ages 16 to 24 had a 70.5% labor participation rate in 1992 compared to a staggering 56.5% in 2012. Furthermore, there is a decline in new businesses, a massive student debt bubble, all while America faces an aging, crumbling infrastructure. Small businesses don’t have the same access to special tax breaks given by government, stuck with higher regulatory burdens and faced with limited lending options.

More Coverage and More Events

2014 was a milestone year for the Institute, or shall I say SWFI. The team at the SWFI has worked remarkably hard to deliver the best value for our clients. We have broadened our coverage on asset owners to include additional public funds: afores, superannuation funds and more overseas pensions. Our SWFI membership program continues to thrive, attracting new and diverse organizations – trumping our 2013 member count. On the event side, we hosted a record number of 4 events, with two bespoke conferences in Turkey and Australia.

Institute Fund Summit Europe 2014, October 27, Smart Beta Panel.  Pictured: (L-R) Michael Maduell, SWFI, Mark Sodergren, Northern Trust, Luciano Siracusano, WisdomTree, Riti Samanta, SSgA, Simon Lansdorp, Robeco.

Institute Fund Summit Europe 2014, October 27, Smart Beta Panel. Pictured: (L-R) Michael Maduell, SWFI, Mark Sodergren, Northern Trust, Luciano Siracusano, WisdomTree, Riti Samanta, SSgA, Simon Lansdorp, Robeco.

Events

We hope to see you at our events in 2015. Our team will be heading down to Miami Beach as we partner with the National Association of Investment Companies (NAIC) to host an asset owner forum. In Miami, our delegates will hear from successful investment executives who manage billions, policymakers and asset owners who dole out billions. Then we head to Seoul in late April.

We have also conducted a number of initiatives such as bespoke research projects. Our most notable was Smart Beta: A Referential Guide for Institutional Investors, which tracked the adoption of smart beta strategies among large asset owners such as sovereign wealth funds, pensions, central banks and other funds.

Successful Subscription Model

We have rapidly grown our subscriber base and modified the way we offer our services to clients. We have migrated to the corporate/organization license model to better service our clients, increase penetration and ease of access. SWFI staff has increased coverage to well over 100 institutional investors, tracked over 14,000 direct transactions and inked a record number of stories for 2014 – leading to us reaching the highest levels of web traffic ever…

Lastly, using feedback from our clients, we launched SWFI Compass in 2014. This business intelligence tool gives our clients a leading edge in finding RFPs, searches and opportunities in the opaque world of asset owners. Just wait for what we have installed for 2015!

Happy investing,

Michael Maduell

The views in this article are expressed by Michael Maduell.
Michael Maduell is President of the SWFI.
www.swfinstitute.org

GIC Sells Arizona Biltmore to Blackstone

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Blackstone Real Estate Advisors, part of the Blackstone Group, acquired the 740-room Arizona Biltmore hotel, located in Phoenix, for US$ 403.4 million. The deal closed on April 20, 2018.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Mubadala Acquires Stake in Growing Hedge Fund Phoenician Capital

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Mubadala Investment Company, through its unit Mubadala Capital, purchased a minority stake Phoenician Capital, LLC. Although terms and size of the deal were not disclosed, the agreement grants Mubadala Capital rights to invest in a fund managed by the New York-based firm, which generated respective returns of 40.8% and 33.0% in 2016 and 2017, against benchmarks of 12.0% and 21.8% for the S&P 500. The hedge fund runs the Phoenician Offshore Fund Ltd.

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

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Large Asset Managers Continue to Move Operations Out of California

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In the 2010s, Fisher Investments, an investment firm run by Ken Fisher, moved a large number of employees from the Woodside and San Mateo campuses to a town called Camas in Washington, near Portland. Vanguard has a large operational presence in Arizona, while Charles Schwab Corporation has expanded its technology operations and client services in places like Denver, Dallas, Austin and Phoenix. Dimensional Fund Advisors moved its headquarters in 2008 from Santa Monica, California to Austin.

While asset managers reap profits and try to lower employee head count costs, looking to fly-over country seems appealing.

The Pacific Investment Management Company (PIMCO), part of the Allianz family, selected Austin, Texas as its new office to hire more client services and technology talent. The PIMCO Austin office will open later in 2018. PIMCO is headquartered in Newport Beach, California, with an office in New York City.

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