APG and PSP Investments told investors at the Fiduciary Investors Symposium that unless they embrace technology and innovate, their licence to operate will be under threat. They explain how and why they are embracing technology in all aspects of their investment process and operations.

Asset owners must embrace technology or have their licence to operate questioned by stakeholders according to two large asset owners who are leading the charge on bringing innovative technologies to investment processes in a bid to increase efficiency and outcomes.

Eduard van Gelderen (pictured), chief investment officer at Canada’s C$243 billion PSP Investments, told the Fiduciary Investors Symposium at Stanford last month that pension funds’ licence to operate is under threat if they do not embrace technology.

“I am 200 per cent convinced that investment models will change and will change rapidly,” he said. “If you take a step back and ask what your licence to operate is, ours is to keep the defined benefit system alive and sustainable. I don’t think that is possible if we continue to work the same way as we did before.”

He said that technological changes are happening so quickly if pension funds don’t keep pace and deliver results the general public will start to ask “why do you actually manage our money”.

“So to me that is one of the drivers of why I am so eager to change the investment process and embed the possibilities of technology and to really exploit the technology the best way we can, that is one of the ways to actually keep your licence to operate.”

Van Gelderen was part of a panel with Peter Strikwerda, global head of digitalisation and innovation at APG, chaired by Ashby Monk, who with Dane Rook in 2022 wrote The Technologized Investor, a play on Benjamin Graham’s book the Intelligent Investor, with the subtext that technology is the future of intelligence.

Strikwerda said APG was innovating across the business with focus on “pockets of value” including portfolio construction, responsible investment, investment decision making, client services, and efficiency with all aspects of the business now “highly data driven”. (See Portfolio managers 3.0: APG’s digital future)

“Over the last 10 years I have been involved in close to 100 innovation initiatives from very small to very big,” he said. “What we do in our innovation approach is we merge business, IT and data knowledge together. One of the key implications of working with data is you need to make it ‘business owned’ and bring the capabilities together in the same teams.”

He said of the 100 initiatives investigated only about 20 per cent survive with a very systematic approach taken to innovation.

“We kill about 80 per cent of those innovations,” he said. “It’s not by luck we stumble into things, innovation needs discipline. Investors need to get mature in that, they need to learn how to do that, and that takes time.”

Strikwerda said investors need to embrace a change of mindset in order to succeed in innovation.

“In a normal operations environment you have KPIs and control mechanisms. When you want to innovate you approach that differently, you want to take risks, make mistakes and pivot from those, a learning ability is key to be able to innovate.”

Monk, who is the executive director of the Stanford Research Initiative on Long-Term Investing noted within funds management most of the technological evolution comes from within the industry – from funds managers or custodian banks – but there was little embracement of start ups.

“A lot of the technology we see in this industry emerges from this industry. We are sitting here at Stanford and the students here are looking for problems to solve. Why not the $140 trillion problem of pension funds?”

APG’s Strikwerda says the fund does occasionally work with startups and has also tapped into the Stanford ecosystem.

“We invest in some venture. Every now and then we take a stake in a company but we do it for strategic reasons, not from an investment perspective,” he said.

The investment in Entis, an AI-powered data science platform, that is a foundational data provider for the Sustainable Development Investment Asset Owner Platform is a good example.

“We also do some co-creation working on specific problems I find that interesting because we learn a lot from that and do a lot of knowledge transfer,” he said.

But APG’s experience demonstrates how difficult it is for large, slow-moving, regulatory-burdened asset owners to operationalise good ideas.

“There is a big difference between a nice idea and something that will fit all our rules and regulations that we need to comply with in order to operationalise something,” he said. “You can’t just put something into a process where you run billions of euros in transactions. There is a real challenge there. To really scale it up it has to be proven before we can really apply it at scale. In between is the question do you want to put in some small efforts to get it going, that is difficult because it is still pension money, you can’t gamble with that. It’s not easy.”

Monk noted with large scale investments like technology – which can be up to $150 million – the business case for value creation from that has to be clear.

Van Gelderen says in making that business case it is important to focus on the individual asset owner’s mission.

“When we think about new technologies and advanced analytics we are keen to be very precise on where the most value for us is,” he said. “We try to team up with strategic partners so that we can rely on some of the technology they can bring to us and we can piggyback on what they do, that’s an attempt to keep the cost low.

“If you think about the business of asset owners, everyone feels it’s a scalable business, but the reality is very different. If you take the biggest cost drivers, human capital and technology, both are actually growing at 7-8 per cent. That is something boards don’t like to see, so they ask you to make very clear decisions on where you spend it and the value add and how you operationalise it. We do it with partners.”

The board and management changes at PSP over the past few years have been an opportunity to focus more on technology.

“There was a sense of urgency and we need to think about it, the topic came up over and over again,” he said. “The Canadian model has been extremely successful over the past 20 years but that is no guarantee for the next 10. The good thing is I do have the support from the board to look into innovation and how it applies to our investment processes. It is still small scale but the successes have been adopted, and we need to give it room to grow.”

Strikwerda says it is important that investors realise that “more data is not the goal”.

“Like the saying more money more problems, it is also true that more data more problems. You need to be very concise and focused on where you put your money,” he advised, adding that problem is magnifying with technological advancement. “The problem is growing day by day because the data and technology available is growing so fast and with generative AI it is tremendous. Spending your money wisely and having capability to make those decision is key.”

He said APG continuously has conversations with its board on how the investments in technology could be translated into alpha.

“The conclusion is you can’t, you can’t isolate it, unless maybe in quant,” he said. “Any outcome is a combination of technology and human input so you can never say we are only generating this much alpha isolated by technology. So what we did, we reversed it so all our investment teams have a KPI on systematic decision making, which breaks down on using technology and standardised data, because our belief is that will lead to better outcomes.”

The Teacher Retirement System of Texas (TRS) believes AI can differentiate the fund and become a powerful source of success. In a recent board meeting at the $200 billion public pension fund with some 200 full time employees at offices in Austin and London, Mohan Balachandran, a managing director at the fund explained how the investor is already using AI and the opportunity and risk ahead.

“It’s a giant leap forward and we really need to embrace it. In my team we are embracing it and figuring out how to use it and put the safeguards in place,” said Balachandran, whose responsibilities include overseeing a multi-asset program that comprises a $15 billion quant allocation to public equities.

The arrival of OpenAI’s ChatGPT has both transformed and accelerated AI integration, creating a new level of realistic computer interactions with humans. It also heralds the start of AI applications touching multiple areas of life from finance to creativity and language, in contrast to narrower, previous applications of the technology like opensource chess software, StockFish.

Tapping the opportunity

TRS is already using the technology to manage risk and create portfolios. For example, it uses it to identify patterns, and which factors work best in the Japanese market. It also uses it to extract sentiment from transcripts on management calls.

Other public market exposure to the revolutionary technology includes investment in the companies leading the digital revolution, the so-called magnificent seven (Apple, Microsoft, Amazon, Google, Nvidia, Tesla, and Meta). Investment in chipmaker Nvidia, off the back of soaring demand for the processors needed to train the latest artificial intelligence models, has been particularly profitable.

Outside these stocks, all highly geared to AI, TRS is also focused on how AI will affect the S&P500’s other 493 stocks. TRS chief investment officer Jase Auby said that the team are mindful of how much money companies are spending on IT, and noted that many companies have slowed their IT spend since 2000. “It has plateaued in the last 20 years,” he said.

In contrast, Tesla’s Dojo Supercomputer is garnering attention following a positive writeup from Morgan Stanley around its billion dollar impact on the company’s’ market capitalization. Auby noticed that S&P500 constituents increasing mention AI on board calls.

In private markets like real estate TRS is tapping opportunities in data centres, the complex buildings housing giant cables and cooling systems. Elsewhere it applies AI to private markets to create memos and summarise transactions. Opportunities are also coming in private equity and venture.

Balachandran explained how TRS integrates the technology into its own investment processes. The quant team tests signals on a data set, figure out the weights it needs using that data set, and then presents it to the portfolio management team to test if the model is robust.

“Any new signal we bring in we bring in with a small weight and evaluate over a period of time. We look for consistent performance, then start getting more confident.”

AI Integration: data and security

One of the biggest challenges of using the technology is access to data.

“Financial data is very small compared to other data,” said Balachandran. For example, Tesla has vast access to data needed to feed into its autonomous driving models. It has fleets of cars on the road with sensors, gathering the data required to build its models which technicians are constantly improving by tapping new data.

In contrast, investors trying to build similar models face a more challenging data gathering process. Financial market data is noisy and markets are also efficient and constantly change.

“In finance, the market evolves and changes so designing a model is difficult,” he said.

High frequency data can create good models, but he noted that the capacity to execute with high frequency data is more difficult.

TRS is also mindful of the risk of using AI in its investment processes. The pension fund holds information that is confidential like member and healthcare data and other companies’ experiences show what can go wrong. Like Samsung Semiconductor which let its fab engineers use ChatGPT for assistance, using it to fix errors in their source code in a process that also leaked confidential information.

Auby added that TRS has been considering the risk of AI for years. “We’ve been thinking about security in our IT systems for a long time,” he reassured.

Balachandran concluded with a warning of the hype in AI, flagging that only a handful of companies coming out with new applications will do well. The board also heard how TRS expects the speed of AI adoption to accelerate with implications for headcounts at companies.

 

Biodiversity, transition finance and a sense of urgency around climate resilience and mitigation were some of the focus areas of Climate Week 2023 in New York, dubbed the “Burning Man for Climate Geeks”. PSP Investments’ Herman Bril and Stella Y. Xu reflect for Top1000funds.com on the highlights from Climate Week which they attended this year. They didn’t attend Burning Man in 2023.

Climate Week NYC completed its 15th year as the world’s largest global climate event alongside the UN General Assembly, bringing together a global nexus of policymakers, academics, investors, and corporate leaders.

The New York Times dubbed this year’s summit as a “Burning Man for Climate Geeks”, referencing the week-long large scale desert event in Black Rock City, Nevada that emphasizes decommodification, civic life and leaving no trace on the environment. Contrary to the recent flameout at Burning Man from climate-induced flooding, the mood in NYC was reservedly optimistic with an undertone of urgency. Our team spent a hectic but energizing few days navigating a dizzying array of 400 sessions, workshops, and dinners, where discussions likely signpost many topics that are expected at COP28 in November.

What is clear more than ever before is that Climate Week is not just about climate. Just as the theme of Burning Man this year was “Animalia”, celebrating the animal world and our place in it, Climate Week NYC kicked off with the Taskforce on Nature-related Financial Disclosures (TNFD) publishing its final recommendations to guide companies in disclosing their dependencies and impacts on nature, following the adoption of the Global Biodiversity Framework (GBF) at Montreal’s COP 15. Discussions around geopolitical risks as well as geo-economic policy measures impacting energy accessibility, affordability and sustainability also took center stage, reflecting that a geopolitical lens now also impacts investment decisions and risk management. Domestic election cycles, polarization of ESG in the US, and the need to detangle ESG from culture wars were also recurring themes.

This year Climate Week followed a historic stretch of weather extremeness which culminated in California Governor Gavin Newsom announcing his intentions to sign the California climate disclosure bills into law. The Glasgow Financial Alliance for Net Zero (GFANZ) also launched a consultation on its work to further refine the definitions of its transition finance strategies and support financial institutions to invest in real world decarbonization Paris-aligning strategies. Development in climate technologies from solar to EVs and nuclear fusion may accelerate mitigation efforts, but blind spots remain, ranging from grid expansion and permitting to emerging market green transition investment gaps. Discussions around the role of AI and its ability to unlock vast potential for renewables, specifically around advance prediction capabilities and automation capability, further supports the narrative that Moore’s Law is still relevant and will be for the coming years.

Several sessions also highlighted the significance of climate mitigation through Internationally Transferred Mitigation Outcomes (ITMOs), reflecting a significant milestone for the Paris Agreement. ITMOs are a mechanism for countries to sell emission reductions to other countries or companies to use toward their own targets. Recently, the South American forest nation of Suriname announced plans to become the first country to sell carbon credits, an innovation which can bring much needed financing to developing countries to accelerate clean energy transitions. The United Nations Conference on Trade and Development (UNCTAD) recently called for urgent support of developing countries to attract investment in clean energy as much of the growth in renewables investment since 2015 has been concentrated in developed countries. The choices developing countries will make as they progress will shape climate risk for all and should be viewed as a matter of urgency for the investment community.

At the same time, more focus is needed on adaptation and to build resilience for the future. As the climate crisis deepens, climate resilience defined as the capacity of interconnected social, economic and ecological systems to cope with a hazardous event, trend or disturbance, responding or reorganizing in ways that maintain their essential function, identity and structure – will increasingly come to the forefront as we face more frequent and severe weather events.

Two consecutive years of brutal weather – one scorchingly hot, one gloomily wet – at Burning Man should serve as an allegory that the systems-based world we belong to is careening towards a tipping point. Research published last year in Science suggests that the risk of a tipping point accelerating climate warming is now likely to happen in the 2030s. Separate analysis of the planetary boundaries concept, which presents a set of nine planetary boundaries within which humanity can continue to develop for generations, shows that six of the nine boundaries have been transgressed. As long-term effects of interactions among variables are difficult to forecast, panelists emphasized the need for more up-to-date and relevant scenario models for the investor community and to shift away from long-term linear models to shorter-term realistic ones. It is worthwhile for investors to delve deeper into the themes highlighted during Climate Week, as they will undoubtedly shape the conversations at COP28 in Dubai later this year.

Herman Bril is head of sustainability and Stella Y. Xu is senior director, ESG investment research at PSP Investments. 

Over the last three years, AP1, Sweden’s SEK 446 billion ($40.4 billion) buffer fund and one of five backing the income pension system, has only allocated to GPs investing in at least one of the 17 SDGs in its private equity portfolio.

Since 2021, around 15 per cent of the $2.9 billion private equity portfolio has been invested with 16 GPs with funds with sustainable strategies. “All new investments in the portfolio now align with our sustainability objectives,” says Jan Radberg who oversees the portfolio that he says will gradually  increase. “Returns come first, but investments to date have done well and we are encouraged to continue.”

Progress isn’t uniform since the venture portion of the portfolio (around 15 per cent) is taking longer to develop, but in the buyout space he sees good progress in terms of revenue growth and profit. “We haven’t seen too many exits yet, but it’s coming.”

The SDGs smaller investable universe leaves AP1 navigating a market segment with less opportunity or proven managers. “Managers haven’t been working in the sustainability space for as long as in traditional private equity,” he says.  It would make deployment for a large LP with regular pacing challenging, but the strategy fits nicely with AP1’s small, 7 per cent allocation to the asset class.

“[Investing in the SDGs] can be easier for smaller or medium sized LPs with less capital to deploy. However, we can see that the investible universe is growing as many traditional private equity managers are redefining their strategies or adding new business lines at the same time as newer entrants are getting more experience.”

Adding value through ESG

More managers could also move into the space given the returns available for private equity investors that add value by integrating ESG. Especially since private equity investors are feeling the impact of higher interest rates and a tougher business cycle, as well as geopolitical uncertainty.

With the caveat that some businesses are more suited to ESG improvements than others – and it is more difficult to add value in venture – Radberg says GPs are increasingly seeing value from improving sustainability in a company when they exit. “We often see GPs buy small companies that haven’t integrated ESG, and then using ESG improvement as a tool to increase the value in the underlying company.”

Investing in line with the SDGs also reveals important trends in climate opportunities in private equity – they are surprisingly hard to find.

Although AP1 aims to create diversification by investing in as many SDGs as possible, around half of the total allocation to the SDGs currently sits in healthcare (SDG 3: Good Health and Wellbeing). “It is more difficult to find investment opportunities around some of the goals,” he says.

After healthcare, AP1 invest most in climate-related SDGs where Radberg would like to allocate much more. Although opportunities abound in climate infrastructure like solar and wind farms, or sustainable real estate, he says it is difficult to find private equity opportunities in the energy transition space that are pure private equity plays. “Infrastructure is normally longer-term, lower yielding assets compared to private equity, and those kind of assets are not included in our private equity mandate.”

However, he says opportunities in the decarbonization vertical are starting to emerge. “Decarbonization is an interesting space, and we will increase our exposure here over time.”

AP1’s SDG lens has slightly adjusted its regional focus away from the US to more GPs in Europe where LP demand for sustainable investment is stronger. The wider private equity portfolio is split between America (60 per cent) Europe (30 per cent) with the remainder in emerging markets while venture and growth account for around 15 per cent each with the remaining 70 per cent of the allocation in buyouts.

Still, he notes that the number of US managers experienced in the sustainable venture space supersedes other regions, and America has more opportunities in decarbonbisation than other areas. Moreover the supply of investable projects in clean, renewable energy is sure to expand off the back of the climate incentives in the 2022 US Inflation Reduction Act.

He also believes that the number of managers targeting SDGs and impact will could grow if more LPs focus on intentionality. He expects progress in the space to manifest around new KPI beyond just carbon emission targets indicative of the different ways investors can contribute to a a more sustainable world.

Radberg concludes that finding venture capital GPs experienced in sustainable investment is most difficult. “It is sometimes difficult for us to determine what the venture managers are going to invest in and how sustainable these investments will be.” AP1 has a rule of thumb that at least 70 per cent of the investments in a fund must align with its chosen SDG.

“We have to be a bit opportunistic and pragmatic to not limit ourselves too much as we are looking for returns as well. It’s a difficult balance.”

He is also concerned that venture could be hit hardest in a tougher environment ahead. If investors start to see less capital coming back from GPs it will impact their ability to commit to new funds. Some of these companies wont be able to raise money again and will have to restructure or close down, he concludes.

Blaming the 2008 financial crisis, and more recent turmoil in the US banking system, on the US Federal Reserve Board’s lack of regulatory power, or arguing that shocks to the system were unforeseeable, leaves the system vulnerable to the same thing happening again, the Fiduciary Investors Symposium at Stanford University has heard.

Banking systems could be regulated more effectively if greater attention was paid to the incentives provided to decision-makers within banks, and less stock were placed in the idea that regulators are powerless to act or that shocks to the system are unforeseeable.

Blaming the 2008 global financial crisis and more recent turmoil in the US banking system on these issues of powerlessness and surprise has “very profound implications” for the financial system and its vulenerability to poor banking prcatices, Hoover Institution senior fellow and co-director of the institution’s working group on financial regulation Ross Levine told the Top1000funds.com Fiduciary Investors Symposium at Stanford University last month.

Levine said it was not unforeseeable shocks and a lack of regulatory power that caused the financial crisis in 2008, and it was not deregulation and unforeseeable shocks that caused more recent turmoil in the US banking system. Levine said removing some banks from the Fed’s stress tests, or the idea it is a toothless regulator, were not responsible for what happened.

“Did deregulation and shocks cause the most recent crises? Many argued that it was deregulation,” Levine said.

“So, is this right? And the answer is no, this is not right. And how do I know that this is not right? It’s that the stress tests ignored possible interest rate hikes.

“These vaunted stress tests, that were supposed to protect the US financial system and banks, didn’t consider the possibility over the last five years that interest rates would go up. Therefore, the lack of the stress test couldn’t have been the source of the problem.”

Levine, who is also a research associate at the National Bureau of Economic Research, said another fallacy that is easy to debunk is that the shock to the system was unforeseen.

“No, of course, it was not unforeseen,” Levine said. “Interest rates had been at unprecedentedly low levels for a very, very long time. The Fed regulates both the interest rates and the banks. And the Fed had been contemplating raising interest rates for quite some time.”

Levine said a bigger problem – in fact, the real problem – is how the Fed regards bank capital, along with issues linked to the regulator’s transparency, governance and accountability.

“The Fed conceives capital as a cushion, meaning that if there’s a shock to the value of the assets, the capital is sort of there to act as a cushion before the bank can go bankrupt,” Levine said.

“Okay, there’s no doubt about that: capital is a cushion, we all know that. You all know that better than I. That’s not the problem. The problem is that the regulators view capital sometimes as that’s the only thing that capital is – it’s only a cushion.”

Levine says, having investor capital at risk is going to influence the type of risks that those investors take “and regulators oftentimes fail to appreciate that”.

Levine said that if the fact that less capital leads to greater risk-taking is ignored or is not understood, then when a shock occurs “you’re going to allow the banking system to operate with less capital, under the hopes – perhaps under the belief – that the capital is going to be replenished, and then you’re going to have your cushion”.

“The problem is, while you wait for that to happen, or while the Fed waits for that to happen, you have the banking industry with huge incentives to take on excessive risk,” he said.

“Now, this is something I have no trouble communicating to the private sector, but this is a concept I have a very hard time communicating to the Fed.

“So when you ask what is the problem with the Fed, I would say that is the problem with the Fed. And we can get into the specifics, but the core issue here is that when bank capital falls, risk incentives go up. It is the basics of moral hazard.”

Levine said there are “many problems” with how the Fed is run and how it operates as a regulator.

“If you were at the Constitutional Convention [imagine] you sort of raised your hands [and said] I have an idea,” Levine said.

“And what we should do is we should take authority over the supervision and regulation of the entity that decides the allocation of credit, you could say, who decides the allocation of economic opportunity in society, and let’s put that into an institution that’s essentially outside of the democratic process and it’s unaccountable to anyone…that’s essentially what we have in the context of the Fed now.”

Like all good long-term relationships, external fund manager partnerships should be steeped in trust, open dialogue, patience and new ideas. Mario Therrien, head of funds at CDPQ explains the key to external partnership success and the important role external managers play in plugging knowledge gaps.

The investment funds team at the C$424 billion ($308.7 billion) CDPQ fills an important function for the large Canadian pension plan, aiming to plug knowledge gaps across the organisation.

Mario Therrien, who heads the funds team, told delegates at the Fiduciary Investors Symposium at Stanford University that his team plays a crucial role as a manager of knowledge for CDPQ.

“Knowledge for us is a lever of value creation,” Therrien said. “It is important for our team to understand the knowledge gaps of the organisation, and while we better understand these knowledge gaps we work with partners and funds to see how they can help us fill those gaps.”

He said gaps arise within a pension fund not only from a lack of resources, skills, or ability to scale, but also from a lack of innovation.

“Knowledge gaps can also be explained by the challenge of boards to embrace innovation,” he said. “Sometimes it might be more complex to bring innovation in large firms, so we become the group, the engine of connectivity with these funds, to see how we can import innovation within the pension plan.”

Thierren’s team actively spends time with the fund’s internal teams to understand where the knowledge gaps are. And then it meets with GPs to understand how they have approached those issues – for example, implementing data science and AI within their own company.

“This allows us to go faster and avoid some of these land mines,” he said. “We organise sessions with these groups with a specific agenda and bring our internal specialists to that. This is what is most important for us.”

The funds team invests about 15 per cent of assets, or C$70 billion, across about 150 partners in public equity, private equity, venture, credit, and hedge funds.

“We do funds for the risk adjusted returns given by the fund managers but also it’s a complement to what we do internally,” Therrien said.

“In private markets one of the theses is to be able to access co-investments we use funds because we really feel we can learn a lot from them, there is a lot of sharing of intelligence. Using what they have to offer outside the risk adjusted returns is key here.”

The funds team of about 50 manages all the external manager relationships centrally and covers quantitative analysis, portfolio construction and investment and operational due diligence. The investment due diligence team is separated into public and private assets to preserve a minimum level of expertise for the team that evaluates and underwrites the managers. Ultimately the fund is looking to hire external managers to complement what it manages internally but there is some overlap and creative tension can arise.

“Usually we use the external funds to expand our bandwidth and be able to scale, that’s really important at our size,” Therrien said.

“But there is a bit of a creative tension between the external and internal managers. It is good to have that but if that creative tension is pushed too much it becomes very toxic. It is my role to make sure we manage that tension among our teams. As long as we understand that we are all in it together to build the best portfolio and there is a lot to gain and learn from the external funds.

“We connect external managers with internal managers, we travel to see our external managers with our internal managers around the world so they understand they can only become better as we are building this relationship.”

Elements of success

Using external managers helps innovation and creativity, builds breadth and scalability and brings new ideas to the internal teams. It also allows for a high level of customisation which Therrien said is particularly prevalent in capital solutions and lending to businesses where opportunities don’t fit neatly into existing asset classes.

It also works well in opportunities around climate change where meeting objectives is highly customised.

“We are very particular as to what we are looking for in a GP, which is why we have so many,” he said. “More and more it’s about finding the skill-set, platform and infrastructure and what they have to offer. When we find the skill-set and transform that into something we would like to have, then it is all about the benchmark and how you pay for that customised portfolio of strategies.”

For the model to work Therrien stresses it is important for the tone to come from the top.

“From the get-go when we created this large funds team at CDPQ about four years ago, the tone came from the top,” he said.

“It was important for our CEO and executive team that we decided to work like that and that it was the best way to execute our strategy with external funds.”

Partnership is a two-way street and Therrien says pension funds need to show managers they will be invested for the long run and be patient about the relationship.

“We need to enter into discussions on what is the strategic orientation and how the manager or fund can play a role and being able to give feedback is important,” he said.

“Partnership has to come from the top, it’s not easy and should not be easy. When it comes from the top, the organisation becomes more focused on the long-term relationship instead of being so fixated on performance all the time.”