Access and analysis of unique data is key to CPP Investments’ active equities team creating “one of the most sophisticated fundamental shops in the world” head of the team Frank Ieraci told the Fiduciary Investors Symposium at Stanford.

Unique insights and data are the driving force of CPP Investments’ fundamental active equities team as it identifies what will really  will drive a company’s stock price.

“The unique insight comes from when you have conducted research and you end up with a conclusion you think is meaningfully different to what you think is priced in,” Frank Ieraci, global head of active equities and investment science at CPP Investments told the Fiduciary Investors Symposium at Stanford last month.

Within the C$75 billion ($54.6 billion) fundamental active equities portfolio, empirical analysis is crucial as CPP continues to push for evidence to back its investment thesis.

“We measure everything we do very explicitly and granularly and frequently and evaluate that over time, and evaluate the original thesis against that,” Ieraci said. “That is increasingly driven by more data and analytical techniques, and that forecast is more real-time and continuous and more probabilistic, and that distribution of outcomes is being compared to what we see in the market and played out in the market to see what is the degree of mispricing.”

Ieraci says the C$575 billion CPP is bringing more data and technology to the process and, like other investors, started to deploy different data, such as credit card data. In addition, it has the advantage of being a large, diversified investor and so can use proprietary data and insights from its private company investments.

“We also take a really focused approach at trying to find data that will answer the specific question we are trying to answer,” he said, pointing to a recent example where the purchase and analysis of some unique data revealed its hypothesis on the company was wrong, and it didn’t invest.

Ieraci said another unique element of the fundamental approach is the team’s willingness to experiment.

“We have an ambition to be the world’s top performing institutional investor, and that means we have to push ourselves. And that means we experiment with novel forms of data or technology as it relates to decision making, and that is a key part of the journey we are on with active equities,” he said.

Technology is essential to the fundamental analysis, with technologies inhouse spanning machine learning, large language models, newer forms of AI, deep learning and transfer learning.

“The technologies might not be unique but how we are trying to apply them tends to be unique,” Ieraci said. “Many investors are using the same technologies we are, the difference is do they do it to the same extent, how committed are they to it, and do they have a platform that allows them to think and act like a long-term investor?”

Back in 2018 Ieraci predicted that fundamental analysts would not use Excel but would need to code and use Python. In line with that prediction, he said the skills needed today are very different to the past.

“The talent we need today is changing,” he said. “Fundamental analysists were always data scientists, like an investigative journalist trying to understand what mattered and then hunting for the information to validate it. We were always looking for data to help us and today the amount of data we have and the ability to analyse it with sophisticated tools has changed, which has changed the skills we need in our folks. Increasingly today I want people who are programming and managing large sets of data.”

Ieraci said the fundamental active equities long-short portfolio has delivered about 150bps at around 4.5 per cent risk on average over the past five years.

“We are on a journey. We are looking to create one of the most sophisticated fundamental shops in the world. What we are doing at CPP is very different from how fundamental investing was done over the last 50 years.”

 

Nobel Prize-winning economist Myron Scholes told the Fiduciary Investors Symposium at Stanford University that the focus of asset owners needs to shift from measuring risk to managing it, to avoid the downside while capturing the upside and allowing compounding to do its thing.

Asset owners need to move away from merely measuring risk to adopt a mindset of actively managing risk across different time periods and across different market conditions, the Fiduciary Investors Symposium at Stanford University has heard.

When investors talk about risk they often mean volatility, but volatility is not a sensible measure of risk, according to Nobel prize-winning economist Myron Scholes.

“We use volatility as a measure of risk. But volatility is a crazy measure of risk,” Sholes said.

“If I tell you we have upside volatility, [that] everything is going to be good but it’s going to be very volatile on the [upside], you want that, or no? Sure you want that – everyone wants upside vol; it’s downside volatility we don’t want. In life, you don’t want to miss the upside.”

Scholes, whose Nobel prize was awarded for his work jointly developing the Black Scholes model for pricing options, told the Fiduciary Investors Symposium that actively managing risk even over short time periods is critical because just as short-term returns compound to long-term returns, so does risk over short timeframes compound to long-term risk.

And diversification is not an adequate way to control risk, Scholes added, even though diversification frequently is referred to as the only free lunch in finance.

“The only reason it’s free is because when you need it, it ain’t there,” Scholes said. “You know, basically, at times of shock, everything moves together, right?”

The key, Scholes said, was to manage downside risk while benefitting from the upside, to support compounding. Scholes said he was keen to move the discussion on risk away from means and averages and measuring everything relative to benchmarks.

“That’s what I want to do – let’s move away from the relative components or averages and thinking about averages to think about compound return only,” he said.

“How are we going to get better measures of compound return? What is the risk of compound return – you know, downside risk, upside risk. How you get a better compound return experience?

“And the problem with compound return is it takes a long time to see that convexity, to see the ability with a convexity that we’ve grown in our portfolio and had a better experience for our pension holder.

“So moving the idea away from thinking about risk as second-order to first-order and primary, and averages or returns are second order. That’s the way I think we can increase the value of our portfolio.”

Scholes said the focus needs to shift to how to better measure compounding.

“Can we do bootstrapping?” he said. “Can we look over time, three-year, five-year returns and bootstrap them to figure out what the risks are of these various strategies we have and think about what’s happening there, to enhance our portfolio experience?

“People talk about long term: ‘Oh, we have risk over the long term’. But risk over the long term is not the correct measure. Risk on the short term, risk every period, compounds to being long-term risk, and all those things are very important.”

Wilshire managing director of client solutions Ali Kazemi said that for the better part of the past decade and a half, institutional investors have enhanced their ability to measure risk.

“That’s been very additive to the portfolio construction process,” he said.

“I think the next phase is continued expansion of the ability to evaluate liquidity in your portfolio, and to be able to pay your benefits, but also adhere to the level of risk that you want to always be maintaining via the strategic asset allocation.

“So whether it’s using leverage, whether it’s using overlays, being able to pay benefits, but also maintain a level of volatility that on a risk-adjusted basis is going to get you to that discount rate return that you need to achieve is, I think, that the next phase. We’re starting to see investors use more sophisticated tools and develop internally in some cases to better evaluate their liquidity.”

Head of investment risk for BCIMC, Samir Ben Tekaya, said that moving from measurement to management of risk is key, fundamental questions to ask first are: “What do we mean by risk, and what do we have in our portfolio?” he said.

“I can give the example of a typical pension, particularly Canadian, we have good allocation to private [assets]. And having the private there, yes, I think it changed the priority. What are the priorities? The market risk that we need to assess [or] is it maybe liquidity, as we have heard in [an earlier] panel, and we need to have this cushion there. And by having this cushion, that can help us to withstand a market downturn.

“So I think it depends on the context.

“However, from a top-down perspective, portfolio construction, if you have private assets, it’s going to be more complex, to assess the vol and to optimize this vol, let’s say; and this is something that we need to just be mindful of.”

The market has already entered the early stages of a multi-year restructuring cycle that will present many opportunities for credit providers. Researchers and investors from GIC, CalPERS and IMCO recommend some organisational changes that will ensure asset owners can make the most of those opportunities.

 The simultaneous occurrence of refinancing problems in leveraged credit markets, and the timing of the maturity wall coinciding with a soft patch for corporate earnings, means the market has already entered the early stages of a multi-year restructuring cycle.

David Geenberg, co-head of the North American investment team at SVPGlobal, said that would present opportunities in distressed debt restructuring, but also in structured capital, creative credit, and hybrid solutions.

“We think we are in for two to three years of elevated volatility, restructuring capital solutions in credit either way,” he said. “Over the next three years we will see the debt maturities of the 2017-2019 buyout deals. In the US leveraged loan market, which is about $1.5 trillion, about $300 billion of those maturities are coming up.”

Geenberg told delegates at the Fiduciary Investors Symposium at Stanford University the lower end of the loan market was particularly interesting, with the amount of loans that were rated B- and lower now four times what it was in 2017.

“Those refinancings will occur in a world where the coupons on those loans will be meaningfully higher,” he said. “The reason we say it is already here is because the potential canary in the coalmine is that low end of the loan market. Markets are bifurcated, high-yield is strong, but at the low end of the loan market you see the problems. This has implications for broader markets and opportunities in certain sectors and geographies.”

Investors and researchers on the panel from CalPERS, IMCO and GIC shared Geenberg’s enthusiasm for the private credit opportunities.

Daniel Booth, CalPERS’ deputy chief investment officer, private markets, was particularly attracted to real estate lending, rescue financing, and speciality finance as banks step back.

Grace Qiu, senior vice president, who conducts research for the total portfolio policy and allocation team at GIC, and Jennifer Hartviksen, head of credit at Canada’s IMCO, were also both favourable towards real estate and infrastructure debt.

“Private credit is a huge space with a wide range of opportunities,” GIC’s Qiu said. “The overall real estate market has seen some distress and substantial repricing because of rising discount rates. At this part of the cycle, real estate debt can be quite attractive. Outside of real estate, another space with good opportunities is infrastructure debt. In particular, the junior end, mezzanine side of infrastructure debt which provides a slightly higher yield.”

Hartviksen who manages IMCO’s credit portfolio across both private and public, said this distressed cycle will be a little different.

“There are a lot of levered loans in the market that will have recoveries well below historical levels,” she said. “Where we think there are opportunities, I would change the name ‘distressed’ to ‘tactical opportunities’: there are opportunities for good companies that have bad balance sheets. This is where the fundamentals of the company are good, but they need some sort of bridge because they are facing this maturity wall, with debt coming due in 2024. We are looking at putting in mezzanine debt that is structured as credit with a coupon or dividend return, strong documentation, there’s convenants and we also get some of the equity upside. You can get returns in the high teens to high 20s over the next few years by picking the right opportunities. That is where we are seeing opportunities in what I would call a secular development of the credit market.”

Organisational positioning for opportunities

GIC’s Qiu also made some observations on how asset owners can better prepare ahead of volatility and market discrepancy so when dislocation opportunities occur, they can access them quickly.

She said managing liquidity at the total portfolio level and understanding cashflow obligations holistically will allow for more nimble capital allocations when opportunities arise.

Similarly, as an investor heads into an environment of market distress or sell-offs, diversification, including having risk mitigators, can enhance returns and given them the confidence to then add risk.

“This provides comfort to add on risk. When there is a dislocation opportunity, you need to know if it is catching a falling knife or if it is a big bargain. A well-diversified portfolio allows you to add on risk in that circumstance,” she told delegates, adding it was important organisationally to have bottom-up teams that are ready to tap those opportunities.

“For example, an investor can have their deal teams look at secondary markets. This way, when there is distressed selling, the teams already know the flow and can quickly take action. Asset owners can also engage managers to pre-define a set of rules such that they can automatically kick into action when drawdowns exceed certain levels.”

IMCO’s Hartviksen agreed with the importance of a well thought out portfolio construction that can perform through a cycle. She said being prepared to take advantage of opportunities in the case of dislocation and being nimble will allow access to some “interesting deals”.

“We have a single global credit strategy that provides us with the ability to get exposure very broadly and be very nimble as opportunities present themselves and understand where the relative value is,” she said.

“We think about it from a top-down perspective but also from a bottom-up perspective where the fundamental analysis is on the credit side. It is really important, whether it is an investment through a GP or something we have underwritten ourselves, to understand what it is that we own. That is core to everything we do.”

Swiss pension fund Publica’s CHF 12 billion ($13 billion) listed equity allocation sits in a portfolio built on a broad universe incorporating engagement, exclusions and a factor strategy, the outputs of which are put through a climate efficient overlay. The overlay, or benchmark, has effectively reduced climate change related financial risks in the equity allocation since 2018 in line with PUBLICA’s long-term risk objectives.

The strategy is one of the most enduring examples of how benchmarks help reduce carbon emissions. It is also an example of how long-term risk management rather than legislation can drive ESG strategy. Unlike its European peers, there is no mandate in Swiss pension legislation to incorporate ESG criteria in the investment strategy of the country’s pension plans. PUBLICA’s bespoke benchmark isn’t a consequence of legislation or a target to reduce greenhouse gas emissions in the portfolio, explains Frederik von Ameln, portfolio strategist at PUBLICA in an interview with Top1000funds.com.

PUBLICA began to build its own benchmark back in 2018 after its strategic risk management processes flagged global warming as a significant source of financial risk, mandating the investment team reduce the financial impact of climate change on the portfolio. It would be a couple of years until European regulation started to kick-in and trigger the proliferation in off the shelf Paris-aligned benchmarks.

“Today the world is awash with Paris-aligned benchmarks but in 2018 none existed,” said von Ameln.

With no option but to build something for itself, PUBLICA created an investible universe by first excluding companies, either in line with mandatory exclusions (like nuclear weapons) or by dropping companies at risk of being stranded by the transition. So far, the focus has mainly been on coal on the basis that coal groups have not diversified like oil and gas companies, and only a few are still quoted.

But von Ameln stresses exclusion is always a last resort. “Once you dispose of equities you have no way of interacting with management anymore. We prefer to engage with companies and convince them to address financial risks and improve the profit in the long run.”

Next, discussion turned to what criteria should shape the benchmark. A forward-looking approach was quickly identified as key. “If you just use a company’s carbon footprint or emissions intensity metrics it doesn’t tell you anything about the future. We wanted something forward looking. Once you have forward looking data, you can make decisions.”

Elsewhere the team decided the overlay must incorporate companies both at risk and set to gain from the opportunity of climate change and selected MSCI to construct the index and niche specialised data provider Carbon Delta (since bought by MSCI) to provide the data.

Metrics in the overlay

The most important metric in the overlay is the Carbon Value at Risk of each company. Derived from three elements it comprises Policy Carbon Value at Risk (quantifying the costs a company faces associated with the transition to a net zero economy) Technology Carbon Value at Risk (representing opportunities from developing or monetizing technologies to lower carbon emissions, for example) and Extreme Weather Carbon Value at Risk, drawn from a database of company locations and facilities to the potential financial impact of adverse weather patterns.

Challenges in the data led the team to settle on another key element of the overlay. Although a company’s Scope 1 and 2 data is reasonably accurate because it can be derived from energy consumption, Scope 3 emissions are harder to measure and rely on estimates introducing inaccuracies. The Climate Value at Risk metric is similarly problematic.

“The metric is derived using a lot of assumptions which are then processed by, at times, extremely complex models. Inevitably, errors in assumptions and model errors find their way into the metrics we use to create our benchmarks.”

Cue the decision to use quantitative analysis rather than applying fundamental, human analysis to the data. A quant approach would eliminate human bias and ensure the same model framework is applied across the whole process. “At least all errors and inaccuracies are applied in a consistent way across the whole universe. We traded accuracy for consistency. While the model is likely to be subject to estimation errors, these errors are applied to all companies in a consistent way and as models and data improve over time, so should model outputs.”

Tracking error Constraints

PUBLICA has put tracking error constraints in place to limit deviations. The team is not looking for returns that are substantially different to the parent index, seeking comparable risks, volatility, and style. “It is a question of nudging the portfolio in the right direction,” he says. However, although the portfolio in aggregate trades in line with the parent index, the weight of individual index constituents in the parent index and the optimized index can differ significantly.

Perhaps von Ameln’s most important piece of advice is to recognise that benchmarks are constantly evolving. “The team are always discussing and reviewing whether new criteria should be incorporated. It’s not a revolution, benchmarks evolve. They are living beasts.”

Witness how PUBLICA recently reviewed its coal exclusions, refining the methodology. Drawing on data that revealed how much electricity groups produce from thermal coal, the team extended its exclusions to some companies. The refined methodology now differentiates between utilities selling their coal assets and those retiring them and replacing them with renewables.

Communication with stakeholders, particularly attribution and reporting, is also another vital pillar, he advises. A key area of the reporting process is that team show the overlay’s impact when it comes to reducing financial risk stemming from climate change compared to a standard cap weighted index. “You need to be able to explain what you are doing and why,” he says.

Another way this manifests at PUBLICA is the team’s ability to explain the cost incurred from coal-based exclusion. “We have designed the framework to allow us to show the investment committee the cost or profit of each type of exclusion.”

What about returns?

To date returns from the overlay reveal a mixed picture, dependent on the length of an investment, and region. “Sometimes the overlay produces a nice outperformance but sometimes it goes the other way,” he reflects.  He says the factor strategy tends to have a larger impact on performance than the overlay component in relative terms. Moreover, it will take more than 10 years to know for sure if PUBLICA’s approach has addressed the long-term risk to the portfolio.

Still, the evidence so far shows that the overlay has successfully reduced the carbon footprint of the portfolio and von Ameln expects further regulation to enhance corporate transparency and standardization, increasing data availability and quality over time.

And for as long as there isn’t a mandate in Swiss pension legislation to incorporate ESG criteria in the investment strategy of the country’s pension plans, it’s business as normal.

“Our focus remains on making sure that we address all the risks in our portfolio including climate related financial risks and opportunities.”

 

CalPERS may be reeling from another CIO departure following Nicole Musicco’s decision to leave after less than 18 months but it was business as usual at the $463 billion fund’s latest investment committee meeting. Convened a few days after her resignation to spend more time with her family in Toronto, board and staff discussed key factors shaping the $209 billion equity portfolio, CalPERS largest allocation, proof of how the systems and processes driving the giant battleship grind on despite turmoil at the top.

A key focus in the coming months will be analysing the utility of the factor weighting in the public equity portfolio which is divided between (73 per cent) cap weighted and (27 per cent) factor weighted strategies.

Although the $55.4 billion factor strategy has persistently performed in line with expectations, the team plans to look at the merits of a portfolio that was set up in 2017 through today’s prism of higher interest rates. Analysis will explore to what extent the factor weighted allocation has been a drag since it was put into the portfolio, and the extent to which the fund needs a factor weighted allocation today.

“The returns that it has delivered to date match the purpose,” Simiso Nzima, managing investment director, global public equity told the board. “The factor weighted portfolio has a beta of 0.7 so if the cap weighted portfolio is up 10 per cent, the factor weighted segment will be up 7 per cent. Its performing in line with expectations but it is really a question of whether we still have the same utility. It was put in place when the funded ratio was 68 per cent and concern that if the stock market went down, the funded ratio would fall too.”

“When the portfolio was set up rates were much lower. Now rates have gone up there may be other ways to get diversification,” added Dan Bienvenue who will step in as interim CIO following Musicco’s departure at the end of the month, just as he did when her predecessor, Ben Meng, resigned in August 2020. He told the board that the factor allocation is already being steadily reduced.

Any reduction in factor exposure could be offset by an increase in active equity investment. CalPERS has successfully built out its active allocation to enhanced index and active strategies (from 8-16 per cent) and the board heard how the fund plans to deploy additional capital to active investment to diversify the book. The vast bulk of the portfolio (84 per cent) is in index strategies.

However, any boost to internal active management would have to be accompanied by an increase in the internal team. Around 94 per cent of the equity portfolio is internally manged and adding internally-run active management strategies would require a bigger headcount and additional resources, the board heard.

Boosting active risk was one of Musicco’s key goals. During her tenure she sought to have actively manged strategies run by external managers in a culture change at CalPERS.

Nzima also warned that successful active investment could be stymied by narrow market breadth. He said the outsized dominance of large companies in equity performance can be negative for active investment because it makes picking winners more difficult. He said seven stocks have driven 2022-2023 returns, between them contributing 50 per cent of returns. Key equity risks ahead include the lagged impact of higher interest rates on economic activity, geopolitical uncertainty and elevated valuations in some segments of the markets, he added.

engagement on exec pay

CalPERS’ public equity team have a renowned voting track record, seeking to effect corporate change in line with the pension fund’s ESG beliefs around board composition, climate change and human capital management. CalPERS is also one of the few US public pension funds engaging with investee companies on executive pay. However, the board heard that effecting change around executive pay is challenging, particularly because only a handful of other European funds engage on the issue.

Average CIO pay levels at S&P500 companies continue to track higher – an  S&P500 CEO will earn on average $15 million in salary, bonus and equity a year. CalPERS has voted against 49 per cent of say-on-pay proposals in FY 22-23 – “against” 1,392 compensation committee members, holding them accountable for poor pay-for-performance alignment.

“Despite our best efforts, pay is creeping up,” said Drew Hambly, investment director at CalPERS.

“You have to wonder why employees want 40 per cent raises,” said Theresa Taylor, serving her third term on the CalPERS Board of Administration and her second one-year term as president of the board. She also paid homage to Musicco’s achievements at the helm. “I’m really sorry to see you go. People don’t recognise the challenges women face in these big roles.”

In an event driven engagement strategy that sees staff monitoring ESG issues and taking action as they occur, CalPERS has engaged with companies on issues like child labour and freedom of association. For example, staff contacted 12 portfolio companies (represented market value of $9.5 billion) following recent allegations of child labour issues. The companies blamed third party labour providers with poor labour practices.

“Our efforts have born fruit,” Hambly said.

CalPERS uses vendors to track and flag issues on which to engage, but has a limited team on the ground to follow up with engagement. It has 6000 companies in the entire portfolio and currently targets engagement with around 800 in the equity portfolio.

“We are not getting to everyone but feel strongly that the most significant names getting good coverage,” concluded Hambly, who said the five-member team is highly skilled and experienced.

 

Asset allocation is often nominated as the most important element in long-term investment performance. But the Fiduciary Investor s Symposium at Stanford University heard that no investment strategy or process can operate in a vacuum – it can’t happen effectively without operational excellence.

Operational excellence is as fundamental to maximising benefits for members as any other aspect of a pension fund, sovereign wealth fund or endowment’s activities, the Fiduciary Investors Symposium at Stanford University has heard.

A panel session chaired by Stanford Research Initiative on Long-Term Investing executive and research director Ashby Monk heard that ultimately all fiduciary investors are driven by the desire to maximise long-term returns, within the constraints of their respective organisations.

Monk said that when asked what the most important driver of long-term returns is, “most people would say asset allocation, that’s the foundation of performance”.

“Everybody refers to the lovely seminal paper in 1986 by Brinson where we learned that…93 and a half percent of the variability in quarterly performance is a function of asset allocation,” he said.

“Some people might go another direction and say portfolio implementation. Are we direct? Can we get better alignment of interests? Can we get deep alignment with our managers, some people might say security selection, all of these are often highlighted as components of performance.

“And I think we’re here on this panel to say, none of that happens in a vacuum. All of that is a function of your organizational capabilities.”

Critical ingredients for success

According to Monk the key ingredients of a successful organisation are a production function, people, process, information, and capital. He described these as elements of the organisation’s identity.

“You all have people that are using information in the context of a process to invest your capital,” he said. “It’s very simple, every investor does it. But I would argue that no two investment organizations in the world are the same.”

Australian Retirement Trust chief investment officer Ian Patrick said the merger of Sunsuper and QSuper in February last year was clearly “a bet on scale” and brought two entities together with the aim of improving outcomes for fund members through improved operational efficiencies. He said this included lower investment fees and better services.

“Those are all delivered,” Patrick said. “The ability to invest in capability that comes from scale, before you even get to investments, is very real. On the investment front, [there is] the capability to deploy larger cheques in more meaningful deals; and then [to] invest in the underlying technology, and other tools that will improve the investment process.

“I think those are all benefits from scale. Are there disadvantages? Absolutely. We may never be a meaningful investor in Australian small caps going forward.”

Patrick said the merger had “instant positives in terms of bringing together a collection of capabilities that each entity might have aspired to in its own right but would have been on a path to build”.

“But with that comes the challenge, or the opportunity, of two processes, two cultures, two governance mechanisms, you name it,” Patrick said.

“The important thing for us, I think, in the journey so far and that will carry us into the future is the fact that at the core, the identity is very strong, the identity of super, which is all about the end member. Delivering for the beneficiary binds everybody, and that’s particularly important.”

Franklin Templeton Advisory and Thought Leadership vice president Sandy Kaul said most organisations are slow to fully grasp the potential of new technology and the impact it can have on driving operational excellence.

“Technology is constantly redefining what we are able to do, and how we are able to do it.,” Kaul said.

“And we have seen this over and over in our own careers.

“So, when we say technology is [at] the heart of what is driving this industry, and you think about operational excellence, my biggest learning has been the people are very bad at taking advantage of what the technology can do. They bring in the right technology, and then they do the wrong thing to embed it into their processes, to update their people and to update their governance.”

Kaul said organisations also need to recognise that there is wisdom in crowds, and that they are not the sole repositories of knowledge or insights.

“In everything we’ve heard so far in the conference, I didn’t hear any discussion about the wisdom of crowds, about the ability to tap into community sentiment,” she said.

“These are all factors that are reshaping society. And we completely ignore that any of this is happening, because it doesn’t fit with the prescribed notions of our expertise. But our expertise is being very quickly democratized, through technology and through social media.

“The days of thinking that the crowd is dumb money is not really accurate,” Kaul said.

Kaul said access to information is becoming instantaneous and organisations can glean insights on hope to improve operational efficiency from understanding crowd dynamics. She said technology is allowing organisations to synthesise vast amounts of knowledge from often disparate fields.

“So, we need to rise to the challenge to think about what does this mean for how I think about what my portfolio is actually able to deliver,” she said.

“And I think that that is where we are seeing huge potential come in. Because what are we doing in this room, we are creating a community, this community. A lot of the value that you’re going to take away from this conference isn’t going to be necessarily only from the presentations on the stage, it’s going to be from the conversations you’ve had with other people in this room.

“What you now need to understand is that that community has expanded exponentially and has become virtual, and we need to join in those communities as much as we need to join in the communities physically in this room.”