Who
holds the power in financial markets? For many, the answer would probably be
the large investment banks, big asset managers, and hedge funds. These are the
organizations that are in the media's spotlight and whose leaders and employees
command outsized salaries and bonuses. They are the supposed leading edge of
global finance and their power seems almost absolute, even as questions abound
about their social and economic utility. But more and more asset owners are
confronting the status quo, the power to exact high fees and the focus on the
short term. The New Frontier Investors
chronicles the rise of this new group of long horizon asset owners that
includes some of the world's largest pension funds, sovereign wealth funds, and
endowments. These asset owners are driving the business of asset management to
a new frontier by retaking responsibility of the end-to-end management of their
investment portfolios and by re-conceptualizing investment decision-making.
The
lessons illustrated in The New Frontier
Investors fly in the face of conventional wisdom, which has it that these
asset owners are at a disadvantage to the private sector fund managers and
other service providers. These asset owners are supposedly not able to attract
talent nor do they have the organizational capabilities to compete. That many are
located far from the markets in which they invest only exacerbates the problem.
But this is incorrect. This expanding group of asset owners is learning how to
make the most of their scale and long time horizons, finding new ways to
attract talent, to collaborate, and to build greater alignment with the users
of capital. They are not at a disadvantage. They are at an advantage.
The New Frontier
Investors
is essential reading for anyone wanting to see a change in global financial
markets and the professionalization of asset owners worldwide, from public
pension funds and sovereign wealth funds to foundations and endowments. It is
thus required reading for the senior executives and employees working in the
field of beneficiary institutional investment, as well as government officials
and others that have a stake in the design and governance of beneficiary
financial institutions and long-term capital.
