There is a paradigm shift happening in the industry, brought about by a widening of organisational purpose. Organisations need to adopt a much more agile, substantive and socialised change model than before. Achieving this requires a commitment to think through issues respecting all material systemic factors influencing investment industry outcomes to make deeper and better connections. The associated systemic risks increasingly require investors to consider the impact of their decisions, alongside risk and return. One of the resultant trends is a move towards a total portfolio approach rather than persisting with traditional asset allocation models. This hub also contains research on governance, stewardship and 3D investing, available in comprehensive research papers, short Investment Insight articles, podcasts and videos.
The sustainability transitions at investment firms is being driven by the slow moving but unstoppable ESG train, which is now rapidly picking up pace.
Roger Urwin
Research and further content
Total Portfolio Approach (TPA) content hub
Total portfolio approaches have been evolved as a more ‘joined up’ investment philosophy that results in a more streamlined approach to portfolio construction. This hub is a collection of publications and other content on TPA.
Global Asset Owner Peer Study on best practices
The Global Asset Owner Peer Study on best practices is an examination of 26 prominent asset owners from around the world, conducted in partnership with Future Fund.
Pensions aren’t what they used to be… a glimpse into the future
In this paper, we discuss what a good pension looks like, if we can count on future returns and hence, what might the near- and long-term future of pension design look like.
Explore Institute resources to learn about concepts, tools, and real-world applications of systems thinking. Discover how this approach can transform the way we perceive and address the challenges of our interconnected world.
Research journey
We see progress on sustainability as intrinsically intertwined with organisational development and governance. Our organisations need to be fit for the future. In 2016, following a benchmarking study we wrote Smart Leadership, Sound Followership, which explores the challenges of being an asset owner today and the increasingly complex future as they navigate the “Great Acceleration”. This was followed up with the The asset owner of tomorrow publication, which explored these themes in more depth. Thereafter we produced The asset manager of tomorrow which identifies six attributes as critical requirements to asset manager success.
Governance
Investments: Risk, Return and Impact
Focus on: Asset allocation
Most asset owners have kept to a basic benchmark-oriented model in which their boards have ownership of investment policy via a policy portfolio and implement using outside investment managers. But with more complex goals coming from these paradigm changes (like net zero), the shift to an outcome-oriented model is increasingly attractive alongside making increases to internal capability to manage in a more streamlined, sophisticated and – most of all – holistic way. The test of this approach is at the total portfolio level – where every investment contributes to the joint goals of maximising risk-adjusted returns and alignment to net-zero commitments. This total portfolio approach methodology (TPA) has been developed by a number of leading asset owners.
Strategic asset allocation measures a lot of things, but not the most important things.
Roger Urwin
