Seminar: Timely Topics for Today’s Business World Mr. Bernstein Major Asset Pools November 2014.

Seminar: Timely Topics for Today’s Business World

Mr. Bernstein

Major Asset Pools

November 2014

2


Mr. Bernstein

Major Types of Asset Pools• Pension Funds• Sovereign Wealth Funds• Endowments• Foundations• Insurance Companies• Corporations• High Net Worth Individuals• Retail Investors

3


Mr. BernsteinMajor Types of Asset Pools• Pension Funds• Sovereign Wealth Funds

– Owned by state, often result of foreign currencies due to buildup of current account surplus– Long-term time horizon; often no explicit liabilities or benchmarks, ability to take risk– Often run by Central Bank of state, policy set by board or committee– Few governing laws– Examples: GIC (Government of Singapore), KIA (Kuwait Investment Authority)– Current Issues: Governance, Investment in deleveraging world

• Endowments• Foundations• Insurance Companies• Corporations• High Net Worth Individuals• Retail Investors

4


Mr. BernsteinMajor Types of Asset Pools• Pension Funds• Sovereign Wealth Funds• Endowments• Foundations

– Purpose is to accept gifts and manage assets which fund a charitable institution– Long-term time horizon with some need for yield and capital preservation– Typically a Corporation or Trust with a Board of Directors and an Investment Committee– Minimum annual distribution of 5%– Examples: Bill and Melinda Gates Foundation, Matawan-Aberdeen Educational Foundation– Current Issues: Generating returns in low-yield environment without taking excessive risk

• Insurance Companies• Corporations• High Net Worth Individuals• Retail Investors

5


Mr. BernsteinMajor Types of Asset Pools• Pension Funds• Sovereign Wealth Funds• Endowments• Foundations• Insurance Companies• Corporations

– Working Capital required for company operations or excess cash awaiting deployment– Usually short-term investors with emphasis on safety, liquidity and yield, in that order– Managed by Treasury department of company, often reporting to CFO– Examples: Verizon, JCP&L, Hess– Current Issues: Maintaining safety of capital

• High Net Worth Individuals• Retail Investors

6


Mr. BernsteinMajor Types of Asset Pools• Pension Funds• Sovereign Wealth Funds• Endowments• Foundations• Insurance Companies• Corporations• High Net Worth Individuals

– Individual or Family with investible cash, typically defined as $1mm-$10mm or more– Investment goals can vary but commonly include retirement and estate planning– Tax-efficient structures– Examples: Over 3mm families in the US– Current Issues: Financial situation of children and grandchildren

• Retail Investors

7


Mr. BernsteinMajor Types of Asset Pools• Pension Funds• Sovereign Wealth Funds• Endowments• Foundations• Insurance Companies• Corporations• High Net Worth Individuals• Retail Investors

– Individual or Family with investible cash, typically defined as <$1mm– Investment goals can vary but commonly include retirement and college education– Often held in brokerage accounts and/or mutual fund investments held directly– Examples: “Main Street”– Current Issues: Retirement, safety of principal

Seminar: Timely Topics for Today’s Business World Mr. Bernstein Major Asset Pools November 2014.

Documents

Transcript of Seminar: Timely Topics for Today’s Business World Mr. Bernstein Major Asset Pools November 2014.