The Pensions Asset Allocation Summit

All Day Conference
Plaisterers’ Hall, One London Wall, London

Tuesday 4^th June 2024

09:00 – 19:30 BST

Sponsored by

Maximising the Performance of Pension Plan Assets

The asset allocation decision is by far the greatest contributor to overall investment performance in large pensions portfolios. This is true both on a passive basis and on an active basis, due respectively to diversification benefits and the fact that return opportunities between asset classes tend to exceed those within them.

Asset allocation theory and practice has evolved significantly over the years, both in response to new thinking and to events and shocks in the world investment markets. Some of the major thought leaders in asset allocation, together with board members of many of the largest UK pension funds and global investment firms, will come together to determine how well asset owners are harnessing the most powerful investment strategy of them all, and the factors that will ensure greater performance outcomes in the future.

In common with all SGPE conferences, the event will attract a very large number of senior pensions executives, with a ratio of asset owners to managers and consultants of at least three-to-one among the delegates. The conference will be highly interactive, with free and frank exchanges of views, a focus on original and thought-provoking content, and with participants encouraged to engage and contribute throughout.

Keynote Speaker

Agenda

Morning

Afternoon

Morning Session
*Devil’s Advocates Panel* Sally Bridgeland, Non-Executive Director, PIC & RSA Andy Cheseldine, Chair of the Board of Trustees, Smart Pension Tannaz Rastegar, Chair of Events Committee, NextGen Pensions
A panel of three Devil’s Advocates will be on duty for the course of the morning/ afternoon. They will pose stimulating questions to the conference speakers when invited to do so by the Moderator in each session.
09.00 – 09.10	Welcome & Introduction Chair: Stephen Glover, Founder & Director, SG Pensions Enterprise
09.10 – 09.45	Presentation: Asset Allocation – Past, Present & Future Rob Arnott, Founder & Chairman, Research Affiliates Rob Arnott is recognised as a global leader in asset allocation research and practice, and is also known as the “Godfather of Smart Beta”. He will describe the importance and experience of asset allocation strategies for pension plans over the last 30 years, how they have evolved over that time, and propose the key ingredients for an optimal asset allocation approach in the current environment.
09.45 – 10.25	Panel Discussion: Asset Allocation Trends Across UK Pensions Moderator: Charlotte Moore, Freelance Journalist, Independent Lucinda Downing, Investment Strategist, AON Gordon Ross, Chief Investment Officer, LGPS Central Mark Thompson, Chair of the Trustee Board, M&G Pension Scheme Mark Walker, Chief Investment Officer, Coal Pension Trustees Speakers, including leaders of Local Government, UK Defined Benefit and Defined Contribution schemes, will discuss how their asset allocation strategies are evolving in response to the global economic backdrop, advances in portfolio construction, recent market developments, changes in the policy and regulatory environment, and practical considerations such as de-risking priorities and cash flow considerations for the LGPS and corporate DB schemes especially.
10.25 – 10.45	Presentation: The Changing Role of Fixed Income Guillermo Felices, Global Investment Strategist, PGIM Fixed Income Fixed Income has traditionally played an anchor role in asset allocation strategies, providing a secure income and risk reduction benefits. However, years of rock bottom rates during QE gave rise to enormous innovation in fixed income products towards more return-seeking, duration-neutral approaches, while funding imperatives for DB funds prompted dedicated solutions to reduce risk and maintain solvency, notably LDI. As a consequence, the fixed income toolkit is now immensely more varied and versatile than in the past. Meanwhile Corporate Bonds was the top choice asset class in which UK pensions funds plan to increase their weightings in the SGPE 2024 Investor Sentiment Survey, with Government Bonds third. Our speaker will discuss the outlook for several fixed income strategies, both from a return and risk perspective, and posit how these can best be deployed in asset allocation for the various types of pension scheme.
10.45 – 11.10	*Networking Break*
11.10 – 11.30	Interview: A Canadian Perspective on Asset Allocation Benn Mikula, Chief Executive Officer, Cordiant Capital The Canadian pensions system has long adopted a clear return-focused approach to turn savings into wealth. This model has been demonstrably successful because of the freedom to allocate assets towards the best return opportunities, and the inclination to invest in decades, rather than in years. This has led to substantial investment into infrastructure, real assets and private equity, among other high-performing assets. By contrast, UK pension funds – both DB and DC – face several challenges in pursuing similar goals, ranging from regulatory impediments, investment vehicles and structures, and a palpable risk-averse culture. As things stand, retired Ontario teachers likely benefit more from long term UK growth opportunities than British savers themselves. Our speaker will confront this anomaly and discuss the lessons he believes can be learned from the Canadian experience.
11.30 – 12.10	Roundtable Discussions: The Optimal Asset Mix Roundtable Facilitator: David Adkins, Chief Investment Officer, Lloyds Banking Group Pensions Roundtable Moderators: Jason Fletcher, Former CIO, London CIV Mark Hedges, Trustee Director, Nationwide Pension Fund Monica Ho, Senior Investment Manager, Lloyds Banking Group Pensions Veronica Humble, Chief Investment Officer, Cushon NatWest Martyn James, Director of Investment, NOW: Pensions Toby Nangle, Contributing Editor, Financial Times Sofia Perkonigg, Trustee Director, UBS Pension Fund Kerry Foxall, Senior Investment Consultant, XPS Pensions Group Mark Tennant, Trustee, Country Landowners Pension Fund Paul Wales, Head of Corporate Pensions, Virgin Media O₂ Alan Wilde, Chief Investment Officer, Trafalgar House Following a scene-setting introduction, a Moderator at each table will lead a discussion on what delegates consider to be the optimal asset mix to ensure the best risk-adjusted performance for their pension plan over the long term, taking account of the different priorities and constraints for the LGPS, DB and DC schemes. Several of the moderators will be called upon to summarise their conclusions to the overall conference.
12.10 – 12.50	Panel Discussion: The Promise of Private Markets Moderator: Mark Thompson, Chair of the Trustee Board, M&G Pension Scheme Debbie Fielder, Deputy Head, Clwyd Pension Fund Ian McKinlay, Director – Pegasus Investment Services, Law Debenture Padmesh Shukla, Chief Investment Officer, TfL Pension Fund There has been much recent debate about the role of private markets and illiquid investments in UK pensions portfolios. As open DB schemes, LGPS funds have the clearest ability to embrace illiquids, given their higher risk tolerance and long-term investment horizons. Many DC schemes have been considering how to incorporate private assets, against a backdrop of daily dealing requirements and charge cap constraints. Closed DB plans have largely forsworn these investments in keeping with a de-risking agenda, though some change is afoot as much improved funding positions cause more schemes to run on and postpone risk transfer strategies. Asset owners and key advisers will discuss the allocations they are making to private markets, now and in the future, and explore the main opportunities and risks associated with this asset class.
12.50 – 13.00	Devil’s Advocates’ Summary The Devil’s Advocates will give their summary of the main debating points, conclusions and action points from the morning session.
13.00 – 14.15	*Lunch*

Afternoon Session
*Devil’s Advocates Panel* Robert Branagh, Chief Executive Officer, London Pensions Fund Authority Joanne Donnelly, Board Secretary, LGPS Advisory Board Denise Le Gal, Board Chair, Brightwell
A panel of three Devil’s Advocates will be on duty for the course of the afternoon. They will pose stimulating questions to the conference speakers when invited to do so by the Moderator in each session.
14.15 – 14.55	Panel Discussion: DC Asset Allocation Strategies Moderator: David Porter, Chair – Master Trust Working Group, PASA Sharon Bowles, Baroness Bowles of Berkhamsted, House of Lords Andy Cheseldine, Chair of the Board of Trustees, Smart Pension Richard Hickman, Managing Director – HVPE, HarbourVest Dan Mikulskis, Chief Investment Officer, People’s Partnership The great majority of UK workers will depend on their DC savings for their retirement needs. Therefore, it is critical that asset allocation strategies at DC plans deliver maximum appropriate risk-adjusted performance over the long haul. An expert panel will debate the particular challenges of implementing a broadly diversified investment strategy for a DC plan. The panel will explore ease of access to investment opportunities, and how fund building constraints restrict the goal of achieving better member adequacy. Is it now time that, as asset pools become larger and VFM guidance is adopted, investment rules enable commitment to a broader range of assets? And what are the drags of well-intentioned oversight and the effects of the government’s own investment agenda on optimal asset allocation?
14.55 – 15.15	Fireside Chat: Investing for the Energy Transition Moderator: Marian D’Auria, Global Head of Risk & Sustainability, GFG Alliance James Gloak, Lead Product Strategist – Sustainable Investing iShares EMEA, BlackRock Guido Giese, Global Head of ESG & Climate Solutions Research, MSCI Many companies in sectors with higher carbon emissions are undergoing transformations, and their efforts play a critical role in the process of decarbonisation. As investors plan their decarbonisation journeys, many are looking for investment solutions that allow them to stay invested in sectors – like energy – which may have higher carbon emissions today but remain crucial to the transition to a low-carbon economy. Our expert speakers will discuss what transition means for asset allocation strategies, the opportunity it presents, and how they partner effectively with clients on their investment journey.
15.15 – 15.55	Panel Discussion: The Transformative Impact of RI on Asset Allocation Moderator: Marian D’Auria, Global Head of Risk & Sustainability, GFG Alliance Sandra Carlisle, Head of Responsible Investment, USS Jason Fletcher, Former CIO, London CIV Alistair Jones, Managing Director, Leadenhall Capital Partners The panel will discuss the challenges and opportunities that have arisen from incorporating Responsible Investment policies into pensions portfolios, especially as these have affected asset allocation strategy. Speakers will identify a number of RI strategies and investments which they believe will generate excess return outcomes, as well as consider some of the unique risks, especially among certain environmental scenarios, and debate how these can be effectively managed by LGPS, DB and DC plans.
15.55 – 16.15	Presentation: The Case for Running On UK DB Schemes Moderator: Ian McKinlay, Director – Pegasus Investment Services, Law Debenture Callum Duffy, Senior Solution Designer, Insight Investment Hannah Ni Riain, Senior Solution Designer, Insight Investment Running on UK DB schemes for the long term could lead to wide-ranging benefits for members, sponsors, and the UK economy overall, not least through continued support for the gilt market. But without significant changes, many will continue to target insurance buy-outs. This session will explain the benefits of running on, the changes needed to enable and encourage pension schemes to do so, and the implications if nothing changes. Attendees will be equipped to communicate these points to stakeholders and policymakers to support a positive outcome for all.
16.15 – 16.40	*Networking Break*
16.40 – 17.20	Roundtable Discussions: Best Governance Practice Across the UK Pensions Industry Roundtable Facilitator: Shalin Bhagwan, Chief Actuary, Pension Protection Fund Roundtable Moderators: Rachel Brougham, Trustee Executive, BESTrustees Martin Collins, Client Director, Vidett Adrian Furnell, Secretary to the Trustees, Uniper Energy Ruari Grant, Policy Lead – DC & Master Trusts, PLSA Chris Hogg, Chief Executive Officer, National Grid UK Pension Scheme Andrew Krousti, Head of Pensions, Capgemini Ian MacRae, Finance Pensions Investment Manager, Jaguar Land Rover Ian McKinlay, Director – Pegasus Investment Services, Law Debenture David Porter, Chair – Master Trust Working Group, PASA Mark Thompson, Chair of Trustees, M&G Pension Scheme Following a scene-setting introduction, a Moderator at each table will lead a discussion on what delegates consider to be the key ingredients of good governance for LGPS, DB and DC schemes, how the priorities may differ between them, and how they will impact asset allocation strategy and performance. Several of the Moderators will be called upon to summarise their conclusions to the overall conference.
17.20 – 17.30	Devil’s Advocates’ Summary The Devil’s Advocates will give their summary of the main debating points, conclusions and action points from the afternoon’s session.
17.30 – 17.40	Chair’s Closing Remarks
17.40 – 19.30	*Food & Drinks Reception*