Sovereign Academy 2019: Transformation, Transparency and Technology
Sovereign Academy 2019: Transformation, Transparency and Technology
September 2019
By Lawrence Langenhan
Senior professionals from some of the world’s largest sovereign wealth funds, public pension funds and central banks will join us in London this September for the 9th BNY Mellon Sovereign Academy.
The Sovereign Academy has become one of our global flagship events for official institutions. Over the years, it has attracted a successively larger audience, who attend the event to network, share insights and hear industry experts, peers and BNY Mellon specialists discuss trends and challenges that are top of mind for their organisations. This year’s participants are once again diverse, representing over 25 institutions from Europe, the Middle East, Africa, Asia and North America.
Whilst our cohort has historically represented middle and back office functions, such as operations and technology, we have seen greater participation from the front office in recent years, with portfolio managers and investment analysts in attendance. This, in part, reflects the variety of topics on the agenda. It also mirrors the growing pressure many official institutions are under from a governance standpoint.
Impact of Increased Assets Under Management
According to the Official Monetary and Financial Institutions Forum (OMFIF), global public investors had over $37 trillion in assets under management at the end of 2018, a 3.7% increase from the year before1. As they have grown in size and sophistication, they have ventured further afield, investing in more complex and illiquid asset classes.
Real estate is now the anchor of many institutions’ portfolios. While many of the larger sovereign wealth funds have well-established direct investment capabilities, other types of institutions, such as public pension funds, which are bound by tighter rules and restrictions, have lobbied for greater flexibility as they look to increase their share of real assets. Across the alternative investment spectrum, sovereign funds are now turning towards private debt, which has the potential to offer higher returns, as well as diversification benefits.
As assets under management have grown, so too has pressure from investment committees to provide greater transparency into the drivers behind performance. This ties into official institutions’ desire to build more robust middle and back office capabilities and ensure they have the data they need to drive portfolio growth and identify efficiencies. The range of participants is then unsurprising, as the front, middle and back office work more closely together to facilitate better investment decisions.
As we turn to the future, sustainable investing will grow in importance. It is already on the radar of many official institutions, who are becoming increasingly aware of the risks posed to portfolios of failing to account for environmental, social and governance (ESG) factors. Climate change is possibly the most pressing threat, but other environmental, social and governance issues, including energy usage, business practices, community relations and transparency, are also important. Many institutions have begun to mobilise to promote ESG-conscious investment practices. This shift is part of a bigger transition that is having ripple effects across the institutional investor landscape. Measuring and monitoring non-financial performance is a growing priority for asset owners globally.
Highlights of our 2019 Sovereign Academy
Under the umbrella themes of Transformation, Transparency and Technology, the BNY Mellon Sovereign Academy will explore the topics outlined above, as well as other developments. As always, the agenda aims to strike a balance between being educational and thought-provoking. Our goal is to deliver practical and informative content to support attendees in their day-to-day responsibilities, as well as facilitate broader industry debates. Highlights of this year’s CPD2 accredited programme include:
The big picture: macroeconomic trends and geopolitical developments
Shamik Dhar, Chief Economist, BNY Mellon Investment Management, Simon Derrick, Chief Currency Strategist, BNY Mellon Markets and Harvey Twomey, Managing Director, BNY Mellon Markets, will assess the current state of affairs in geopolitics and macroeconomics, exploring which trends – from the looming threat of recession to emerging market volatility – will become realities of the next decade.
The changing landscape for asset safety
With assets in over 100 markets and across multiple sub-custodians, asset safety is at the core of BNY Mellon. Beatriz Molina, Head of Network Management, will address the changing expectations of global custodians. She will outline how we are evolving in response to regulatory developments and advances in technology and automation, whilst honouring our clients’ primary requirement of their custodian: to be a strong, safe and resilient partner.
Sovereign institutions and ESG investing
Our ESG panel – featuring Danae Kyriakopoulou, Chief Economist at OMFIF, Gert-Jan Sikking, Senior Responsible Investment Advisory at PGGM and Joshua Kendall, Senior ESG Analyst at Insight Investment – will assess how official institutions are currently approaching ESG and the potentially transformative role they can play scaling up sustainable investing globally.
BNY Mellon services a broad range of official institutions. We have a long heritage in the segment, having established our first central bank relationship in 1914. We recognise the strategic importance of these institutions – in maintaining economic stability, safeguarding wealth for the benefit of future generations and providing stable retirement incomes to public sector employees – and we are committed to their ongoing success.
1Source: OMFIF Global Public Investor Report 2019
2Continuing Professional Development