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Showing posts from July, 2020

Big Tech Crushes It. Now What?

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Yun Li and Fred Imbert of CNBC report the Dow closes 110 points higher amid Big Tech rally, Apple soars 10% to a record: Stocks wiped out earlier losses and closed higher on Friday as the biggest tech companies and market leaders — Amazon, Apple and Facebook — soared after posting stellar quarterly results.The Dow Jones Industrial Average rose 114.67 points, or 0.4%, to 26,428.32 after dropping about 300 points at its low of the day. The S&P 500 climbed 0.7%, or 24.90 points, to 3,271.12, while the Nasdaq Composite gained 1.4%, or 157.46 points, to 10,745.27, led by a 10% jump in Apple shares.The major equity averages also wrapped up the month of July with solid gains and posted their fourth straight positive month. The S&P 500 gained 5.5% in July,  while the Dow and the Nasdaq Composite rose 2.3% and 6.8%, respectively.
Still, a few negative headlines capped the gains in the broader market Friday:Emergency unemployment benefits are set to expire Friday and Congress an…

Can States Afford Rising Public Pension Debts?

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Andrew Biggs, a resident scholar at the American Enterprise Institute and contributor to Forbes, wrote a comment examining whether states can afford rising public pension debts:
Most observers are aware of the rising cost of state and local government employee retirement plans, driven by benefit increases, overoptimistic investment return assumptions and failures by governments to make full contributions as required. But in a recent study, the National Conferences of Public Employee Retirement Systems (NCPERS) cites federal government data to argue that public sector pensions remain easily financially sustainable by state and local governments. In fact, though, those same federal data show that public pension debt is rising significantly faster than the growth rate of the economy, with pension liabilities doubling as a percentage of GDP over the past three decades. Worse, state and local government pensions are failing even to fully fund the new benefits earned by employees e…

OMERS CPO on the Importance of Leadership

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In the first installment of their "Leadership Under Fire" series, Satish Rai, Chief Investment Officer, and Annesley Wallace, Chief Pension Officer, chat about the impact of COVID-19 and the importance of leadership during unprecedented times. Mr. Rai writes this on LinkedIn:
Recently, I had the pleasure of sitting down with leaders from OMERS and our portfolio companies to discuss the impact of COVID-19. Amid a global pandemic, a slowing economy and what can often feel like an uncertain future, we discussed lessons learned and the importance of true leadership when it matters most.

While each leader had unique experiences and insights to share, there were a number of recurring themes, including the importance of having crisis and emergency plans ready, the significance of building stable and trusting relationships with employees and partners and the positive impact of frequent communication and transparency.

Here’s what Annesley Wallace, Chief Pension Officer at OMERS had t…

Pensions' Love-Hate Relationship With Private Debt?

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Fola Akinnibi and Kelsey Butler of Bloomberg News report on why pension managers love or hate private credit:
With some $4 trillion to invest—and returns depressed by ultralow interest rates—U.S. public pension funds have been dipping their toes into private credit. The relatively new asset class had grown quickly, attracting almost $1 trillion, before it was hit by March’s pandemic-driven collapse.

So how do pension fund managers feel about this burgeoning asset class now? Bloomberg Markets talked to officials at nine pension systems of different sizes and in different parts of the country to get their views on how these investments are working out. We heard a wide range of reactions, presented here from the smallest fund to the largest:

San Diego County Employees Retirement Association

Stephen Sexauer, chief investment officer 
Size: $11.9 billion Serves: More than 44,000 members 
Private credit allocation: Less than 0.5% 
Performance in the lockdown: Too soon to judge 
Target allocation…