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Notes From Montreal Pension Conference
Spent the last couple of days at a pension conference here in Montreal, Sommet Avantages & Retraite. There were numerous excellent presentations covering all sorts of pension issues. Here are some brief bullet notes:
- Bernard Morency, Executive Vice-President, Depositors and Strategic Initiatives at the Caisse de dépôt et placement du Québec, kick-started the conference with an excellent presentation on the future of pension plans. Mr. Morency made a forceful argument that if defined-benefit plans are going to survive, then all stakeholders will need to make concessions. During the question period, I asked him if he sees a role for the private sector and he said "yes because if we leave pensions all up to the government, chances are they will understate the true cost."
- I assisted most of the investment workshops. Ron Chesire of Triasima spoke on integrating lessons on behavioral finance in risk management.
- Bernard Augustin of Addenda Capital focused on liability-driven investments (LDI) arguing that the low interest rate environment requires a better understanding of how to separate out the alphas and betas in a portfolio.
- There was an excellent presentation by Emmanuel Matte of Standard Life on how to properly assess a fund's risk across all investment portfolios. Importantly, instead of dollar allocations, risk budgeting should be implemented based on economic scenarios. Mr. matte demonstrated that this approach adds significantly to returns while minimizing downside risk.
- Rene Martel of PIMCO gave a good technical overview of LDI, explaining bond leverage using repos and total return swaps into various equity indexes.
- My former boss at PSP, Pierre Malo, now at Perseus Capital, explained how to manage the hidden bomb of currency risk. I have already referred to this topic on my blog. And I thank Pierre for inviting me to this conference as his guest.
- Finally, the most fascinating and inspiring presentation came from Martin Lafontaine of GSK who worked at Project Hope in Munsieville, South Africa. Martin discussed the five factors of success and how they united rival factions in Munsieville to hold World Cup mock games for the children of Munsieville. You can follow Martin's blog but please donate generously to Project Hope.
That's all from me. Not much in a blogging mood lately as the weather is spectacular and I plan on enjoying my weekend. Wish you all a great weekend and wish all dads a Happy Father's Day. Below, a video from Project Hope on Munsieville International Children's Cup.
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Amoung all your hob-nobbing, lunching and usual dribble on this Conference (chummy jolly in a recession) and guff about "highly intelligent" speakers and "risk management" no talk of a Depression on the way made your 'bullet points' Leo?
48% of Americans polled think a Depression is coming in 1 year
What %percentage of Pension managers think a 'Big D' is on the way?
And what %percentage of these high-IQ beings discussed, presented and scenare'od in preperation for a Big D Leo?
...or did nobody mention the 'D' word at the entire crony knees-up? ....not a single manager, crone or Mensa-rated speaker present on the 'Big D' scenario or chatted about it the whole Conference?
...were rose-tinted spectacles included in the Conference freebie packs Leo?
a conference full long-only dolts?! Fascinating...
Hell, they can afford to be long, it ain't their money.
"It doesn't sound like much has been learned in pension world."
No kidding. Notice how quickly the MSM has dropped/disappeared/eliminated the use of the word "sustainable".
It works until it doesn't. Hedge accordingly (there really is nothing else you can do) and be productive.
Key terms from bullets:
"Concessions, true costs, behavioral finance, leverage, swaps."
It doesn't sound like much has been learned in pension world.
I imagine the travel costs, hotels, facilities, and meals were paid with by pensioners money, no?
Happy Father's day weekend to you too Leo.
Leo, you make it sound like you traveled the distance to get to that conference. Don't you live in Montreal?