[i3] Podcast

In honour of Gilmour Space Technologies obtaining regulatory approval from the Australian Space Agency to launch its very first home-grown rocket into space, we bring you an interview with Adam Gilmour from January 2022. The Eris rocket is due to take off on Thursday morning. In Episode 66, we spoke with Adam Gilmour, who is the co-founder and Chief Executive Officer of Australian rocket company Gilmour Space Technologies. His business is backed by some of the largest institutional investors in Australia, including Hostplus, HESTA and NGS Super, as well as several venture capital firms, including Blackbird. In this interview, we talk about the business of rocket launches, space cargo, interest from institutional investors and Chinese spies. Enjoy the show and don't forget to subscribe through your favourite platform. Overview of podcast with Adam Gilmour, CEO of Gilmour Space 1:00 Starting as a derivative trader 3:30 Where do you start launching rockets? ‘You start small” 6:00 We are the Fedex of space 7:30 We started the company to take people into space 8:00 I fully intent to go to space in one of my vehicles 8:45 Pension funds backing Gilmour Space 10:00 There is an element of nation building in Australian super funds 11:30 Challenges of being an Australian-based space company 13:00 We estimate that the industry for launching small satellites into space will grow to $5bn by 2025 14:30 Impact of the pandemic: supply chain issues 16:30 How do you build a rocket. 17:30 How Gilmour Space become the object of Chinese spies 19:30 Putting people on Mars is unrealistic in the short term and inevitable in the long term. 22:00 If you are going to shoot things into space, the moon is a good place to do it 23:00 Favourite science fiction book: Orson Scott Card's Ender's Game

Suhail Shaikh is Chief Investment Officer of Fulcrum Asset Management and is the portfolio manager of Fulcrum's Discretionary Macro and Diversified Absolute Return strategies. In today's incredibly volatile environment of tariff wars and deglobalisation, investors tend to be more sensitive about the level of their absolute returns, than their performance against the benchmark. In this episode, we delve into the philosophy of absolute return investing, we talk about the role of skill versus luck, the use of Nowcasting, learnings from the COVID-19 pandemic and the ever controversial topic of market timing. Enjoy the show! 02:00 Started off working on the intranet and taught myself HTML 02:30 Internship at Goldman Sachs 03:30 A lot of well-known global macro traders made their money during equity market crashes 05:00 If you are constantly looking for the next accident, then 90 per cent of the time you are wrong. It is important to make money while the sun is still shining 10:00 Crisis risk offset and momentum during COVID 13:30 Leaving the model aside 15:00 Using Nowcasting for analysis 18:30 AI has been more useful to us in portfolio construction, risk management, scenario analysis and stress testing. I'm more sceptical about AI being helpful in alpha generation. 22:30 Behavioural finance and Fulcrum paper: ‘Don't Bet the Ranch' 23:30 To determine whether someone is skilled or lucky, look at the number of views they take over time 31:30 Sizing [trades] is a complex topic 33:00 The role of dynamic asset allocation 34:00 “The biggest accidents in asset management happen when, in a draw-down, people don't know whether they are benchmarked or absolute return” 35:00 “Dynamic asset allocation is market timing” 40:00 Global Macro and the Magnificent Seven 42:00 Bitcoin and momentum strategies 44:30 Some clients explicitly prohibit us from investing in Bitcoin The paper "Don't Bet The Ranch: Hit ratios, asymmetry and breadth" can be found at: https://fulcrumasset.com/insights/investment-insights/dont-bet-the-ranch-hit-ratios-asymmetry-and-breadth/

In episode 111 of the [i3] Podcast, we speak with Michael Weaver, who is the Head of Global Real Assets with the Australian Retirement Trust. We discussed the role of real assets in the context of a multi-asset, pension portfolio, the ever-lurking threat of inflation, the return of office property and more. Please enjoy the show! Overview of Podcast with Michael Weaver, Head of Global Real Assets, ART 02:00 Role of real assets in a multi-asset portfolio 03:30 We don't call them mid-risk, but it is a similar philosophy 06:30 Inflation: what we are most worried about is unexpected inflation 08:00 We would expect to grow our infrastructure portfolio in Australia, but also internationally. 09:00 Benefits of larger scale, post merger 12:00 Massively expand the real asset team, no. But expand yes. 16:00 Retail and Office property: we are actively looking at new investments 20:00 Did Covid wobble your confidence in airports? Wobble is probably a good word. 25:00 Impact of data centres on power generators 27:30 Multi-family, build-to-rent property 33:00 Energy transition assets

In episode 110 of the [i3] Podcast, we speak with Jamie Newton, Head of Global Fixed Income Research and Deputy Head of Sustainability at Allspring Global Investments. We discuss why it is a good time to add duration to fixed income portfolios, concerns over the lack of experience with high default rates in private credit and opportunities in data centres and other digital assets. Enjoy the Show! Overview of Podcast with Jamie Newton: 02:00 I was not going to spend 16 weeks looking through a microscope 04:00 I grew up in the go-go days of the internet 05:30 Is 2025 the year of Riding the Curve? 08:00 US Economy: ‘All in, we're okay' 09:00 Will we ever see 19pc mortgage rates again? Highly unlikely 11:00 Recession: I think the risk has increased a little bit 12:30 Do leading indicators lag too much in today's fast moving world? 13:30 We like ABS in general, especially in USD assets 15:00 FI opportunities in data centres and fiber assets 17:00 Concentration is not so much an issue, as there is a limit to upside in FI 20:00 Artificial intelligence and fixed income 21:30 Popularity of Private credit 22:30 Lack of experience with defaults is absolutely a concern 26:30 Green bonds 28:00 Thoughts on the Australian market

In episode 109, we are back with Will Liang, Executive Director at MA Financial, to discuss DeepSeek and the impact on the future development of artificial intelligence and the global economy. Are tech firms going to scale back their investments due to this low cost model, or is it all a bit of a hype? Enjoy the Show! Overview of Podcast with Will Liang on DeepSeek 01:00 First impressions of DeepSeek 03:00 Is DeepSeek really a revolution? 04:00 OpenAI did not spend billions of dollars developing one model 04:30 DeepSeek and memory saving 08:00 Mag Seven and investment plans 10:00 Jevons' paradox in AI and related industries 11:00 I don't think DeepSeek is a distilled model 13:30 Should we be worried about data being fed back to China? 16:30 DeepSeek has released a lot of LLM secrets to the public 18:00 Applications of DeepSeek in the investment industry 22:00 You will see a lot more distilled models of DeepSeek 25:00 A wake up call for the investment industry

Brendan Carroll is a Senior Partner at Victory Park Capital, which he co-founded in 2007. In this episode, we discussed the evolution of private credit investments, how they can be made more friendly to insurers and the acquisition of VPC by Janus Henderson Investors. Enjoy the show! Overview of podcast with Brendan Carroll, Victory Park Capital 01:00 Getting started in investing 03:00 Setting up the firm in GFC 06:00 Asset backed lending 07:30 Insurance-friendly strategies 09:00 Insurers are the fastest growing LP types 13:00 The industry has always been competitive 17:30 Historic data sees through cycle 18:30 Business review triggers 28:00 The Janus Henderson acquisition 31:00 Developing ChatVPC

In episode 107 of the [i3] Institutional Investment Podcast, we speak with Scott Donald, Associate Professor at the School of Private and Commercial Law of the University of New South Wales, about his research into governance and the now mandatory annual member meetings of superannuation funds. How do funds field questions from members? How can we check they answer all questions? What impact do these meetings have on the corporate culture and brand of a fund? After collecting nearly five years of data, Scott shares his insights into these interactions with members. Overview of Podcast with Associate Professor Scott Donald: 02:00 Researching the intersection of Annual Member Meetings and governance 03:00 Five years ago a rule came into effect that funds needed to hold annual member meetings. Do funds see it as a box ticking exercise, or do they take the opportunity to build a brand through these meetings? 6:30 The Q&A process in these meetings are way more specified than in a (listed company) AGM 09:00 Member meetings don't have the disciplinary effect that an AGM has 10:30 How do we know if the chair has identified some of the more uncomfortable questions? 11:30 There isn't really a mechanism for a member to say: ‘Hey, I asked this question and you didn't really give an answer' 13:00 Most questions get asked about fund returns 16:00 Climate risk questions are the second biggest in terms of the number of questions, after returns. We were interested to see whether all of those questions were from activists 17:30 What signal do we take from the questions being asked? I think there is a danger of misinterpreting that signal 23:00 Inconvenient questions for members 26:00 I hope funds will take a more bespoke and thoughtful approach to member meeting, rather than a this-is-best-practice and move on 27:30 False and misleading statement risk 30:00 Legitimacy is an issue in super and member meetings are a way of putting a face to super 31:00 We don't know the extent to which the regulator is switched on to all these questions being asked 32:30 We are close to finalising the fifth season of member meetings and we will write that up 35:00 Upcoming research might look at the use of AI in super funds

In episode 106 of the [i3] Institutional Investment Podcast, I speak with Craig Dandurand, Chief Investment Officer of the Tuckwell Family Office. Craig has an impressive career in the investment industry that spans time with US pension fund CalPERS and Australia's the Future Fund. We talked about his background in credit investing, setting up a hedge fund program and the world of private wealth. Enjoy the show! Overview of Podcast with Craig Dandurand 01:00 You initially worked in the legal profession. How did you get into investing? 02:00 Starting at CalPERS 03:00 The hedge fund team was the least bureaucratic part of a very bureaucratic organisation 06:30 What has changed in hedge funds compared to 20 years ago? They got more boring 10:00 During the GFC, I remember sitting in a coffee house writing something with a headline that said: ‘Capitalist Manifesto', which is the kind of overblown thing you write in a coffee house. But it resulted in three key aspects we wanted hedge funds to focus on: alignment, control and transparency 15:00 CalPERS was at a scale that led some hedge fund managers not wanting to engage with us 16:00 The optimal size of an asset owner is probably between $5 - 30 bn. 20:00 What was most disorientating coming to Australia was my currency exposure 26:30 Learnings from the COVID-19 crisis 29:30 To do a total portfolio approach well at a large asset owner is an incredible labour intensive exercise 32:00 The Future Fund had a clear investment target, but when you join a family office you need to find out what their needs, values and desires are (pardon the thunder in the background). Before you can invest the money, you need to know why you are doing it 34:00 Graham Tuckwell invented the gold ETF and, therefore, has a good understanding of how markets work 35:30 The concept of ‘ten ETFs and a 9 iron'. Often people confuse complexity for quality 42:00 Catering to different needs and life stages within family offices 48:00 I'm a credit junkie and that probably comes from being a bankruptcy lawyer 49:00 I find the growth of private credit over the last few years fascinating and slightly unnerving 53:00 Best and worst investment: investing in Worldcom bonds

In episode 105 of the [i3] Institutional Investment Podcast, we speak with Jessica Sclafani, a Global Retirement Strategist with US fund manager T. Rowe Price, which manages $1.6 trillion in total assets on behalf of clients. Retirement is a more complex phase than wealth accumulation and it needs a more sophisticated approach to deliver good outcomes. Sclafani discusses a 5 dimensional approach to retirement and the tradeoffs that come with choosing a suitable approach Overview of Podcast with Jessica Sclafani, Global Retirement Strategist, T. Rowe Price 01:00 How does one become a global retirement strategist? 04:30 The 5 dimensional retirement strategy is based on the research of Berg Cui a senior quantitative investment analyst in the Multi-Asset Division of T. Rowe Price 05:30 The 5 dimensions of retirement 07:30 To benefit from any of these attributes, you are going to have to compromise on at least one of the other four. So tradeoffs is something that we are going to talk about a lot 10:30 Traditional risk/return tradeoffs don't work well in retirement. Here is an example. 13:00 Our research showed that out of 2500 respondents, maintaining quality of life was their top ranking concern 14:00 Longevity risk and the risk of sudden portfolio depletion are not the same thing 15:30 When investing for retirement, people are not just focusing on returns 18:00 People in the survey ranked volatility as the least important. Is that a financial literacy issue? 23:00 Guaranteed income streams are not very popular. What is your take on these products in retirement? 24:30 We tend to talk a lot about guarantees, but we don't talk a lot about what people have to give up for that guarantee 25:00 Our research found that people are willing to give up 6 per cent of their income to go from knowing that their savings would last them until age 100 to having a guarantee for life 28:00 Does A.I. offer a solution for mass-customisation of retirement products? To read the T. Rowe Price paper, 'A five‑dimensional framework for retirement income needs and solutions', please see here: https://www.troweprice.com/content/dam/gdx/pdfs/2024-q3/a-five-dimensional-framework-for-retirement-income-needs-and-solutions-apac.pdf

John Livanas is the Chief Executive Officer of State Super, the $37 billion superannuation fund for public service and public sector workers in NSW. In this episode, we talk about the use of defensive overlays, dealing with the COVID drawdown and machine learning in investments. Enjoy the show! Overview of podcast with John Livanas, Chief Executive Officer of State Super 01:30 Peter Drucker's book, The Unseen Revolution, provided inspiration to enter the pension fund industry 03:00 We are actually starting to see some of the benefits that Drucker described eventuate here in Australia 07:30 In Australia, every member can actually see their own money in their account. That relationship where you can see where your money is going and see the wealth accumulating creates a more stable system 10:00 On individual risk and financial literacy 12:00 The unique characteristics of State Super 15:00 State Super is unusual; it is probably where most of the funds will be in 10 years' time. 16:00 We think the biggest decision is setting the investment strategy and then our internal team or TCorp will implement that 18:00 In 2017, we were called the biggest hedge fund in Australia, because we made money on the upside and the downside 19:30 During COVID, our downside protection triggered and that meant we never got into the negative. It is not about anticipating what will happen, but think about how these factors will take place 22:00 Using machine learning in the investment process 24:00 Machine learning didn't work as well for the Ukraine invasion. That was more a secular relationship. But we did change our portfolio quite significantly 31:00 Machine learning will have a role, but I will still look to people to make the decision 35:00 State Super is not regulated by APRA, but often we look at the policies as if we were 37:00 Active manager do take a little while for that outperformance to come through

Matthew Culley is a Portfolio Manager on the Emerging Market Equity Team at Janus Henderson Investors. In this podcast, we talk about the best performing markets, tensions around China, the impact of the US elections and fighter jets. Enjoy the Show! Overview of [i3] Podcast with Matt Culley, Janus Henderson Investors 02:00 I initially wanted to become a fighter pilot, but then got glasses and that dream went out the door 06:00 Brazilian Jiu Jitsu taught me to stay calm under pressure and not panic when stock prices fall, and it also got me interested in emerging markets 08:30 There seems to be more interest in emerging markets ex-China mandates. What is your take on China? 11:30 Electric vehicles are not a hype in China; it is something that is actually happening 13:30 Large swaths of the Chinese equity market might be uninvestable for certain types of investors. 17:30 [If China invades Taiwan] I think this is going to be a much bigger question than what happens to equity assets. 20:30 A lot of Trump's policies are inflationary: tariffs are inflationary, clamping down on immigration is inflationary, which is going to circle back to monetary policy 21:00 Harris will probably represent a continuity of current policies with a focus on domestic policies 23:00 What has crept up for developed markets in recent years is debt loads 26:30 US interest rates have historically been the achilles heel of emerging markets 30:00 The best performing emerging market over the last five years is not India, it is Taiwan. And it is not just TSMC 35:00 When you look at emerging markets, what you are going to notice is a distinct lack of Amazon. Local players are better suited to navigate the local regulations and payment systems 36:30 India is the only economy that can grow their GDP in mid to high single digits in the next decade or two 39:00 The impact of the Systematic Investment Plan on the Indian equity market 42:00 Any favourite companies in emerging markets?

In episode 102 of the [i3] Podcast, we speak with Andrew Spence, Chief Investment Officer of the $9 billion corporate super fund Qantas Super. Qantas Super recently announced to merge with ART and we took the opportunity to look back at the investment strategy that Spence put in place as the fund's first CIO, the innovations along the way and lessons learned. Overview of podcast with Andrew Spence, CIO of Qantas Super 02:00 I came on board when Qantas Super decided to split the CEO and CIO role into two roles. 05:00 When I started there were nine active managers in the Australian equity portfolio and no passive investments. Whatever the question was, the answer was not nine active managers. 11:00 The GFC meant we took a safety first, peer unaware approach to our portfolio. Because if members experience too much volatility they switch to a lower risk option 12:00 What I inherited was a bunch of commingled funds and no individual mandates. Then as we went through the GFC, what we found was that a lot of these products were gated and didn't have the liquidity that was on the tin 13:00 There is increasingly less competition in the small and mid-market 14:00 Talking timberland 19:00 The delegation framework has been a competitive advantage for us 19:45 At the end of 2008, the chair of the investment committee came to me and said: ‘We seem to be holding you up a bit'. 21:00 The trustee's role is to govern and the management's team is to manage and be held accountable for the outcome they deliver 24:00 We saw a lot of member switching during the onset of the pandemic and that meant these members missed out on the recovery in the next 12 to 18 months 25:00 We didn't hit any of our illiquidity tolerance levels, but we came close 29:00 Addressing sequencing risk through a glide path 33:00 I think it is important to make information is freely available across the team and is not just held by the CIO 34:00 By the end of 2019, the investment committee was pushing us to be more peer aware 39:00 Tax managed, centralised portfolio management saved us $250 million over 10 years 40:00 The partnership model has worked well for us 42:00 Backing managers early on in their career means we were invested in each others success

In episode 101 of the [i3] Podcast, we speak with Damon Callaghan and Sam Byrnes of asset management firm ECP. ECP was established by Dr. Manny Pohl of Hyperion Asset Management fame and in this episode we talk about the opportunities and challenges of artificial intelligence when investing in Australian equities. Enjoy the show! 01:00 How we got started in investing 04:00 Sam: My dad was CEO of Bega Cheese and that got me both interested in business and also made clear that I didn't want to work in a factory 06:00 Who is ECP? 09:30 Artificial Intelligence and the Australian stock market 13:00 Parallel processing and the ability for GPU's to work in tandem 15:00 Where do you see the best use cases in Australian companies? 17:00 Hub24 is a good example of AI being used well 22:00 Is AI disruptive, or does it merely cement the dominance of the large incumbents? 23:30 Xero vs MYOB 29:30 Can you defraud a chatbot? 30:00 Corporate use of AI will be a lot slower than what the hyperscalers would like 37:00 Consultants will be the biggest winners from this 37:30 Ethical considerations in implementing AI. Adobe and copyright 45:00 The future of AI is hyper personalisation

It is our 100th episode of the [i3] Podcast and we are celebrating this with an in-depth discussion on innovation in private equity, especially mid-life transactions, with David Morse, Managing Director and Global Co-Head of Private Equity Co-Investments at Neuberger Berman. Enjoy the show!   Overview of Podcast with David Morse of Neuberger Berman 01:00 Starting in mid-market lending, but liking what the guys on the other side of the table did more 03:30 Deal flow in Private Equity has been low and portfolio companies are for more than 6 years, an eternity in PE 06:00 Prior to 2022, you had the “rocket fuel of private equity”, cheap debt and distributions exceeded capital calls. But you get to the third quarter of 2022 and all of those sources of liquidity have dried up 09:00 What we saw was that seller expectation was still quite high, but buyer expectations had come down dramatically, because the cost of capital had gone up 12:30 Today, PE transactions are not leveraged buyouts anymore, it is a very equity heavy transaction 16:30 Mid life transactions are co-investments into the private equity space. They focus on companies that have been owned for a few years, but are still performing well and needs capital to continue its value creation plan 19:00 When you are a GP, there are really only three sources of capital: private debt, secondaries (continuation funds) and co-investments (including mid life deals) 22:00 The problem in PE is not the returns, it is the distribution. And that is why there is an opportunity for private debt, secondaries and co-investments 25:00 Should we re-lever assets? 31:00 Distribution levels are at their lowest since 2010 and so LPs say: ‘I cannot commit to your next fund until I see some cash back'. If you ask me who is going to blink first, seller expectation vs buyer expectation, then I'm going to say seller expectation first. 33:00 Investment banks told us that their backlog of signed M&A agreements was higher in Q1 of 2024 compared to Q1 2021, the record exit year of all time. 35:30 The deal flow that has collapsed is one private equity firm selling to another private equity firm 37:30 In terms of the deal being done, we've seen a shift towards up market 38:30 We subscribe to not just interest rates ‘higher for longer', but ‘higher forever'

In episode 99 of the [i3] Podcast, we speak with Julian McManus, who is a Portfolio Manager on the Global Alpha Equity Team at Janus Henderson Investors. We spoke about global equities, the role of the Magnificent 7, Japanese equities and hybrid cars. Enjoy the show! Overview of Podcast with Julian McManus, Janus Henderson Investors 02:00 Getting into Japanese equities fresh out of law school 04:00 We still invest in Japan 07:00 Abe's reforms and book value quant trades 08:00 The Japanese government has woken up to the urgence to create national champions in strategically important industries 09:50 Japan is going to be one of the most important semiconductor manufacturing hubs globally outside of Taiwan 11:00 Toyota and the demand for hybrides 14:00 There is still a notion among some investors that you invest in US stocks and international is where you go on vacation 15:30 Tech companies outside of Magnificent 7, why haven't they increased alongside? 16:30 Many investors have trouble paying more than 25 times, one year forward earnings for any European stock 19:00 Yes, there is geopolitical risk in TSMC, but TSMC is not living in a vacuum 20:00 We are of the position that China will never be able to invade Taiwan 22:00 Because we have a large position in (defence company) BAE Systems, that allows us to have a large position in TSMC as well. 23:00 We own three of the Magnificent 7 25:00 We believed for a very long time that Apple and Tesla were overvalued and avoided those 28:30 The uncomfortable question about AI is: Are you going to reinvest the productivity gains or let them flow down to the bottom line? 30:00 On the dangers of overdiversification 36:00 Rates are typically something we don't want to take a bet on 37:00 Defence spending will need to catch up in Europe

In episode 98 of the [i3] Podcast, we are speaking with Will Liang, who is an executive director at MA Financial Group, but is also well-known for his time with Macquarie Group, where he worked for more than a decade, including as Head of Technology for Macquarie Capital Australia and New Zealand. We discuss the application of AI in financial services and wealth management, ChatGPT and how to deal with AI hallucinations. Overview of Podcast with Will Liang 02:30 When I was young I contemplated becoming a professional Go player 05:00 2016 was a life shattering moment for me; Lee Sedol was defeated by AlphaGo 07:00 I think generative AI will be a net positive for society 08:30 The impact of AI on industries will not be equally distributed 15:00 Brainstorming with ChatGPT or Claude 16:00 AI might help us communicate better 19:00 AI hallucinations are actually a fixable problem 22:30 Myths and misconceptions in AI 27:00 Most of the time when ChatGPT doesn't work is because we are prompting it in the wrong way 28:30 Thinking Fast & Slow; AI is not good at thinking slow 29:00 Losing our jobs to AI? It is important to distinguish between the automation of tasks versus the automation of jobs 35:00 When implementing AI, look at where your data is and try to bring your application closer to the data 39:00 Don't trust any third party large language model, instead deploy an open source model into your own cloud environment 43:00 You ask ChatGPT 10 times the same question and it will give you nine different answers. That is a problem. 45:00 Deep fake is a real problem 50:00 Future trends: AI agents 53:00 Generative AI will be more of a game changer for private markets than public markets

In this episode of the [i3] Podcast, we speak with Felicity Walsh, Managing Director and Head of Australia & New Zealand for Franklin Templeton about leadership, fostering a great work culture, mentorship and lab coats. Enjoy the show! Overview of Podcast with Felicity Walsh, Franklin Templeton 01:00 Hanging up the chemistry lab coat and safety specs, and joining Watson Wyatt 05:00 Defined benefit post GFC and getting into client acquisition work 07:00 Differences between UK and Australian pension systems 10:00 When I came to Australia there was no depth in the inflation-linked bond market 13:00 Joining K2, not as different from an asset consultant as you might think it was 17:00 Making my own glossary of hedge fund terminology 19:00 In the early days of K2, there was a clear separation from Franklin Templeton. We even had our own fridge 22:00 On leadership style: “I'm very keen on a flat structure, which is not always how fund management firms operate”. 24:00 In a small team, you need to keep the job varied and interesting 29:00 Culture is incredibly important when you work for a global company 33:00 On the importance of keeping distractions away from your team 35:30 There are certain people whose counsel I seek from time to time, but they are not people who I initially thought were going to be mentors 40:00 Removing the distinction between retail and institutional teams 44:00 Focusing on community this year 46:00 Integrating the acquisition of Putnam investments

In episode 96 of the [i3] Podcast, we speak with Maria Elena Drew, Director of Research – Responsible Investing, at T. Rowe Price about the challenges and opportunities of transforming investments into net zero portfolios. How does it affect your objectives and engagement with companies? Enjoy the show! Overview of Podcast with Maria Elena Drew, T. Rowe Price 01:00 When I was at school, I didn't think this was a career path that was out there. At university I studied economics and geology. 04:00 As a young analyst I covered Enron and they had a very bullying approach to investors 06:00 I realised ESG was not about telling you what you can and can't invest in, but to use information on governance and environment to get better investment ideas 07:00 I started to ask at least one ESG-related question in company meetings and without fail the answer was helpful to me 10:45 The ability to determine whether there is alpha generation from ESG is really difficult 15:00 What is your true net zero objective? Do you want to have no exposure to high emitting companies? Or do you want to help companies with their transition to net zero? Those are two very different portfolios 19:00 Track progress along the way: setting net zero status targets 20:45 We think the net zero status is a smart way of going about it, because it is forward-looking 23:30 If your objective is really just greenhouse gas emissions, then you really just incentives your manager to do sector selection 28:00 Divestment ultimately sits with the client direction 29:00 An exclusion list makes more sense for passive investors, than for active investors 31:00 If you don't have a decarbonisation [plan], then you are making a very strong bet that all of this regulation is not going to come through 33:00 What if institutional investors leave it up to companies to sort this out? What risks do they face? 36:00 Do you allow companies to rely on carbon credits/offsets to achieve their net zero target? 40:30 Pushing companies to go too fast can be counterproductive Maria Elena Drew also spoke at the [i3] Equities Forum 2024 in the Yarra Valley, Victoria, on 20 February 2024

John Bowman is President of the Chartered Alternative Investment Analyst (CAIA) Association. In this episode we look back at the growth of the alternative investment industry, in particular private equity, discuss ESG and take a look at the upcoming paper on the total portfolio approach Overview of podcast with John Bowman, CAIA 02:00 I got involved in international equity investing through a few Boston wealth managers at SSGA. 6:45 I'm integrated by the power of capital allocation to solve some of the world's problems 08:00 At the CFA Institute, I often found myself on the same stage as the CAIA executives 10:00 The term ‘alternatives' is a term that CAIA wants to make extinct 16:00 On the growth of alternatives: We've got this ecosystem now where companies can stay private for longer or even permanently now, that investors can take advantage of 17:00 The first generation of private equity relied a lot on leverage, but that is not the case anymore. Investors won't stand for financial engineering 23:00 Public governance models in the US tend to be pretty hands on…, even meddling if I might say 24:00 CAIA papers: 'Portfolio of the Future', 2022 (https://caia.org/portfolio-for-the-future) and 'The Next Decade of Alternative Investments', 2020 (https://caia.org/next-decade) 24:30 Most practitioners under 40, who analysis investments, have only operated in an environment where there was zero cost of capital, non-existent inflation and double digit capital market returns. But this environment was not normal 26:30 The best kept secret in investing 29:00 Knowledge management and operational alpha 32:30 AI is likely to be the next supercycle, but… 37:00 I don't think we can outsource our fiduciary responsibilities to the machine just yet 40:00 Do we need to disentangle ESG and look closer at the underlying factors and how they affect clients, because you can't average out ESG factors? 42:00 Upcoming paper on the total portfolio approach with input from CPPIB, Future Fund, GIC and New Zealand Super 46:00 Launch on 19 March 47:00 TPA changes the role of portfolio managers

Andrew Fisher is the Head of Investment Strategy at the Australian Retirement Trust (ART), a $260 billion pension fund in Australia. In this episode of the [i3] Podcast, we reflected on the merger with QSuper and the implications the larger scale of the fund has on the investment strategy. Enjoy the show! Overview of Podcast with Andrew Fisher, 2024 01:00 Merging two funds with different investment philosophies 04:00 YFYS performance had already started to impact QSuper's investment management's style 06:00 QSuper's capital markets capabilities is top notch 08:30 You can look at the two funds and say how different they are, but you can also say how complementary they are 13:00 Ever considered using a reference portfolio? 14:30 I'm not sure whether a merger like this really ever is finalised 17:00 Any learning from the QSuper merger that you can apply in future mergers? 19:00 We consistently get surprised by our growth. We are essentially doubling every five years 23:00 You would expect traditional private market assets and infrastructure to have the best pass through of inflation costs, but it was actually the alternative private markets assets that turned out most resilient 25:00 Office and Retail Real Estate 30:00 The one thing people don't speak enough about is how resilient equities have been during this whole inflationary period 32:30 I don't think the job is done, but I think central banks have done a really good job 34:00 What we are trying to do with our decarbonisation strategy is to mitigate the risk from the trend towards low carbon without taking too much investment risk

In episode 93 of the [i3] Podcast, we speak with Michael Bonte-Friedheim, the Founding Partner and Group CEO of NextEnergy Capital, a firm that specialises in investing in solar energy plants. We talk about the role of subsidies, the growth of the sector and the fact that ESG in solar isn't just about renewable energy Overview of Podcast with Michael Bonte-Friedheim 01:00 The genesis of NextEnergy Capital 04:00 Solar is our choice of technology 05:00 The technology of solar hasn't changed a lot, but the efficiency and the cost of components has changed dramatically. So much so that in most countries, solar energy does not require subsidies 10:00 What makes one solar plant more attractive from an investment perspective than another? 12:00 ESG issues in solar: integration of solar plant in landscape and community 16:00 On floating solar plants: water evaporation and birds 20:00 The impact of the Inflation Reduction Act 21:00 Solar in China 23:30 More and more institutional investors are breaking down what is in that infrastructure and real asset bucket 28:00 Solar Plus 30:00 Solar is expected to double in size over the next few years 31:00 Biodiversity – what happens to soil if you leave it alone for 40 years? 35:30 The NextEnergy Foundation receives five per cent of our group's profits

Mike Comparato is Managing Director and Head of Real Estate at Benefit Street Partners, a credit-focused alternative asset management firm owned by Franklin Templeton. In this episode, we cover Mike's views on the turmoil that the commercial real estate market is facing and the impending debt maturity wall that could set off a hurricane. Overview of Podcast with Benefit Street Partners' Mike Comparato 01:00 Our family has been in the real estate sector since 1946 04:00 There is a storm out there [in the CRE sector] and there is no question of its severity. It is just a question of when it is going to hit 05:00 Commercial real estate is a very credit and debt intensive asset class 05:30 The ‘debt maturity wall' and its market impact 06:30 People are just not lending to hold liquidity 08:30 If you just waited in the past 40 years, thing just got better 09:45 “There is a lot of damage that is coming” 14:00 We are making equity-like returns in credit products. It is not often that you get to say that. 14:30 Multi-family real estate credit 16:30 The regional banks were the top credit providers for construction loans in the US 17:00 The banking space is in a much worse place than people think it is. It is very simple: if banks aren't lending, then that means things are bad at the bank 19:30 The COVID-19 pandemic changed the demand for office forever. We are talking about a change that might not be recoverable 21:30 No one is making loans on office buildings right now. 23:00 Who knows how many young professional jobs, such as paralegals, will be replaced by AI 25:30 The data centre space is something that we have always avoided, because I'm always scared that we are going to wake up and someone has discovered a new technology that makes data centres completely obsolete. Whenever you have something in real estate that has a very specific use, it is very scary if it doesn't have some kind of alternative use. 27:00 The retail apocalypse never happened. But why? 32:00 The number I would have to put on writing a loan for an office building would be so high that it basically means the asset is worthless

This year we celebrate 20 years of New Zealand Super. We speak to the fund's CEO, Matt Whineray, about the evolution of the fund throughout the years, do a deep dive into its strategic tilting program and cover responsible investing, AI and much more. Enjoy the show! Overview of Podcast with Matt Whineray, CEO of NZ Super on 20 years of the fund 01:00 NZ Super started investing in September 2003 and now has a 20 year track record 03:00 One of the key starting points was to get the risk position right and get the board to understand this position 04:30 The 20 year track record: the country is about $40 billion better off as a result of the creation of the fund 07:00 The fund invested in private equity only two years after the beginning. 8:30 The strategic tilting program; the philosophy behind it and the early days 14:00 There are times when you get tested and 2013 was one of those times 15:30 I borrowed this one from [AQR's] Cliff Asness: ‘Don't size a strategy so that when it goes wrong you are dead'. 18:30 The amount of risk that we allocate to our strategic tilting process is definitely the highest of all of our internal strategies 20:30 The strategic tilting program has evolved from trading once a month to trading every day, sometimes multiple times a day 22:00 Introducing the reference portfolio; the beauty about the reference portfolio is that there is real clarity about the decisions that are being made 26:00 Since inception the decision was made that we always hedge the reference portfolio 100 per cent back to NZ dollars, and that is one that is always debated at reference portfolio reviews 28:00 Managing NZ equities in-house 31:00 What else do we do internally? Portfolio completion credit strategies, direct investment and strategic tilting 33:00 Embracing responsible investing 36:00 There is no downside to us helping our friends in the region 37:00 Preparing for the drawdown period 41:00 New Zealand Super has been experimenting with an AI portfolio. What is this? 44:00 Leaving the fund after 15 years and Matt's favourite moments with the fund 45:30 Early 2020, I had a radio interview where I was telling the interviewer that we just went from $48 to $35 billion. The fact I could say that is a testament to our stakeholder management and the education we've done along the way

In this episode of the [i3] Podcast, we speak with Jay Sivapalan, Head of Australian Fixed Income at Janus Henderson about the company's 2023 Australian Insurance Report, a survey of insurance companies and their plans for their investment portfolios. The survey found that no less than 9 out of every 10 insurers plan to change their strategic asset allocation! Overview of podcast with Jay Sivapalan: 01:00 Discussing the 2023 Australian Insurance Report by Janus Henderson Investors 04:00 Every 9 out of 10 insurers are revisiting their SAA 05:00 Top three concerns for insurers 05:50 Changes in the portfolios, especially life insurers look to add risk in the portfolio 09:00 Health insurers are now moving on to the LAGIC framework 10:00 Many insurers look to allocate more to unlisted infrastructure 13:00 Life insurers were most concerned about a recession. Why is that? 15:00 On tail risk hedging 18:00 Marrying investment objectives with regulatory requirements 22:00 Liability conscious investing 24:00 Insurers sometimes have to be counter cyclical investors 26:00 The different types of insurers look differently at ESG issues 30:00 The survey found that 74 per cent of insurers were planning to implement artificial intelligence. That seems high?

In episode 88 of the [i3] Podcast we speak with Dr. Michael Kollo about artificial intelligence and large language models such as chatGPT. We talk about their application to the institutional investment industry and discuss why Australia is so distrustful of AI. Please enjoy the show! Overview of Podcast with Dr. Michael Kollo 01:00 Getting involved in artificial intelligence 03:30 Australia doesn't trust AI, why is that? 06:30 AI in the investment industry; any edge is quickly adopted 08:30 If you are a super fund trying to communicate with a million members, then you have no choice but to use AI 13:00 Sometimes these large language models lie. Language models versus knowledge models. 15:00 Some of the upcoming new models are very powerful and potential chatGPT killers 18:00 The art of prompting; towards standardised interactions with AI 19:30 Generative AI is not forecasting any data points; it is forecasting language points 21:00 Gen Y has a 70 per cent use rate of chatGPT. Gen X and boomers; 60 per cent has never heard of it 23:00 What is to me the more interesting part is holding yourself to a higher level of questioning and reasoning 24:30 AI as the devil's advocate 27:00 AI in scenario modelling and risk management 30:00 Looking ahead, the way we might engage with computers will be less about clicking boxes and more about expressing ourselves. This might break a lot of marketing models 35:00 The impact of quantum computing on AI 40:00 AI in tackling the large problems

David Di Pilla is Managing Director and Group Chief Executive Officer of HMC Capital, a diversified alternative investment firm. In this episode, we speak about the challenges of building a new investment firm during the COVID-19, the attraction of healthcare real estate and the taking a private equity approach to listed markets. Please enjoy the show! Overview of Podcast with David Di Pilla: 1:00 The founding of HMC Capital 4:00 Building a business in the pandemic 5:30 We are looking for businesses that we are prepared to own forever 6:50 COVID-19 has really changed how people go about their daily lives 9:50 Daily needs and the 15-minute city 14:00 Institutional investors give you a big tick for investing in healthcare real estate, but the challenging bit is finding them at the right price. But we are very close to closing an institutional fund 16:00 Playing into the energy transition 18:00 Taking a private equity approach to the listed markets 21:50 Valuating unlisted assets 25:00 Looking at future strategies, talking build-to-rent or manufactured housing 27:50 I see interest rates remaining at this level for the best part of 2024 28:30 Reaching net zero

In this episode, we speak with Thomas Haugaard, Portfolio Manager for Emerging Market Debt at Janus Henderson Investors. Haugaard, a former economist, talks passionately about why emerging markets form such an interesting investment universe, the influence of geopolitics on debt securities and the risks from climate change. Please enjoy the show! Overview of Podcast with Thomas Haugaard: 01:00 My investment journey started with an academic interest 03:00 I shared an apartment with one of the authors of the Goldman Sachs report ‘Dreaming with BRICs' 04:30 Emerging markets is where as an economist you see many interesting things: new economic policy, diverse markets and a lot of growth potential 05:30 I actually don't really appreciated the ‘EM' term; all countries are developing 06:30 Where do the returns in emerging market debt come from? 09:30 What is the best environment for EMD hard currency? 13:30 Inflation is the wedge in between fundamentals and financial conditions; when inflation goes up the conditions for EM are not necessarily improving 18:00 Travelling in Venezuela seeing electric good being confiscated by the army because of the perception that prices were too high 19:30 We have been investing in Benin, Senegal and Ivory Coast for many years as policies are changing for the better 21:00 It is hard to mention an EM country where there isn't a lot of very interesting things taking place 22:00 Dispersion between EM countries has gone up significantly. Remember that we've had three years of unprecedented shocks. 26:00 There is a systematic relationship between how a market is trading a country's sovereign credit risk and its rating 32:00 High inequality means less space for policy change due to potential for social unrest 33:30 Climate change and extreme weather events are impacting a lot EM countries 36:00 Hard currency is the entry point for EM countries, because they might lack institutional credibility or even a central bank 39:30 In hard currency, there is a component of the risk premium that you can model and predict 41:30 Uzbekistan is a zero to hero story

Craig Roodt is Director of Investment Governance and Risk at Deloitte Touche Tohmatsu and is also known for his time with the Australian Prudential Regulation Authority (APRA). In this episode, we speak about the governance challenges of in-sourcing asset management functions by pension funds, the Your Future, Your Super performance test and some the worst governance failures he has seen during his time with the regulator. Overview of Podcast with Craig Roodt: 01:00 Governance pitfalls in internalisation 05:00 How to set a proper framework and determine what success looks like? 08:50 Does the leadership team have the latitude to actually deliver on the strategy? 09:30 When things go wrong you actually need to understand why, not just that it is below the index. That is just the outcome. 12:00 What are good reasons to in-source? 15:30 Boards always have to look at their level of skill as the environment changes 20:00 Independent directors are not a barrier to having the right skill level of boards, but it is also not a solution 23:00 Risk management is not about explaining what went wrong after the fact. It is about recognising warning signs. 25:30 YFYS has created a regulatory risk, a different objective that funds have to manage to 29:00 You can invest fully in cash and pass the test. That illustrates that there are problems with the framework 30:30 For most of the 2010s, we've had a risk-on environment. What that meant was that if you took less risk in any asset class, you were going to underperform. 31:30 The performance test doesn't look into the why. 32:30 As a means to identify which funds have been lagging, the test works, but you need to ask why. Potential fixes to the test 35:30 Outperformance should also be investigated 36:30 What were some of the worst governance failures that you have seen when you were at APRA? 40:00 Some of the things I saw were, if it wasn't actually people's money, it would have been funny. 42:30 Governance is not akin to solving a mathematical problem. 45:00 What is your focus at Deloitte today? 50:00 Greenwashing and materiality tests

In episode 85 of the [i3] Podcast, we speak with Jakob Wilhelmus, who is Director of Thematic Research at PGIM about their new report into food security and the changing food system. We spoke about the impact on the global economy and investment opportunities for institutional investors. Please enjoy the show! Overview of Podcast with Jakob Wilhelmus, PGIM 01:00 PGIM published the report ‘Food for Thought: Investment Opportunities Across a Changing Food System' 02:00 The current food system is increasingly unfit for purpose 03:00 Food security and the broader economy 04:00 About 40 per cent of the global population's employment is tied to the food system 06:30 The combination of increased temperature and more frequent extreme weather events will see crop yields decline by 12 - 15 per cent 07:30 Investment opportunities related to the food theme 11:00 Cultivated meat industry is at an ‘awkward' stage of its life 15:30 Innovation in food supply and security 16:30 Automatic vehicles and farming 17:30 Investing in farmland 19:00 ESG, fertilisers and carbon emissions in food production 21:00 Food packaging, investment opportunities and plastic pollution 24:30 About 40 per cent of all food produced is wasted. Are there any companies tackling this problem? To read the full report, please visit: https://www.pgim.com/megatrends/food-for-thought

Peter Johnston is Managing Director of Lighthouse Infrastructure, a sustainable infrastructure and real asset fund management company that has more recently been investing in affordable housing for key workers. In this episode, we delve deep into the issue of affordable housing and how it presents an opportunity for institutional investors. Overview of Podcast with Peter Johnston, Managing Director, Lighthouse Infrastructure 01:00 I started out in a utilities business, where I got involved in supporting that business with the regulatory framework 03:00 Lighthouse started in 2007 04:00 Getting started in affordable housing 07:00 A report by Anglicare, showed that in Australia key workers pay away 50 per cent of their income on housing 08:30 Making the first investment, working with St George's Housing 11:00 How do you structure the arrangement with the key worker tenants? 15:00 AustralianSuper has said these investments need to return between six and 11 per cent. Is that achievable? 16:00 We are using indirect subsidies, so we are not reliant on government 16:30 We need $110bn over the next 20 years for affordable housing and $180bn for social housing 18:00 Our model supports developers to build social housing, rather than to demand that of them 21:00 What is the role of Housing Australia in making this an institutional grade investment? 23:00 Is this a property or a sustainable investment? 24:00 Combining property assets with an infrastructure-like public private partnership structure 28:00 One of the challenges that we faced in making this sustainable is that it needed to be attractive to lenders as well as equity investors 29:00 What does the ideal investment look like in this space? 32:00 We have a pipeline of projects over the next two years that will see the fund grow to $1-2 bn comfortably

David Brown is the Chief Investment Officer of the Cook Islands National Superannuation Fund. David is also well known for his involvement in the private asset markets in his previous role as Head of Private Markets for Victorian Funds Management Corporation (VFMC). In this episode, we cover both the unlisted space, his time working with Leo de Bever and the unique set of circumstances when investing for a Pacific pension fund. Enjoy the Show! Overview of Podcast with David Brown: 02:00 Starting out in an intern role at ipac 03:00 Moving to London to work for Standard Life 04:00 Looking into private markets for QIC 05:00 Private market implementation has to be top notch or forget it 06:00 We had a wide variety of clients, including an order of nuns who had a very long investment horizon; until Kingdom come, literally 07:00 Moving to VFMC to build a private markets team with Leo de Bever. 08:00 The private markets program was eventually shut down, probably for political reasons, but I think I earned other people quite a few bonuses 10:00 Private equity has proven to be a powerfully positive part of portfolios but there was a time when we had to make the case for it and boards were very skeptical about it. 11:00 Private equity challenges people who come from an efficient market hypothesis background. It is not a perfect market and it is the alpha of change 15:00 If there is not much you can add to an investment, then it is a commodity and you shouldn't pay much for it. 16:00 If you are brought up in an efficient market hypothesis framework, then it is very hard for them to think of a market where there are information asymmetries and where the investor is effective change by being present. 18:00 Cultural differences between listed and private market teams and the challenge it poses to total portfolio management. 21:30 The water cooler discussion between listed and private equity specialists breaks down because the experience is so different 22:30 Getting involved in the Pacific region 25:00 My role was really about governance. Even in Australia and New Zealand, the attitude that company directors are part of a special club existed not that long ago 28:00 Revisiting risk in the PNG economic context was difficult 32:30 Taking on the CIO role at the Cook Islands National Superannuation Fund 34:00 If you take the good thinkers on governance – The Thinking Ahead Institute, Keith Ambachtsheer – their thinking was something the Cook Island board very much had 36:00 We have many retirement conferences in Australia trying to figure out what our retirement solution is, whereas the Cook Islands figured this out 20 years ago 37:00 We've gone to a reference portfolio approach 40:00 Members demanded options. Have they actually exercised their choice? 41:00 Right now, about 85 per cent of members are in the original defaults, so people have moved 46:00 Getting involved in member education in the Cook Islands 48:00 Sharing insights between island funds 50:00 On the joint venture capital fund 55:00 Do you incorporate ESG? It is often seen as a rich country's problem

In this episode of the [i3] Podcast, we look at machine learning and artificial intelligence. Our guests are Kaggle Founder Anthony Goldbloom and Stanford CS Professor Chris Manning, who are both involved in venture capital firm AIX Ventures, as investment directors. We speak about the state of play in machine learning and artificial intelligence, the most interesting applications, including ChatGPT, and opportunities for investors in this space, covering smart sensors, travel agents and personal assistants. Overview of the podcast: Anthony Goldbloom: 04:00 The idea for Kaggle came from a conference competition 06:00 Looking for the most accurate algorithms 07:30 Before Kaggle, every academic discipline had their own set of machine learning techniques 08:00 One technique won problem after problem 09:00 Rise of neural networks: 2012 is often called the annus mirabilis for machine learning 10:30 I'm mind blown by what you can do with ChatGPT 11:30 Using summarization through ChatGPT 12:30 We are in a world right now where the capabilities of these models run far ahead of the applications. People haven't really build companies around these models yet 14:50 The rise of chat-powered travel agents? Adding databases to ChatGPT 17:00 Why was Google interested in Kaggle? 19:00 Tweaking the value estimation algorithm for US real estate website Zillow 21:00 Surpassing physicians on diagnosing lung cancer 22:30 Two Sigma and Optiver also used Kaggle to solve problems 23:00 Hedge funds who crowdsourced investment problems 24:00 Being a one person band is hard in investing: you need to not only find the alpha signal, but also implement the trade in a way that doesn't move the market 27:00 Does machine learning work in time series? Yes, but it requires more babysitting if your algorithm works in an adversarial setting 32:00 What I bring to AIX Ventures is the understanding of where the gaps are in the tools for machine learning 33:00 Examples of companies we invested in 35:00 Embedding ultra light machine learning into appliances Chris Manning: 37:24 I was interested in how people learn languages, while I was always playing around with computers. Then I became interested in Ross Quinlan's ID3 algorithm for natural language processing 40:00 I started to work with large digital language databases slightly before the world wide web really kicked off 43:00 The combination of neutral networks and predictive text led to the revolutionary breakthroughs we see now with ChatGPT 45:30 You can use ChatGPT for text analysis, such as sentiment analysis or summarization of specific information 46:00 These models are just wonderful, but of course there are still problems. On occasion these models tend to hallucinate. They are just as confident producing made up stuff. And at times they lack consistency in thinking. They will say things that contradicts what they said previously 47:00 Human learning is still far more efficient in getting signal from data than machine learning 50:00 The majority of businesses are conducted through human language, whether it is sales or support. These models can help people work fast and better. 52:00 The case of Google and zero shot translation 57:00 Facebook experimented with two systems talking to each other, but they found the systems would not stick to English, but developed a more efficient symbol system 1:00:00 Interesting businesses we've invested in: weather prediction 1:02 A lot of computing that was previously done in the cloud is now done on the device, which is much quicker 1:04 Can NPL read the sentiment of a market by consuming just a lot of text? Well, a lot of mob mentality is expressed in language rather than numbers 1:07 The start of AIX Ventures and the two Australians 1:11 What might be the next big thing in NPL? 1:13 Future applications of language models might potentially look at video and personal assistants

Tanya Branwhite is the Head of Portfolio Construction at the asset manager for the state of New South Wales, TCorp. In this episode, we speak about Tanya's early career, including ruffling some feathers at Macquarie Group, TCorp's interpretation of a Total Portfolio Approach and the lessons we should have learned from the GFC. Enjoy the show! Overview of Podcast with Tanya Branwhite, TCorp: 01:00 Starting out as a credit analyst with Elders Finance Group: “It was a fairly interesting baptism of fire…” 03:00 The Macquarie years. The ‘loose/tight' culture of rules and entrepreneurship 05:30 During the GFC, I wrote research highlighting that a number of Macquarie vehicles had significant financial risk. That wasn't well accepted within the organisation at the time. But I learned to stand by the rigour of my analysis. 07:30 Ultimately, it made my career at Macquarie, because I became sought after for client work 09:00 Leaving Macquarie for the Future Fund 11:30 The Future Fund didn't feel like it was a restrictive environment from a government-owned perspective. It is a company that is owned by the government, not a department of the government 13:30 How has a Total Portfolio Approach changed the investment portfolio? 17:00 Risk is at the heart of what we do, because we can only control risks and outcomes are the result of that risk. 18:00 Equity risk is at the centre of this model. 21:00 Diversification away from equity risk in an environment where equity and bond correlations are positive 23:00 Not just unlisted assets, but illiquid assets can help diversification. For example, we own a number of hydroelectric dams in Canada. 26:00 Challenge in fixed income is even higher than before, because real returns are a challenge 26:00 Bonds almost had their own global financial crisis last year; it was a three standard deviation event 28:30 We prepare, but we can't predict 34:00 On valuation frequency of unlisted assets: we do try to de-smooth valuations of unlisted assets. And sometimes these assets need additional capital from investors during periods of crisis; that is not often thought about 36:00 Managing liquidity 39:00 We are looking at natural capital and opportunistic liquidity 40:00 Reducing the number of managers, has this work finished? 42:00 On implementation and efficiency

Sean Anthonisz is the Head of Investment Strategy of Mine Super, a pension fund for the mining industry. In this episode, we talk to Sean about his background in academia and the intersection with investment implementation, the use of 'fairly loose graphs' in the industry, P-hacking and decarbonisation in a mining fund. Please enjoy the show. Overview of Podcast with Sean Anthonisz, Mine Super 01:00 Does your background in academia give you a different perspective on investing? 02:00 P-hacking in academia 05:00 Getting started in investing 07:00 How good are asset owners in picking managers? 09:00 New research coming up on costs of switching managers 11:00 Don't fire a manager too early, because the costs involved are very large 15:00 On folklore in the investment industry 17:00 Sometimes conclusions are drawn from fairly loose graphs, even by regulators 19:00 Where quant analysis is most useful is in staying away from problems 24:00 The Black Scholes option pricing model 25:00 Is investing an art or science? 26:30 For me it is about using science to avoid problems, not using science to predict the future 29:00 Looking at tactical tilting 31:30 How do you address climate change and decarbonisation in a super fund for the mining industry? 36:00 Addressing ESG driven tilts in portfolio? 38:00 Are you planning more papers? 39:00 Machine learning: we actually can now see what some of these models are doing

Last month, scientists from the Lawrence Livermore National Laboratory, a defence facility that sits under the US Department of Energy, announced that they had achieved a nuclear fusion reaction that produced more energy than it took to ignite it, using high-powered lasers. The announcement was both celebrated as a milestone in science and criticised as an overhyped media spectacle. In this episode of the [i3] Podcast, we speak with Dr Warren McKenzie, founder and Managing Director of HB11 Energy, an Australian nuclear fusion company, about the importance of the experiment, the relevance to fighting climate change, the need for a domestic laser industry and investment opportunities relating to nuclear fusion energy generation. Overview of Warren McKenzie Podcast 01:00 About HB11 Energy 03:00 Scientists in the US have achieved a net gain in energy from nuclear fusion. How important is that result? 04:30 We were the first fusion company to demonstrate any fusion 05:50 The next results in the years to come are going to make massive increases on that net energy gain 06:00 Essentially they are creating a mini star 08:00 This is not the path to clean energy. It has proven the science that will lead to many advancements in technology that [ultimately] will see it happen. There are a lot of technologies around the edges that need to be improved. 10:00 The benefits of Boron: we have a much easier engineering pathway ahead of us 12:35 Lasers are the key to making nuclear fusion happening 17:00 There is a whole range of new applications that have recently been proven that have been enabled by these high-powered lasers 18:00 Rather than having a laser that pulses a few times a day and then needs to cool down, we need a laser that can pulse 10 or 100 times per second, 24/7 20:00 What key industries will grow around a nuclear fusion industry that might be interesting to investors? The main driver will be defense 21:45 It is not secret that Lawrence Livermore is a defense lab 22:30 For the infinite money that is available to these labs, I would like to see them put more into green energy than just into making sure that the world is a little scared of the US' nuclear stockpile 23:00 From boron you can't make a bomb 24:00 Will nuclear energy help with fighting climate change? 26:00 We will definitely see energy being generated by nuclear fusion by 2050 28:00 To accelerate the development of nuclear fusion, we need to lift the ban on nuclear research in Australia 30:00 Breaking the vacuum of space 32:00 Australia developed 90 per cent of the technology that is in solar cells today, but China has led the commercialisation. Let's not have the same thing happening with nuclear fusion

In episode 78 of the [i3] Podcast, we speak with Ian Patrick, Chief Investment Officer at the Australian Retirement Trust. We delve into the latest developments of the merger between legacy funds Sunsuper and Qsuper, we discussed inhouse asset management and the impact of decarbonisation. Enjoy the show! Overview of Podcast with Ian Patrick, CIO of the Australian Retirement Trust 01:00 Coming to Australia 03:00 JANA, from consultant to CEO 04:00 Becoming CIO; focusing on a single investment challenge 06:00 What is left in the merger with QSuper? 08:00 We are working towards an ART culture, not two legacy cultures, but that takes time 10:00 Harmonising the portfolios and strategies 13:00 Aligning QSuper's risk balanced strategy with Sunsuper's peer aware strategy 16:00 Your Future, Your Super: failing the performance test is almost an existential question 17:30 Asking us all to be held accountable on some measure of performance is a no brainer 19:00 The impact of scale 20:30 The diseconomies of scale are significantly outweighed by the benefits 23:00 In a very large fund, the ability of a CIO to directly influence investment decisions other than through team governance is lost 24:00 The ability to take on illiquidity in Australia is constrained by the 30-day rule and so Australian funds will not be able to fully embrace the Canadian model 25:30 Internalisation: never say never 30:00 There are strategic functions that are critical to internalise 32:00 Pandemic: what stood out is that all strategies correlated poorly; there was no diversifying correlation from alpha in any asset class. It did cause us to reevaluate the role of sovereign bonds in the portfolio 35:00 The energy transition, decarbonisation and portfolio skews

Geoff Bazzan is Head of Asia-Pacific Equities at Maple-Brown Abbott. In this episode of the [i3] podcast, we speak about the Asian equity markets, whether value-style investing is suited to the Chinese market and the recent geopolitical upheaval. Please enjoy the show. Overview of podcast with Geoff Bazzan, Maple Brown Abbott 01:00 Starting at Maple Brown Abbott more than 35 years ago 03:30 Changes in investing over the years: more tech, more participants and more news flow 05:00 Starting as a graduate at NAB in banking 06:30 China and the recent volatility 08:30 Xi JinPing's third term and the market impact 10:30 How do geopolitical events inform your investment decisions? 11:00 Regulatory crackdown in China 13:00 Buying into the selloff 13:30 Value investing and Chinese technology stocks 17:00 India 18:30 The Indian economy has proven very resilient to the oil price this time around 19:00 Demonetisation in India had an unnecessary negative impact on the economy 19:30 It is hard to find stocks that are good value in India now, but our biggest exposure is to financials 21:00 We've gone from an overweight to India a few years ago to a modest underweight. Demonetisation in 2016 was an opportunity to pick up some stocks 24:00 Vietnam is an interesting market from a demographic perspective, while Korea is interesting from a contrarian standpoint 26:30 China has committed to carbon neutrality by 2060. How important is that for the stock market? 29:00 In some respects, there is still a green bubble in the Chinese market 31:00 How do you see the interplay between the energy transition and value investing? Value companies tend to be more in the utility and energy space, rather than technology sector? 32:00 The whole Chinese market looks like deep value at the moment 34:00 In Australia, the commodity cycle continues to bail us out, as it has done in the last decade or so. 35:00 Favourite trades over the years?

Henrietta Pacquement is the Head of the Global Fixed Income Team at Allspring Global Investments (formerly known as Wells Fargo Asset Management). In this episode we look at the differences between the US and European fixed income markets, the likelihood of a recession and how to place portfolios and the impact of the energy transition on credit. Please enjoy the show. Overview of Podcast with Henrietta Pacquement, AllSpring Global Investments 01:30 From astrophysic to fixed income 03:00 On inflation 07:00 Dealing with behavioural aspects of inflation and wage growth 08:00 Difference between US and EU fixed income markets 09:00 Some cracks are starting to form in the US economy 09:30 Looking to close our underweight on interest rates 12:00 How does the energy transition play out in the credit market? 13:00 We see a lot of innovation, including green and transition bonds 14:00 Credit instruments can be quite precise in targeting sustainable outcomes 15:30 The war in Ukraine has given us a preview of what the world looks like when we have to quite fossil fuels cold turkey and it is not pretty 17:30 Does the long term nature of the energy transition affect duration of credit related to it? 19:00 Measuring outcomes in green and transition bonds 21:30 Greenwashing 24:00 There have been a number of green bonds that have been stripped of their green credentials 28:00 Do you see higher levels of defaults already? 30:00 Longer duration? We will go neutral first.

In this episode of the [i3] Podcast, we speak with Simon Russell, Founder and Director of Behavioural Finance Australia, about his new book: ‘Behavioural Finance: A Guide for Listed Equities Teams'. We talk about how institutional investors are not immune to biases, even if they are aware of them. The application of behavioural finance to selling discipline and the relationship between intelligence and these biases. Enjoy the Show! Overview of Podcast with Simon Russell: 01:00 How this the new book come about? 04:00 Biases are not just the domain of retail investors 04:50 Regression to the mean 07:00 Retail investors usually don't have their own earnings forecast models and so are not susceptible to biases around regression to the mean in that context 08:00 Awareness of biases is rarely sufficient, but it is a good starting point 11:30 Issues around selling decisions 13:00 There is a bias towards seeing sell decisions as the result of an investment mistake 15:00 On overconfidence and uncertainty; we actually know much less than we think we do 19:00 Biases are not always the main culprit of poor decisions. Often it is just about noise. 20:00 Precommitment strategies in case of losses 25:00 Confirmation biases; they are hard to deal with because they are subconscious. 31:00 Often we are told to take the emotion out of investment decisions, but Antonio Damasio shows in his book ‘Descartes' Error' that without emotions people are completely indecisive 32:00 Can we ever rely on gut instinct? 35:00 Can fostering a certain corporate culture mitigate the worst effects of behavioural biases, for example Ray Dalio and his philosophy of radical transparency? Yes, culture is important. 40:00 IQ and behavioural biases: can we outsmart them? 42:00 Cognitive reflective test 44:00 Checklists can come in handy. They are not there to teach you how to do things, but to remind you of things you might forget. 45:00 Next book might be on unlisted asset investors Check out Simon Russell's new book, ‘Behavioural Finance: A Guide for Listed Equities Teams, here: https://www.amazon.com.au/Behavioural-Finance-guide-listed-equities/dp/0994610254/

In Episode 74 of the [i3] Podcast, we speak with David Elms, Head of Diversified Alternatives and Portfolio Manager, Janus Henderson Investors. David, an Australian based in London, discusses the changing nature of bonds and their correlation to equities, trend-following versus option strategies and he tackles the idea that illiquidity stabilises portfolios. “You can paint illiquidity as a feature instead of a bug, but I don't believe in that,” he says. Enjoy the show!. 2:50 I got into investing by trying to fend off Robert Holmes à Court's attempt to take over BHP in the 1980s 5:00 Helping establish Portfolio Partners. “If you are thinking about starting your own firm, then do it.” 5:30 It is good to experience the energy and common purpose of a start-up, because it is great if you can bring some of that to the teams you are leading later in your career. 7:30 In the current environment of high inflation and changing monetary policy you have to be careful with backtests. 8:00 You have to be careful saying ‘this time is different', but what has changed is the role of bonds in a portfolio 9:45 You can look back in history, but you need to be aware that the 1970s was a different place. The market participants was different, the role of retail was different and the scale of hedge funds was very much smaller 12:30 Trend-following strategies have paid off this year. Is this a vindication of Crisis Risk Offset strategies? Trend-following has a place in a crisis alpha portfolio, but there is no one silver bullet. 14:30 In the event of something like 9/11 or the Fukushima nuclear disaster, where markets react instantly, trend-following doesn't work. There you need to rely on options for protection. 16:00 Two per cent inflation seems to be the point where the bond/equity correlation flips from negative to positive and becomes amplifying. 20:00 The way the pandemic played out is not the only way it could have played out. 21:00 During the pandemic, private market investors could pretty much close their eyes and stick their fingers in their ears and ride out the volatility. But I think that will be harder in the years to come. 21:30 You can paint illiquidity as a feature instead of a bug, but I don't quite believe in that. I don't think you stabilise a portfolio just by not marking to market. 26:00 The reason why correlations go to one in crises is often behavioural. 28:00 Protection strategies can be expensive at times and cause drag on the portfolio. How do you think about the implementation of such strategies? 33:00 CPI plus investment targets, where they stand today with high inflation, are heroic. 36:00 I think investing will get harder, not easier. 37:50 SPACs will go back to being one of those weird things that happened in the post-COVID era.

In this episode of the [i3] Podcast, we speak with Bob Maynard, Chief Investment Officer of the Public Employees Retirement System of Idaho (PERSI) at the eve of his retirement, after 30 years with the fund. We look back at how a job as the deputy attorney of Alaska saw him getting involved with investing and how he has stuck to his mantra of keeping it simple. “Whenever I get a bright idea, I go to a dark room and lay down until it has passed,” he quips. Bob addresses whether defined benefit systems are doomed, expels myths around US pension funds underfundedness and why he believes CalSTRS' Chris Ailman is the best CIO on the planet. 1:00 Moving to Alaska at a time when it was still a frontier state; the state was only 19 years old 6:00 Working on some of the largest oil and gas litigation cases in US history, including the Trans Alaska Pipeline case 9:00 The Alaska Permanent Fund and the link with oil and gas litigation 11:00 Slowly the fund moved away from just bonds to include real estate. So I couldn't afford my own house, but I knew how to buy an office block in New York. 12:00 Setting up the first currency program with the help of Fischer Black 13:30 Phone calls with Fischer Black locked you into a way of thinking about markets and I probably used that more than anything over the last 30 years. 15:00 [At PERSI] we only do eight to 10 things [in our investment strategy], but if I would be doing 25 things then currency would be in there. 16:00 The mean variance model is not that complicated 17:30 Joining PERSI you found a fund that was more than 60 per cent underfunded. Did you know that? 19:30 “The chair said: ‘Just get us in the middle of the pack', and I thought: ‘I can do that; I can be mediocre” 22:00 There are a thousand ways to invest. You just have to find the right way for your particular set of circumstances. 26:00 The 90s were a great time to be a 70/30 fund. 27:00 The best place to be in the last 10 years was the S&P 500 [index] 28:30 [Institutional investors] are not long term investors; we use it as propaganda to get us through tough times. 31:00 There are times in history where there is a fundamental shift in equity markets, but whether that means you should move out of equity markets…There have been a number of those [approaches] since the 1990s that looked at that and none of them have proven to be able to move through troubled times. 32:00 When there is excess liquidity in the system, all sorts of things work 36:30 The idea of what an unfunded liability is is completely misunderstood. Under an entry age normal accounting system we assume that people are going to earn double of what they earn today at the end of their career. If we would shut off the system today and look at the actual liabilities then we would be 140 - 150 per cent funded. 38:00 There are funds that are in trouble, but that is because some of them cut their contribution rate to below cost 45:00 Investing is about attitude: whenever I get a bright idea, I go to a dark room and lay down until it has passed 47:00 Listening and learning from other state pension funds' board meetings. I've learned more from listening to [Chris] Ailman than from my own fund; he is the best CIO in the world as far as I'm concerned. 50:00 You retire on 30 September 2022. Any plans? “I'm going to do what I do best: nothing”.

Why should institutional investors care about biodiversity in their investment strategy, when they are still embarking on the net zero journey? Because it is most likely to be the next area of focus for regulators and society more broadly, Caroline Cantor of Federated Hermes says. BTW, did you know the average person eats about a credit card worth of plastic a week through micro plastic pollution? The problem of micro plastics: there are statistics that say the average person now eats a credit card of plastic on a weekly basis Overview of Podcast with Caroline Cantor, Investment Director, Federated Hermes: 01:00 Starting out as an engineering student 03:00 Why is biodiversity important from an investment perspective? 04:00 As more environmental policies will come out, we think they will focus on protecting Biodiversity 05:00 If biodiversity deteriorates any further, how will that affect a company's supply chain? We don't think they factor that in. 08:00 How much does the theme of biodiversity overlap with potentially other ESG policies within an organisation? 10:00 The Six Themes of Biodiversity 10:30 Is biodiversity as an investment theme not too niche for an institutional investor? 11:00 More than 50 per cent of GDP activity is dependent on biodiversity 14:30 The problem of micro plastics: there are statistics that say the average person now eats a credit card of plastic on a weekly basis 15:30 Federated Hermes works together with the Natural History Museum in London on this? Where do they come into play? 17:30 The Biodiversity Intactness Index 22:00 The concept of natural capital 26:00 It is important to also engage with some of the biggest polluters out there. 27:00 How does this theme interact with the UN Sustainable Development Goals? 29:00 Plant-based diets, food producers and valuations 32:00 There are 17 countries that account for 70 per cent of biodiversity. Does this lead to concentration in the portfolio? 34:00 We've seen particular interest from investors who are based in countries that have been affected most by a reduction in biodiversity 35:00 COP 26 and the outcomes for biodiversity 37:00 Portfolio companies that address deforestation: Brambles

Nick Abrahams is the Global co-leader of Norton Rose Fulbright's Digital Transformation Practice and a futurist. In this episode, we talk about digital assets, the value drivers behind non-fungible tokens (NFTs), cybersecurity and negotiating with ransomware attackers. Overview of Podcast with Nick Abrahams, Norton Rose Fulbright 01:00 You are a lawyer by trade. How did you get involved in the digital disruption space? 05:00 The application of NFTs; bored monkeys and basketball collectors' items 07:00 NFTs are bought by crypto-natives 09:00 Ticketing for sport and music events is a good application of NFTs 10:44 On digital twins 11:00 Token option plans for privately-held companies 13:00 Tokenomics 15:00 For an investor the question is: are you going to punt on the thesis that digital assets are not a thing? 17:00 Are sales of NFTs driven by people anticipating the coming of the metaverse? 18:00 NFTs are partly about off-platform ownership, about not owning an item only in one game 21:00 How do you determine value in NFTs? 22:30 Penfold's loyalty NFT and the need for asset-backing 26:00 Are we still in the test phase to find out what is valuable and what is worthless? 27:30 Ownership of digital information, such has health or financial information 29:00 Cybersecurity and negotiating with ransomware attackers. 30:00 Are we winning the cyber war? 34:00 What is the development that you are most excited about? DeFi! 34:30 Nick's podcast: Web3 From Mystery to Mainstreet

John Reade is the Chief Market Strategist for the World Gold Council. John is not only a former investor with a well-known US hedge fund and strategist with investment bank UBS, he actually started out in the mines of South Africa as an engineer. In this podcast, we talk about gold as a long term asset, the potential as an inflation hedge and discuss some of the common criticisms of gold voiced by institutional investors. Please enjoy the show. Overview of Podcast with John Reade, World Gold Council 02:00 My father was the second most important engineer on the Queens Elizabeth ocean liner, so I have been surrounded by bits or metal and projects around the house since young 03:00 My mother wanted me to become an accountant, which seemed rather boring to me, but mining and traveling around the country seemed really interesting. 03:30 I was told that I would struggle to work with all these Northern miners who were rough and tough and ended up working underground and in projects in South Africa 05:00 My mining background allowed me to ask questions of mining companies they were not expecting 07:00 I always had an interest in financial modeling, even when working in mining, and eventually went into stock broking, covering South African mines. 09:00 I had been frustrated as a gold analyst in the 1990s, because the gold price was basically flat to heading lower. 11:00 During the GFC gold went up again and I got to speak to lots of people and tell them my views 12:00 It is your job to love gold, but from an institutional investor perspective isn't gold speculative? Is it possible to determine the intrinsic value of gold on a consistent basis? 13:30 I'm not one of these gold bucks that you see all over social media. We look at gold as a strategic, long term asset 16:00 Moving to an integrated model to determine the gold price 19:00 Is the role of gold in a multi-asset portfolio simply to be a disaster hedge? 21:00 Gold is not the only asset that hedges against inflation as was the case in the 1970s, you now have inflation-linked government bonds, but it has a lot of useful attributes to hedge against inflation as well 22:30 You often hear from commentators that gold isn't a very good hedge of US CPI. That is true when there hasn't been a lot of CPI 26:00 Correlation between gold and US monetary policy 28:00 The long term impact of geopolitical event, such as the invasion of Ukraine, on the gold price 30:00 If we end up with an environment of lower growth and higher inflation, then yes that will have an impact on gold returns 31:00 Are cryptocurrencies a form of digital gold? “That is nonsense. It is not behaving like a store of value; it is behaving like a risk on asset”. But there are some similarities 34:00 You can't have a store of value when you have an implied volatility of 50 - 150 per cent 35:30 What is the best way to gain exposure to gold in your experience, gold companies, commodities, or ETFs?

Pablo Berrutti is Senior Investment Specialist, Sustainable Funds Group at Stewart Investors. Starting as a risk specialist, Pablo became quickly aware of the dangers of climate change, even before he knew what ESG was. In this conversation, we discuss the likelihood of fossil fuel-based companies making the transition to low carbon business models and pose the question whether companies' quick retreat from Russia during the invasion of Ukraine is a vindication for ESG. Overview of podcast with Pablo Berrutti, Stewart Investors: 2:00 Becoming aware of climate change as a risk manager 3:00 Missing out on a mandate due to lack of ESG policy 4:30 My questions on climate change led to a role at an SRI fund 7:00 Risk and reward are the two sides of the same sustainability coin 10:00 You have described ESG metrics as ‘colouring by numbers'. You don't seem a fan of these types of metrics? 12:00 The sin of aggregation 13:00 Companies still have different boundaries in how they measure their carbon footprint, so it is not a generic measure 16:30 We look at fossil fuel companies and we just don't see how they are able to transition profitably 18:00 We actually like the companies that we invest in and we want them to succeed, so there are not that many shareholder resolution filed at the companies in our portfolio 19:00 Discussing negative screens: ‘For us, they don't make sense.' 21:00 On macro events, such as the pandemic and Russia 25:00 It is another example of companies that lead the charge on sustainability can come out of these situations stronger 26:30 Several large, multinational companies pulled out of Russia relatively quickly. Do you see this as a sign that ESG has finally become mainstream? 28:00 Did any of your portfolio companies react unexpectedly during the pandemic? 29:00 Belarusian company EPAM did the right thing and focused on their staff 31:00 Are you worried about the dominance of large technology companies? 32:00 TSMC is one large tech company we can get behind 33:00 Between 2010 – 2019, large tech acquired 819 small companies that were below threshold reporting requirements, see report. 36:00 Are you excited about any particular technologies? ‘Yes, steam'. 40:00 Diversity study with the University of Technology Sydney (UTS) 41:00 Inclusion has to come before diversity 43:00 Sometimes change really has to come from the CEO 47:00 Talking SDGs, three things to look out for whether companies are overstating their contribution to the goals

Sue Brake is the Chief Investment Officer of the Future Fund. In this episode, we talk about the fund's 15 year celebration, looking at the early days of how the fund started to invest just as the global financial crisis began to impact markets. We also discuss the recent investment strategy review and look at the years ahead. Please enjoy the show! To access the book 'Celebrating 15 Years of the Future Fund', which includes interviews with Raphael Arndt, Peter Costello, David Murray, David Neal and David Gonski, please see here: https://15years.futurefund.gov.au/ Overview of Podcast with Sue Brake, CIO of the Future Fund 1:00 Celebrating 15 Years of the Future Fund 3:00 On the bravery not to invest in the early days, when the pressure was there to chase the market 4:00 You can't time the markets, but you can pause and try to understand what is going on in the market 5:30 The fund is required to achieve its investment target without taking excessive risk. What is ‘excessive risk'? 6:30 What the founders did extremely well is to put the mandate at the centre of decision making. 8:00 During the pandemic drawdown, we made over 30 decisions of $1 billion or more. 10:30 Leading up to the pandemic, we had discussion whether the Australian dollar wasn't as pro-cyclical anymore as it had been in the past. 13:00 I thought I had the total portfolio approach nailed and understood the Future Fund way 15:30 Building a future fund academy: “We are no longer small enough that you can get by on word of mouth; it needs a bit more formality and structure”. 18:00 There is an ownership of the portfolio by everyone, rather than a culture of defending your patch 20:00 I used to think being mandated to use external managers was a terrible idea, but I've flipped on that [opinion] completely. 21:30 We take fees incredibly seriously, but we are not silly about that. 23:30 The way we think about partnerships is specialisation 24:30 The good managers get to choose who they partner with, because capital is just more plentiful 26:00 Looking back at the beginning, the Future Fund deployed most of its capital during the financial crisis. Was it a lucky break that the fund got to enter the market in a downturn? “It could have been a disaster.” 28:00 The Future Fund has stuck with an equity allocation of 30 - 40 per cent during its 15 years of investing. What is the philosophy behind that? 29:30 Apart from a large allocation to private markets, we've had more currency exposure [than a typical super fund] 32:00 Strategic review – it is always hard to say: ‘we are going to take structurally more risk', when there has been a ramp up in risky assets. 33:30 Where are you looking for more risk exposure? 35:00 When we looked at how big the fund had become, it became clear that this much liquidity wasn't the best use of capital 37:30 The strategic review concludes that bonds have lost some of their defensive qualities. Are government bonds toast? 40:00 The defensiveness of the portfolio comes from our hedge funds, currency positions, some aspects of emerging markets that are less correlated [not so much government bonds]. 41:00 What changes do you expect when the fund goes into withdrawal mode?

Hamish Chamberlayne is Head of Global Sustainable Equities at Janus Henderson Investors. In this podcast, we talk about Hamish' background in analysing energy companies, the sense and nonsense of ESG ratings, reliance on technology and opportunities in Australian listed companies. Please enjoy the show. Overview of Podcast with Hamish Chamberlayne 2:30 I've always been interested in how the natural world interacts with the financial world 3:25 Ironically, I started my career analysing natural resources companies 4:30 Energy is something that explains everything when you go deep down in the fundamentals 5:00 Ultimately, all energy comes from the sun and there is no rule that we have to use depleting fossil resources 7:30 What is the difference between a sustainable investor and an investor with a decent ESG policy? 8:00 We have always been very firm in our idea that it doesn't make any sense to talk about ESG scoring 8:20 The idea that you can take all of these different issues and collapse them into a single score doesn't stand up to intellectual scrutiny. 10:00 There should be no performance penalty if you are going to follow the sustainability route. Quite the opposite. 10:30 The natural world and the financial world don't live in isolation. Recognising that is what sustainability is at its core. 14:00 The definition of sustainability is essentially the ability to generate wealth without jeopardising the ability of the future generations to generate wealth. This idea that we are not depleting. Yet, the economic model of today is one of depletion. 17:00 Are we relying too much on technology to invent our way out of the climate crisis? 18:00 Net zero, can we do it? Yes, but can we do it in time? That is the big question. 19:30 We need to move away from a fossil fuel, analogue economy to a digital, electrified economy 20:30 We took a very positive view towards COP 26 22:00 Don't get distracted by the minutiae of COP 26; the general direction is very positive 22:30 China net zero by 2060: I'm very confident that they will beat that. 25:00 The pandemic and Atlassian. 26:30 We have never been an investor in Meta, or Facebook, but we do see a lot of applications of the metaverse in other industries 28:00 Inflation bears the seeds of its own destruction 30:00 Efficiency is one of our big investment themes. 31:00 Growth will always outperform Value when it comes to investing 33:00 Value stocks were cheap companies that still had growth. They were cheap growth stocks. But now we are in an environment where there isn't universal, broad-based growth 35:30 I'm a value investor, investing in growth stocks. Because ultimately I want to invest where I see value 38:30 Looking at Texas Instruments gives you a snapshot of what is going on in the world today; this proliferation of technology in all parts of the economy 39:00 We see the electrification of transportation as one of the most bankable trends this decade. We find it too difficult to predict which companies are going to win, but ultimately they are all going to need all the widgets that go into an electric car. 40:45 Is the Internet of Things a sustainable theme with all the additional energy it needs?

Adam Gilmour is the co-founder and Chief Executive Officer of Australian rocket company Gilmour Space. His business is backed by some of the largest institutional investors in Australian, including Hostplus, HESTA and NGS Super, as well as several venture capital firms. In this interview, we talk about the business of rocket launches, space cargo, interest from institutional investors and Chinese spies. Enjoy the show and don't forget to subscribe through your favourite platform. Overview of podcast with Adam Gilmour, CEO of Gilmour Space 1:00 Starting as a derivative trader 3:30 Where do you start launching rockets? ‘You start small” 6:00 We are the Fedex of space 7:30 We started the company to take people into space 8:00 I fully intent to go to space in one of my vehicles 8:45 Pension funds backing Gilmour Space 10:00 There is an element of nation building in Australian super funds 11:30 Challenges of being an Australian-based space company 13:00 We estimate that the industry for launching small satellites into space will grow to $5bn by 2025 14:30 Impact of the pandemic: supply chain issues 16:30 How do you build a rocket. 17:30 How Gilmour Space become the object of Chinese spies 19:30 Putting people on Mars is unrealistic in the short term and inevitable in the long term. 22:00 If you are going to shoot things into space, the moon is a good place to do it 23:00 Favourite science fiction book: Orson Scott Card's Ender's Game 25:00 Getting to space in the next 12 months

John Pearce is the Chief Investment Officer of Unisuper, one of the best performing funds in Australia. We talk about in-house management, sense and nonsense of asset buckets, APRA's performance test and China. Please enjoy the show. Overview of Podcast with John Pearce, Chief Investment Officer of UniSuper 1:00 Starting in the back office of Westpac Investment Management 3:00 There is no way you can believe in market efficiency when looking at emotions take over in the dealing room 4:30 You need board support if you are going to run assets in-house 5:30 We didn't really have a vision going into in-house management. Visions can be scary things. 6:00 Michael Chaney's ‘Logical incrementalism' 8:00 Moving to in-house is a business transition, not a project. It can't be done in a day. 10:00 Best and worst trades 12:00 We had a $9.6 billion option position on during COVID, which gave us the confidence to buy more risky assets at the bottom of the market. 12:30 But our position in China is not looking good at all. 14:00 We should have loaded up on green tech two years ago when we decided carbon neutrality was going to play a big factor 14:30 If you had to put a label on Unisuper's investment style, then it would be growth at a reasonable price 15:30 Has in-house management changed the way you structure external mandates? 16:30 Yes, the questions are better and there is some bluff-calling 20:00 If there is a good investment, then we will find a home for it. Hybrides are a good example. 22:00 On China: “More than the average person, I know what I don't know.” 22:30 The last three months has really been testing our conviction [in China] and it is not Evergrande 25:30 If China invades Taiwan then all bets are off. You can't structure a portfolio based on that. 27:30 How do you solve the asset allocation problem of low yielding bonds? 28:00 We are looking at gradually increasing our unlisted assets 30:30 Views on the APRA performance test: “When you get results like that, you know there is something fundamentally wrong with the test.” 36:00 Since becoming a public offer fund, Unisuper has raised $6 million just through word of mouth. 36:30 Yes, we would be open to a merger, but it has to make sense for our members. 39:00 You don't build real culture over virtual meetings, so we decided as a team to come back to the office the same three days a week. 41:00 But there are also benefits of virtual meetings: our whole team gets to sit in our investment committee meetings

In episode 64 of the [i3] Podcast, we speak with Matt Benkendorf, CIO of Vontobel Quality Growth, a global equity strategy of Vontobel Asset Management. We spoke about the firm's unusual deployment of investigative journalists, how to create thoughtful portfolios when divesting tobacco and, of course, learnings from the global pandemic. Please enjoy the show. Overview of Podcast with Matt Benkendorf, Vontobel 1:00 How did you get started in investing? 2:00 Working in my parents landscaping business taught me how to work hard 5:00 I initially enjoyed fixed income more at university 6:50 Just had my 22 year anniversary at Vontobel 7:30 Bringing investigative journalists into the investment team 11:30 Intelligence, whether it is book intelligence or SAT scores, doesn't naturally correlate with investment success 13:00 That devil's advocate view is important to remain balanced. 14:50 Everything has hair; you don't want to be too negative 17:30 How do you prevent too much negativism? 20:30 Dealing with divestments 23:30 Engagement is the most powerful force to change 27:00 Ironically, you can substitute tobacco companies with defensive growth companies in health care 28:45 What is quality and what is it not? 33:00 How has the pandemic affected your investment philosophy? 35:30 The pandemic was a real wildcard 36:50 Coming out of the pandemic, who would have thought you would have record car purchases; big ticket items? 39:50 Nobody, in their modelling, predicted a period of zero revenue 40:30 It came down to accessible lines of credit, terms of lines of credit and how could they get cash burn rates down 41:30 The coiled spring of returns; returns are made in down markets, not up markets. 43:50 COVID was terrible and came at a big health toll, but for investors it gave them the opportunity to reshuffle the deck. 45:00 The more things change, the more they stay the same 49:00 Not everything has recovered yet and this provides low hanging fruit 52:00 It is now later cycle with a lot of warning signs flashing

Daniel Graña is a portfolio manager for emerging market equity with Janus Henderson Investors. In this episode of the [i3] Podcast, we spoke about the importance of top down analysis in emerging markets, regulatory change in China, the influence of the pandemic on the region and on his investment process, and nationalising local hardware shops in Cuba. Please enjoy the show. Overview of podcast with Daniel Graña, Janus Henderson Investors 1:30 My family's past in Cuba shaped my interest in emerging markets 2:30 Starting as an investment banker 3:30 Does your background give you a different view on geopolitical events? 4:00 What my developed market counterparts have realised since the global financial crisis is that the top down matters. 6:30 State or regulatory interference 7:30 What has happened in China in the last several months is a stark reminder of if you don't place these sort of political governance and top down considerations front and centre, then you are going to be surprised. 8:00 If you want to invest purely bottom up, then I think you shouldn't be invested in emerging markets 9:00 Why invest in emerging markets now? US equities seem to do better. 11:00 China and electric vehicles. 12:00 Innovation is key to escaping the middle income trap 13:00 Emerging markets with lower income disparity weathered the pandemic better 14:00 Future mutations of the coronavirus will come from emerging markets 15:30 COVID-19 didn't change my process, but it did evolved the questions we were asking 16:30 We had to make some hard decisions on companies with business models that do well in a pandemic 17:30 The pandemic caused consumer to try home delivery, where they might have still taken years to adopt this practice without COVID-19 20:00 I think more of people's behaviour is going to change as a result of COVID-19 than people appreciate 21:00 The internet could provide opportunities to SMEs to increase B2B sales 24:30 Since WWII there have only been five countries that have successfully transitioned from low to high income countries. 25:30 China has entered a period of regulatory bombardment; lots of micro reforms 26:00 We have failed to regulate big tech in the West 28:00 Three key themes in China: technology enabled businesses, decarbonisation and health care 29:00 The biggest story to come out of 2020 is COVID-19, but the second biggest story is China's commitment to carbon neutral by 2060 33:00 The scorecard has changed to now include decarbonisation measures 34:30 I was wrong on the business impact of social media 36:00 Some of my best investments have been figuring out where there would be a change in governance for the better