Finding the Path Forward: London Event Recap

Authors

Nasdaq for Asset Owners

Andres Ramos

Published

Dec 7, 2022 9:36AM EST

In early October Nasdaq hosted Finding the Path Forward, an in-person event in London with asset owners and asset managers to discuss how leading investors are navigating uncertainty and driving returns in today’s turbulent markets.

Here are some top takeaways from the event:

Flexibility in Portfolio Construction

Asset owners should maintain clear focus in their investment objectives but also retain flexibility in their portfolio construction to change direction if needed to navigate shifts in the market. A big part of that flexibility comes in the form of liquidity and a dynamic asset allocation structure. To take advantage of tailwinds and avoid headwinds in volatile markets, asset owners must have both flexible asset allocation targets and the available liquidity to take advantage of opportunities.

Risk Management and Modeling should be “Always-on”

While risk management has been a major talking point in 2022, our panelists pointed out that portfolio risk is something that asset owners should monitor constantly, and that no economic scenario should come as a surprise. One panelist noted that one of their stress cases analyzes the impact of USD/GBP parity on their portfolio, an event that nearly occurred this year. While some market risks are unavoidable, asset owners must be comfortable with the level of liquidity they have available in any given scenario.

Focus on Follow-Through in Portfolio Monitoring

Now is not the time to be asking fund managers how they intend to handle the volatile markets. Our panelists highlighted how they asked those questions during pre-investment due diligence and that their current portfolio monitoring processes focus on understanding how their managers have followed through on the strategies that were laid out during the initial process. More direct communication and engagement is reserved for the managers who have a direct mandate to invest opportunistically in challenged markets like today’s.

Watch the full panel replay here: