In the latest episode of The Professional Investment Podcast, Mitesh Sheth, founder of OrgAlpha and ex-CEO of Redington, joins me to discuss this week’s FT asset management newsletter which focused issues with private credit and equity assets.
While market concerns about these asset classes are not new, it’s something that does not often get included in the debate about whether pension schemes should allocate to these asset classes.
Thinking about the change in the interest rate environment over the past few years, it’s surprising more companies have not struggled with higher debt costs.
Many have been able to role forward that debt but that won’t happen forever. The environment has also changed in private equity with asset owners now wielding more power and wanting private equity lawyers to become less aggressive!
Asset owners and managers are changing the way they design portfolios with a move away from strategic asset allocation towards total portfolio allocation. This approach aims to make co-ordinated decisions based on the total portfolio’s risk and return objective.
This strategy makes more sense for many large professional investors managing pension scheme assets as they have a very clear set of objectives about what they want to achieve for their members.
We discuss how larger pension organisations are already thinking about how they can make their portfolios more dynamic to be nimble in the face of risks such as credit uncertainty or concentration risk in US equities.
We end the discussion reflecting on the implications of this fundamental change in portfolio design for asset managers and owners who are already dealing with two decades of rapid change.
ABOUT THE GUEST:
Mitesh Sheth, FIA, MBE
Mitesh is an actuary, investment executive and board-level leader with experience of building successful teams, scaling businesses and developing innovative client solutions. He has recently founded OrgAlpha, a boutique consultancy, helping leaders unlock organisational alpha.
Professionally, Mitesh has held senior leadership roles in global investment firms, including serving as CEO of Redington, Chief Investment Officer at Newton Investment Management and Head of Fixed Income at Henderson Global Investors. He started his career as an Investment Consultant and Manager Researcher at Aon and WTW.
Mitesh serves on the Board of the Diversity Project, is a member of the Pathway Steering Committee (developing the next generation of female fund managers), and sits on the advisory board of the Asset Owner Diversity Charter. In recognition of his work building diverse and inclusive cultures within financial services, he was awarded an MBE in 2022.
⸻
ABOUT THE HOST:
Charlotte Moore is an award-winning journalist and co-founder of Moore Squared Communications. She has spent almost two decades writing about how the UK’s largest investment organisations allocate their capital for a number of different specialist magazines including Professional Pensions, IPE and MandateWire. She started this podcast to increase understanding of how and why the UK’s £3 trillion pensions industry invests its members’ capital to provide the best possible retirement.
🔗 https://lotsmoore.co.uk/
⸻
#Pensions #RetirementPlanning #FinancialWellbeing #StandardLife #ProfessionalInvestmentPodcast #CharlotteMoore #EstherHawley #UKFinance #PensionsCommission #InvestmentPodcast #MoneyMatters #FinancialLiteracy
Chapters:
00:12 – Introduction
00:16 – Introduction by Charlotte Moore
00:19 – Guest intro: Mitesh Sheth (Reddington, Org Alpha)
00:29 – News of the week
01:15 – Private equity & private credit
06:49 – Transparency & valuations in private markets
24:49 – Lessons from Reddington
26:53 – Leadership & people-first culture