2016 Knowledge Broker New Guard

Andrien Meyers

Meyers helped set up the London Collective Investment Vehicle pooling project for 33 public pensions while managing the £1.1 billion ($1.4 billion) Lambeth pension, and was subsequently hired by consultant JLT to build a comprehensive offering for the UK’s other investment pools. Oh, and he’s just become a father. Is there anything he can’t do? 

How do you defend investment consultants in face of critics?  

A number of consultants have recognized the trend towards pensions adopting fiduciary management. This has resulted in fee reductions from fund managers, which ultimately is a good thing for pensions. However, some solutions have become over-engineered, so fees are still too high. It is crucial that fiduciary management is appropriately priced.

Describe the weirdest interaction you’ve ever had with a client or potential client.  

At a committee meeting one person requested the presentation be in Arial font, size 12. The CIO of the organization then requested the committee chair provide that person with an iPad so he could enlarge/shrink the text to his satisfaction.

Design a hypothetical portfolio. An existing foundation in your home country has been invested in a 60/40 portfolio since its inception and is looking to clean the slate. The fund has US$3 billion in assets with a target return of 7.5%. The annual spending rate is 5%, and the fund receives an average of $70 million in annual inflows. Given today’s markets, how would you allocate the assets?   

 It’s a pretty ambitious target. There are significant benefits from investing in illiquid assets—say 15%. Such assets will offer a return premium above that currently generated by the foundation’s equity and bond holdings, and can also be used to generate income. I would recommend private equity, secured loans, and infrastructure. An allocation of 15% to property would further complement the illiquid portfolio. I would also suggest a 50% equity portfolio, constructed around a core of passive or smart beta funds with specialist active equity to generate alpha.  

Depending on cash flow requirements, 5% should be in cash. Donations should be used to help move the portfolio towards the benchmark or make tactical adjustments to the portfolio. Finally, 15% in fixed income would fit in nicely. 

What is your least favorite part of being a consultant?

The travel and spending time away from family.

What is the single most exciting investable idea you see in markets right now? 

Diversified growth funds. They help spread risk, minimize volatility, and achieve a reasonable return. 

Name your favorite food and drink. 

Wagyu steak and red wine.

The trend of consulting firms moving into OCIO is… 

A positive step for the pensions industry overall. A significant number of consulting firms have made the decision to enter this space, but many also made the decision to only offer traditional advisory services. We have also seen the emergence of consulting firms offering a review service of the various fiduciary management providers.

What will be the biggest innovation in your industry in the next 10 years? 

The growth of fiduciary management will continue and will most likely be the approach that is adopted by the majority of pensions, including the very largest. In the local government space, it will undoubtedly be the enhancement of the pooling agenda.