2021 Knowledge Brokers

Russ Ivinjack

Russ Ivinjack, as a senior partner and global CIO, manages Aon’s investment manager research teams in equities, fixed income, liquid alternatives, private equity, infrastructure, and private credit, as well as the firm’s global asset allocation and discretionary client portfolio management teams. He also serves as the lead strategist for several of the firm’s largest retainer clients and has advised on more than $1 trillion in client assets over the course of his career. He previously led the development of Aon’s alternative investment capabilities and its US client solutions team. A corporate CIO commented that Ivinjack ”should stay on the all-star list forever.”

Prior to joining the firm in 1994, he spent nearly two years in SEI’s performance evaluation area. Ivinjack holds a bachelor’s degree in finance from Northern Illinois University and a Master of Business Administration from DePaul University’s Kellstadt Graduate School of Business.

CIO: What new qualities do you look for in a manager/service provider given the pandemic’s financial and economic impacts?

Ivinjack: Two key qualities have emerged in what we look for in investment managers given the pandemic’s impacts: their ability to build and sustain a firm culture that thrives and investment impact. Known as Thrive and Impact, these are separate but integrated qualities that we look for, as they are a sign of a firm that is evolving to meet the new environment we are operating in.

Thrive is related to how a manager fosters an environment for its employees to learn, grow, collaborate, embrace diversity holistically, and successfully execute their investment strategy on the behalf of clients in a work-from-home, hybrid, and back-in-the-office environment. After all, investment managers are only as good as their collective talent and their talents’ ability to transfer their intellectual capital into successful investment performance.

Impact relates to an investment manager’s understanding of how its capital allocation decisions translate to not only investment performance and risk, but also the impact those investments have on all stakeholders (i.e., shareholders, customers, suppliers, employees, communities, etc.).

Thrive and Impact intersect at investment management firms as their employees and clients are focusing on how firms navigate this dual opportunity and risk, as firms that evolve from the challenges that emerged from the pandemic are far more likely to be successful.

CIO: What changes are you making to your asset allocation advice?

Ivinjack: We are advising clients to allocate—and are implementing on a discretionary basis—assets to both public and private non-investment-grade credit. Assets continue to be allocated away from investment-grade fixed income to multi-asset credit (i.e., high-yield, leveraged loans, and emerging market debt) and private credit (e.g., direct lending, real estate debt, private investment-grade and asset-backed securities, structured credit, and opportunistic credit). The trend away from investment grade and to non-investment-grade credit has been in place the past five plus years, and we foresee this continuing or likely accelerating, as clients’ return requirements have generally not changed, yields on investment-grade fixed income remain very low, and portfolio equity-risk allocations are appropriate for long-term investors.

The other asset allocation change we are advising on is within asset classes. We believe clients should benefit from opportunities from both a return and positive impact on society perspective and should look to allocate capital to impact investment strategies. That includes impact equity, infrastructure strategies that include renewable energy/energy transition, and Sustainable Development Guidelines (SDG) bonds.

CIO: What do you think will be the biggest innovation in your industry in the next 10 years?

Ivinjack: I’m sure the biggest innovation in the industry will be related to technology and artificial intelligence (AI). As I am not a technology futurist, I’ll withhold comment on what is to come next, but I believe the biggest changes in the industry will be related to how investment management firms will be positioned/structured. Firms will operate in or across four primary categories:

  • Alpha Producers: Boutique and midsized firms that focus on their skill of producing alpha in one or more strategies.
  • Asset Class Platforms: Firms that benefit from a research and portfolio management platform that allows them to add alpha across an asset class, such as growth equities, fixed income, and real estate, due to their breadth and depth of expertise across the opportunity set.
  • Solution Providers: This set of firms combines their skill sets (some excellent and not-so excellent skill sets) across asset classes to assist clients in meeting an objective. Emphasis is not on alpha and beta, but more so combining the two to create a risk-managed outcome. Multi-asset solution funds and outsourced chief investment officers (OCIOs) fall into this category.
  • SuperCenters: SuperCenter investment firms have capabilities in all areas and can meet almost any investor’s requirement: alpha, beta, solutions within and/or across asset classes in every vehicle type. Given the challenge and complexity to excel in all areas, as well as distribution, mergers and acquisitions (M&As) will create more SuperCenters.
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