2023 Knowledge Brokers

Rowena Carreon

Rowena Carreon brings more than 25 years of global financial services experience across investment banking, corporate finance and asset management to Addepar. As the head of investment advisory solutions, Carreon leads a newly formed department to expand client relationships by leveraging Addepar’s unique data and insights.

Carreon joined Addepar from BlackRock, where she was a managing director for over a decade. At BlackRock, she led strategic initiatives focused on the development and launch of investment products, client solutions and servicing and business growth. Carreon led teams in multi-asset strategies and solutions, was the head of strategy and development for global credit, led pillars in the firm’s global product development group and started her BlackRock career as the chief operating officer for Asia-Pacific fixed income.

Prior to BlackRock, Carreon was the treasurer of Asia ex-Japan at Nomura. She also was the treasurer of Lehman Brothers Asia. Her early career was as an investment banker in New York City in securitizations and structured finance.

Carreon earned a B.A. in international relations from Tufts University.

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

Carreon: Technology, by the broadest definition, has the ability to shift value creation more directly to investors versus asset managers. Investors who have developed both their operating platform and systematic techniques have had an advantage. Over the next decade, we’ll see immense ongoing pressure to become more efficient and integrate alternatives and “other” asset classes into portfolios. Many technology platforms, in response, will keep building solutions for investors to expand their exposure to alternatives and nontraditional asset classes.

In addition, investors are seeking to manage and streamline their holistic portfolio data—especially for historically opaque asset classes, which are incredibly difficult to model and analyze. Higher-quality data and data-driven insights will be a key differentiator for investors. A strong data foundation and best-in-class technology will provide investors with more powerful insights, including integrating and automating diverse, nonconventional data sets.

Emergent technologies will also continue to challenge traditional financial services models. Large banks are investing in data infrastructure and acquiring both talent and companies. Equally, new companies are applying different paradigms in areas such as consumer credit and payments. This dynamic introduces new investment opportunities in venture capital, growth equity, venture debt and esoteric credit. Investors focused on technology are also likely to have emerging markets represented in new ways in their portfolios given the leapfrog in the digitization of banking, payments and mobile commerce.

CIO: What (actionable thing) have you learned over the course of your career that has proven itself this year?

Carreon: My early career was in securitization and structured finance, which included money market and commercial paper instruments. Cash has become a relevant asset class again after being dormant for more than a decade, proving the theory that so often rings true as we move through economic cycles: “History never repeats itself, but it does often rhyme.”

Now, cash management is being treated as a critical part of an investment strategy. Effective cash management requires an understanding of how to best trade off expected return, risk, liquidity, operational ease and tail scenarios. The impact on portfolio performance between a competitive cash management strategy and a poor one can be significant.

Another important lesson this year has been that market cycles can be long, and although markets can be fast-moving and dynamic at times, investors need to keep perspective of the full historic context. Interest rates have increased as they did in the 1990s, and while yield-curve inversion has historically been a recession indicator, the global economy is in a much different state than it was in the ’90s. As an example, emerging markets’ monetary policy has been ahead of developed markets in both tightening and easing; inflationary pressure has also been addressed more aggressively.

CIO: What macro themes will drive the most volatility for institutional investors over the next 10 years?

Carreon: While volatility presents both risks and opportunities, the majority of investors choose mitigation rather than increasing risk.

During and since COVID, we’ve been seeing geographic fragmentation and a defensive posture among countries regarding supply chains. This has introduced uncertainty in geopolitical dynamics that investors once thought were understood. Investors are reconsidering this evolving landscape and have to underwrite scenarios that seemed low probability or were unimagined even a few years ago. New alliances are forming, and the expansion of the group of emerging market growth countries that initially included Brazil, Russia, India and China will have consequences to their continued influence in the world order. The inclusion of Saudi Arabia and other energy producers in that group will impact pricing dynamics and the economies reliant on them.

Commodities, beyond oil, will drive increased volatility given technology expansion and the growing need for minerals. For instance, investors have been considering future access to semiconductor technology and the impact it will have on geopolitical relationships—not only between the U.S. and China, but also across different markets. Technology has become both an equalizer and an accelerant of competition.

Finally, both geopolitical events and climate events impact the market for agriculture commodities and put physical assets and infrastructure at risk. The opportunity for investors is in adaptation and investment in agriculture, water and infrastructure. Ultimately, necessity and periods of uncertainty create opportunities for outcome-oriented investment strategies and creative new partnerships.

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