A flippant, fearless, and fundamental countdown of big money investing.

27 25

#26 Global Reach

How’s Your Mandarin?

If you want a job done well, do it yourself.

For more than a decade, some of the world’s most sophisticated asset owners have been living by this adage: not only globalizing their asset bases, but globalizing their physical presence too.

Landed a job at the Canada Pension Plan Investment Board (CPPIB)? Congratulations—you could be based in Toronto, London, New York City, Hong Kong, São Paulo, Luxembourg, or Mumbai. Working for Norway’s sovereign wealth fund could see you in Shanghai, Tokyo, or Singapore. How’s your Mandarin?

Americans are in on the action, too: The Teacher Retirement System of Texas became the first US public fund to open an office outside of its home country when it moved into London’s Mayfair neighborhood last year. The staff has the opportunity to rub shoulders with peers from the Kuwait Investment Authority and Korea’s National Pension Service, among others.

“Oftentimes a key driver of success can come from having boots on the ground, local knowledge, and better access to deal flow,” says Amir Saleem of consultant bfinance’s sovereign advisory group. A presence in London “can serve as a hub to cover the wider European region,” he adds (although watch this space after the UK’s European Union membership referendum on June 23).

A local presence “can lead to higher returns over the long term thanks to information obtained by local actors,” wrote Adam Dixon and Ashby Monk in a 2013 paper. Asset classes with “considerable informational asymmetries” were particularly suited to this treatment, the pair said—hence the focus of these local offices on regional property, infrastructure, and private equity deals.

Canadian ownership of UK infrastructure was a key reason cited by Chancellor George Osborne when he announced plans to pool the assets of the country’s 89 local public pensions last year. Having a global reach is raising the bar for the locals, too. 

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