(September 10, 2013) – Established industry giants—State Street Global Advisors, Citadel—are up against boutiques and niche specialists—Kepos Capital, Stone Point Capital—as finalists for aiCIO’s 2013 Industry Innovation Awards.
For the fourth time in as many years, these awards recognize the best of the best in institutional asset management and servicing. For the first time, winners will be announced at the dinner itself, along with the asset owner awards, on December 9 in New York City. For information on the awards dinner, click here.
Several new categories have been included and others altered to reflect the evolving industry.
In investment outsourcing—a highly competitive space and category—three firms are up for the inaugural award: Russell Investments, Mercer, and Wurts & Associates.
TIAA-CREF, last year’s real estate winner, is up against European firm Pictet Asset Management for the first SRI/ESG trophy.
Prudential could become a rare repeat victor with its second nomination in the pension-risk category. While the insurance giant is undoubtedly a leader in the space, these are the innovation awards. Newport Beach-based Pacific Life is a contender with its a growing menu of original products.
It’s easy to look like a star in bullish years, but 2013 was not an easy one for every sector. The finalists for emerging markets (Lazard and Standish Asset Management) and risk-balance strategies (AQR, Bridgewater, and Invesco) demonstrated strength through trying markets.
A full list of asset management/servicing nominees is below. Asset owner category finalists will be released shortly. All winners will be announced at a dinner on December 9 in New York City. For a list of 2012 Industry Innovation Award Winners, click here.
Core Investments
Fixed-Income
Legal & General Investment Management America: For active fixed-income strategies that consistently outperform benchmarks, run by an experienced team known for its ability to customize solutions for corporate clients.
Mellon Capital Management: For their innovation in coupling alpha enhancements with a liability-focused and long-short investing approach through their Long Corporate Alpha Strategy.
Alpha Equities
Two Sigma: For their novel partnership with the CERN pension fund regarding their asymmetric long-only strategy.
Wellington Management: During a difficult period time for active equities, Wellington—through its Global Contrarian and other alpha strategies—has thrived by offering a deep research bench combined with a small-group execution feel.
Beta Equities
State Street Global Advisors: Because of its scale and volume, low costs from rebalancing and transitioning are consistently passed on to asset owners.
The Clifton Group: For its low cost, effective execution, and extremely client-centric culture.
Emerging Markets
Lazard Asset Management: For outperforming in a difficult year, and leveraging its emerging market expertise into the alternatives space.
Standish Asset Management: For the strength of its team, expertise across currency classes, and commitment to downside protection.
Alternative Investments
Private Equity
Centerbridge Partners: For a continued focus on investing where it feels it has an edge—and, going against the grain, refusing to expand globally into areas that it feels it doesn’t.
Stone Point Capital: For its successful long-term track record focusing on the financial services sector, its experience team, and a willingness to both go alone and co-invest alongside others.
Hedge Fund
Citadel: Ken Griffin’s flagship Kensington and Wellington funds become finalists the old-fashioned way: consistent outperformance since the financial crisis, with 25% returns in 2012 leading to further gains in 2013.
Kepos Capital: A relatively young firm that has pioneered “macro-stat arbitrage strategies” and was an early adopter of machine-learning techniques, Kepos is cited by many as being uncorrelated with major market indices and many other institutionally-focused hedge funds.
Real Estate/Infrastructure
AMP Capital: For its global focus and ability to successfully partner with some of the world’s largest asset owners, including Abu Dhabi Investment Authority and Canada Pension Plan Investment Board.
JBG: For a strong track record managing Washington, DC-based real estate assets for institutional investors.
Strategy & Tactics
Target-Date Solutions
Alliance Bernstein: Because of its deep understanding of asset allocation combined with a willingness to accept fiduciary responsibility within an open-architecture framework.
BlackRock: For its long-standing involvement in the target-date industry, and its increasing willingness to customize.
Pyramis Global Advisors: For its work on the next generation of open-architecture target date funds.
Liability-Driven Investing
NISA Investment Advisors: Because LDI searches usually start with “NISA and…”—an acknowledgment of the firm’s longstanding commitment to corporate pension de-risking.
PIMCO: For its intellectual capital, deep understanding of managing portfolios against liability streams, and a willingness to partner with clients in crafting solutions.
Pension-Risk Transfer
Pacific Life: For its growing suite of pension-risk transfer options—including “insured LDI”, buy-in, and buy-out products.
Prudential: Because despite a slower year in the large-scale transfer space, Prudential—which continues to build out its team—is still an undisputed leader in this market.
Investment Outsourcing
Russell Investments: For its commitment to building a robust investment and sales team serving asset owners of all stripes, its in-house implementation capabilities—and its longevity in a business crowded by newcomers.
Mercer: For committing serious resources to this business, and, as a result, becoming a truly global player.
Wurts & Associates: For “landing a whale” with the Delta pension plan.
Risk-Balanced/Long-Term Beta Strategies
AQR: For its broadening of the risk-premium horizon, and its willingness to help CIOs educate investment boards on this strategy.
Bridgewater Associates: Say what you will about risk parity and All Weather, but it largely did what it was supposed to do in 2013—which is not always the case in investment management.
Invesco: For its willingness to step outside the constraints of “traditional” risk-balanced investing, and its push to get risk parity into the defined contribution space.
Tactical Risk Management
F-Squared: Because its focus on downside protection via its Alphasector strategies consistently help clients avoid equity losses.
Windham Capital: For its quantitative approach, both through its GTAA strategy and software product, to managing risk.
SRI/ESG Strategies
Pictet Asset Management: For the firm’s forward-looking SRI investment suite, with a special mention of its water-focused efforts.
TIAA-CREF: For its company-wide push—from fixed-income to real estate—toward responsible investing techniques.
Asset Servicing/Advising
Transition Management
Citi: For its success in winning mandates globally as others depart the business, for its ability to use its global broker-dealer network to reduce costs, and its willingness to provide bespoke portfolio hedging and overlay strategies.
Harbor Analytics: For its push to shed transparency on a historically opaque industry.
Russell Investments: For its commitment to transparency—and for its high customer satisfaction scores in the 2013 aiCIO Transition Management Survey.
Securities Lending
Citi: For often being first movers in opening up new markets due to a broad local presence, and for being early adopters of ESG concepts in securities lending.
eSecLending: For its continued commitment to novel securities lending structures while focusing on relationship management, creative solutions, and client service.
Custody (Master Trust/Global Custody & Asset Management Servicing)
Northern Trust: For its unique arrangement of middle- and back-office independent replication for Bridgewater Associates.
State Street: For its commitment to global expansion, which brings with it increased scale and service benefits that can be passed onto clients.
Consulting
NEPC: From pension funds to healthcare funds, and from traditional investing to leading-edge strategies, NEPC is a thought leader.
RV Kuhns: For its commitment to the “pure” consulting space—and, largely because of this, its go-to reputation when funds need help choosing an investment outsourcing provider.
Methodology: The aiCIO Industry Innovation Awards are split into two general categories: asset management/servicing and asset owners. Nominations were open from July 8 until August 16, 2013. With input from our awards Advisory Board, made up of last year's winners, as well as surveys and data where applicable, the aiCIO editorial team makes the final decisions as to nominees and eventual winners. All winners will be announced at a dinner on December 9 in New York City. For more information, click here.