If there is a most powerful asset owner (in our view, Canada Pension Plan Investment Board’s Mark Wiseman, up three spots from 2013), there must be a least powerful one. To discern how she or, more likely, he would act, all you have to do is look at what the best CIOs do—and imagine the opposite.
Take, for example, Texas Teachers’ Britt Harris’ (#4, up two spots from 2013) differentiating philosophy: “We believe that we are only slightly unique in four important ways—but each is significant and gives us a viable competitive advantage over most others,” he told me in 2013. “We are large, long term, liquid, and not levered.” The result was a focus on arrangements (such as its much-covered strategic partnerships) that maximized these advantages.
The world’s least powerful asset owner would do the opposite: He’d focus on the short term and his disadvantages, and his only investment horizon would be his next board meeting.
Or take, for example, the wisdom of Roland Lescure (#19, up six) of Quebec’s Caisse des dépôt. “We want to move, aggressively, away from indices,” he told me last year. “The answer 20 years ago was diversification. In a globalized world, diversification doesn’t work anymore. What we need is actually to be a bigger shareholder of fewer companies. We need to be more discerning and have more concentrated portfolios. And when you’re big like us, that means you have to take big positions.”
The world’s least powerful asset owner would do the opposite: His fund would stick to average allocations and practices, following the crowd wherever it went—even if that meant off a cliff.
Then there is Jagdeep Bachher (#38, up 40 spots), formerly of the Alberta Investment Management Corporation. “There’s incredible opportunity for outperformance in the US through cost efficiency alone,” he told Chief Investment Officer (CIO) in 2013. “The Canadians set a basis, now we have a chance to leapfrog it.” This past year, Bachher took his own advice: He entered the American fray at the University of California Board of Regents, intent on challenging himself and his new institution to be among the world’s elite asset owners.
The world’s least powerful asset owner would do the opposite: Career-wise, he’d stay comfortable—and mediocre.
Or you could just take the words of Wiseman himself: “We do think there is a lot to learn from our global peers,” he told CIO in 2012, the last year he sat in the Power 100 pole position. “We spend a lot of time talking to other public pension plans and sovereign funds because they are similarly placed. We’re looking to learn best practices in terms of asset management, allocation, risk management, and general internal processes.”
The world’s least powerful asset owner would do the opposite: He’d refuse to learn from others—scared of change, comparison, and not being the smartest person in the room.
So who is the world’s least powerful asset owner? You have the blueprint. Give me a name. You know where to reach me.
—Kip McDaniel, Editor-in-Chief