Episode 27: TAG’s Tim Hodgson

Systematic Problems and Asset Management

Tim Hodgson is Head of the Thinking Ahead Group, a pension and asset management think tank originally established by Willis Towers Watson with the aim to tackle some of the systemic problems within the industry. As it works towards creating better outcomes, not just for its clients but also for society as a whole, the group has tackled some big questions, including what the asset owner of tomorrow would look like, the future of the asset management industry and and how a long-term view can add to performance.

In 2015, the group became a non-profit institute, led by Hodgson and Global Head of Investment Content Roger Urwin. The institute now has over 40 members, both asset owners and services providers.

We talk to Tim about practical obstacles to long-term investing, cognitive diversity and the impact of automation, and how data is shifting the war for talent from portfolio managers to data scientists.

Overview Tim Hodgson podcast

2:00 Why was the Thinking Ahead Institute established?
3:00 Do capital markets still work properly for pension funds to invest efficiently?
5:00 Today. markets are more of an exit strategy than a capital raising vehicle
7:30 Pension funds are not investing; they are collecting rents
9:00 If blockchain gets implemented in trading, do we need a distinction between public and private?
11:30 Is putting zero weight on impact (that companies might have) compatible with fiduciary duty?
13:50 Is this simply a way to bring a long term perspective into the discussion?
15:00 Value has a non-monetary component
16:20 Harvesting the long-term premium
18:40 Working with multiple time horizons
23:30 Most people are under-diversified in contingencies; it all depends on economic growth
24:30 How do manager strategies fit in with the total portfolio?
28:30 Cognitive diversity, any headway being made? “I would love to give you a positive answer”
29:00 We are hiring people from the same universities who have done the same degrees. What do we expect?
31:00 How long will we still have hand-build portfolios?
34:50 Big Data, will it have a significant impact on investing?
35:00 I know of one institutional investor who has existed long-only, active management completely.
37:00 The talent war has moved on to data scientists and coders.

About the [i3] Podcast

The [i3] Podcast is a conversation with some of the leading institutional investors around the world, discussing their philosophy towards investing, in particular towards portfolio construction and investment strategy. The [i3] podcast is available on iTunes, Google Podcast, Spotify, Stitcher or your favourite podcast platform.